Kaga Electronics Co., Ltd.
and Consolidated Subsidiaries
Consolidated Financial Statements for theYear Ended March 31, 2023
and Independent Auditor’s ReportIndependent Auditor’s Report
To the Board of Directors of Kaga Electronics Co., Ltd.
OpinionWe have audited the consolidated financial statements of Kaga Electronics Co., Ltd. and its
subsidiaries (the “Group” or the “Company”), which comprise the consolidated balance sheet as ofMarch 31, 2023, and the consolidated statement of income and comprehensive income, theconsolidated statement of changes in net assets and the consolidated statement of cash flows for theyear then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as of March 31, 2023, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressedin the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers Aarata LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assuranceRevenue recognition and valuation of inventories related to transactions with EuroTec Japan, Inc., andestimation of allowance for doubtful accounts(Notes to consolidated financial statements, 2. c. Inventories)(Notes to consolidated financial statements, 2.j. Allowance for doubtful accounts)(Notes to consolidated financial statements, 2.o. Recognition of significant revenue and expense)(Notes to consolidated financial statements, 2.p. Significant Accounting Estimates) 1. Valuation of
inventories related to transactions with EuroTec Japan, Inc.
Key audit matter description
How our audit addressed the key audit matterIn the electronic components business, theIn order to evaluate the appropriateness ofCompany that sells rotorcrafts recorded inventory revenue recognition for transactions fromtransactions with EuroTec Japan, Inc.
EuroTec, we performed the following principal(“EuroTec”) 867 million yen (0.3% of total
audit procedures:consolidated assets, 2,243 million yen in the•
We obtained an understanding, evaluated theprevious consolidated fiscal year). The Company
design and implementation, and tested thehas also recorded allowance for doubtful accounts
operating effectiveness of internal controlsof 4,387 million yen (1,868 million yen in therelated to revenue recognition of rotorcrafts.
previous consolidated fiscal year) against the•
In order to evaluate collectability ofoutstanding receivables balance of 6,570 million
consideration for the revenue recognitionyen (2.3% of total consolidated assets, 2,256
from EuroTech, which is undergoing legal
million in the previous consolidated fiscal year)
proceedings under the Civil Rehabilitation
related to EuroTec.
Act, we performed the inspection of theagreement with EuroTech, sales contracts
The revenue related to rotorcrafts is recognized
between EuroTech and its end user, and thewhen the goods are delivered to the customers
payment vouchers for the sales.
since the legal ownership of goods, significant•
In order to evaluate the validity of occurrence
risks associated with its ownership, and its
and cutoff for the sales of rotorcrafts, we
economic value are transferred, and performance
performed an inspection of aircraft
obligation is satisfied. The Company writes down
registration certificates and the receipt.
the carrying value of inventory when the net
realizable value is less than its cost. EuroTec isundergoing legal proceedings under the Civil
In order to evaluate the valuation of inventory for
Rehabilitation Act, and the Company’s inventories transactions from EuroTec and the estimatedfor which the sales orders were cancelled wereallowance for doubtful accounts related toevaluated at net realizable value based onreceivables due from EuroTec, we performed theappraised value that the market approach in thefollowing principal audit procedures:basis of the future demand forecast and used•
We obtained an understanding, evaluated themarket price trends. In addition, for inventory
design and implementation, and tested theassets for which orders continue to be received,
operating effectiveness of internal controls
the net selling price is calculated by considering
related to the valuation of inventory for
EuroTec's cash flow prospects in the contract
rotorcrafts and the estimated allowance foramount.
doubtful accounts.
Additionally, the Company recorded the•
In order to evaluate the reasonableness of theestimated uncollectible amount as the allowance
estimate of the net selling price of rotorcrafts,
for doubtful accounts for EuroTec using thewe performed the following principal audit
financial condition evaluation method.
procedures:
We asked the management to compare
The sales transaction of rotorcraft ordered fromthe future demand forecast and usedEurotech was a new business for the Company
market price trends, and ensured
with quantitative significance and under anconsistency of market distributionagreement that was ongoing since before thesituation and used-aircraft market priceprevious consolidated fiscal year. Therefore, it isdata including rotorcrafts and sales innecessary for the Company to carefully examine
the pre-owned aircraft market.

2 of 7

whether the revenue recognition is appropriate.
The Company determined the net realizable valueof inventories and the estimated uncollectible
amount for receivables by taking into
consideration of the future demand forecast for
rotorcraft, used-market price trends, and
EuroTec's proposed reproduction plan.
These estimates are subject to a high degree of
uncertainty, and may be subject to significant
management judgment. Therefore, we determinedthat the matter is a key audit matter.

3 of 7•

In order to evaluate the reasonableness of theestimated allowance for doubtful accounts
related to receivables, we performed thefollowing principal audit procedures:
In calculating the estimated allowancefor doubtful accounts of receivables, we
confirmed the consistency with
Eurotech's proposed rehabilitation planused by the Company regarding theestimated uncollectible amount forrehabilitation claims of the receivables
for EuroTech.
With regard to the other receivables, wevouched the available information of theproceeds from the sales to the end usersof rotorcrafts, which is the source ofcollected funds.

Valuation of unlisted securities shares including venture capital investments(Notes to consolidated financial statements, 2.p Significant Accounting Estimates) 2. Evaluation ofunlisted securities, including venture investments
Key audit matter description
How our audit addressed the key audit matter
The Group invests in newly formed companies in
In order to evaluate the investment securities
growth markets such as electronic devices forincluding unlisted securities, we performed thevehicles, environmentally friendly technology
following principal audit procedures:
solutions, communications, and new markets
such as medical/healthcare to generate•
We obtained an understanding, evaluated theinnovation.
design and implementation and tested theoperating effectiveness of internal controls
As of March 31, 2023, the Group recorded
related to the process of the valuation of
investment securities, including unlisted
investments in venture companies including
securities, of 1,058 million yen (0.4% of total
the valuation loss of the excess earning
consolidated assets) on the consolidated balance
capacity.
sheet, and a loss on valuation of investment•
We inquired of officers and management of
securities of 348 million yen (1.1% of income
the Company regarding the assessment
before income tax) on the consolidated statements
process of investments in venture companies
of income and comprehensive income.
at the time of acquisition and the most recent
financial status and operating results. We
With respect to unlisted securities, investments in
inspected the results of the analysis
venture companies may be acquired at a higher
conducted by the Company on future
price than the net asset value, reflecting the futurebusiness environment forecasts and othereconomic benefits arising from the investee's
factors. In addition, we inquired about theoperations. The recent performance of the
impact on the valuation of securities due toinvestee is compared to the medium-to-long term
estimates of the excess earning capacity ofbusiness plan obtained at the time of acquisition.
investee companies.
If the projected future economic benefits have•
We obtained the assessment prepared bysignificantly declined and are no longer expected
management and considered whether the
to be realized, a valuation loss is recorded. The
Company should recognize any impairment.
Company and its consolidated subsidiaries
In addition, we compared the forecasted
recognize valuation losses only when the actual
financial projections developed by thevalue of the assets has declined significantly.
investees' management to the valuation of
the investments.
The assumptions used in the assessment of•
We inspected the evidence related to theinvestment securities include unlisted securities
value at the acquisition to verify the accuracy
shares that involve management's judgment andof the acquisition cost.
because of the high degree of estimation
uncertainty and the quantitative significance of
the investment securities balance, judgment isrequired for the evaluation. Therefore, we
determined that this matter is a key audit matter.

4 of 7Other Information
The other information comprises the information included in a document containing audited
consolidated financial statements, but does not include the consolidated financial statements and our
auditor’s report thereon. We have determined that there is no other information and thus have not
performed any work on other information.
Responsibilities of Management and Those Charged with Governance for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated 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 theGroup’s ability to continue as a going concern and disclosing, as applicable, matters related to going
concern.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are 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 issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that an audit conducted in accordance with auditing standards generally accepted inJapan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the consolidated
financial statement audit is not to express an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s

5 of 7

report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
• Evaluate whether the presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Convenience translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2023 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 1 to the consolidated financial statements.

6 of 7

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Kensuke Koda
Designated Engagement Partner
Certified Public Accountant

Masaki Nitta
Designated Engagement Partner
Certified Public Accountant

PricewaterhouseCoopers Aarata LLC
November 30, 2023

Notes to the Reader of Independent Auditor's Report:
This is a copy of the Independent Auditor's Report and the original report is kept separately by theCompany.

7 of 7

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2023

Millions of Yen
2022
2023

ASSETS
CURRENT ASSETS:
Cash and bank deposits
Notes receivable-trade
Electronically recorded monetary claims
Accounts receivable-trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total CURRENT ASSETS

Thousands of
U.S. Dollars(Note 1)2023

¥ 41,051
1,449
9,258
110,240
264
46,2302,363
14,0139,388(275)
233,984¥ 52,600
1,534
9,683
117,881
195
41,375
2,277
12,552
7,624(153)
245,572$ 393,923
11,49272,517882,810
1,463
309,855
17,05694,00757,098(1,147)
1,839,077

15,033(8,108)
6,925

15,680(8,990)6,690

117,434(67,326)
50,107

Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net

14,181(8,132)
6,048

16,187(9,721)
6,466

121,226(72,800)
48,426

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

5,697(4,667)
1,030

5,880
(4,777)1,103

44,042(35,780)
8,261

Land
Construction in progress
Total PROPERTY, PLANT AND EQUIPMENT

5,074
313
19,3935,859
39
20,15843,881292
150,969

98
3,021
42
3,163

48
2,617
36
2,702

363
19,601
270
20,235INVESTMENTS AND OTHER ASSETS:
Investment securities ※1
Deferred tax assets
Guarantee deposits
Insurance funds
Distressed receivables
OthersAllowance for doubtful accounts
Total INVESTMENTS AND OTHER ASSETS

10,313
2,189
1,068
915
2,2951,171(2,355)
15,59812,144
2,162
1,280
920
4,842
1,298
(4,864)
17,78490,94916,1939,587
6,892
36,263
9,727(36,426)
133,187

Total NONCURRENT ASSETS

38,15540,645

304,391¥ 272,139¥ 286,217$ 2,143,469

NONCURRENT ASSETS:PROPERTY, PLANT AND EQUIPMENT
Buildings and structures
Accumulated depreciation
Buildings and structures, net

INTANGIBLE ASSETS
Goodwill
Software
OthersTotal INTANGIBLE ASSETS

Total ASSETS-1-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2023

Millions of Yen
2022
2023

LIABILITIESThousands of
U.S. Dollars(Note 1)
2023

CURRENT LIABILITIES:
Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Provision for directors' bonuses
Others ※2
Total CURRENT LIABILITIES¥ 86,493
23,858
7,138
2,834
301
12,291
132,918¥ 79,232
19,585
8,400
6,011
465
13,852
127,547$ 593,371
146,674
62,90745,018
3,485
103,739955,196

NONCURRENT LIABILITIES:
Bonds payable
Long-term loans payable
Deferred tax liabilities
Provision for directors' retirement benefits
Net defined benefit liabilities
Asset retirement obligations
OthersTotal NONCURRENT LIABILITIES

25,136
2,046
123
2,095
572
3,446
33,421

10,00010,600
2,634
143
2,148
627
2,778
28,932

74,88979,382
19,728
1,073
16,092
4,701
20,805
216,673

166,339

156,479

1,171,870

NET ASSETS:SHAREHOLDERS’ EQUITY
Share capital
Capital surplus
Retained earnings
Treasury shares
Total SHAREHOLDERS’ EQUITY

12,133
14,81877,423(5,643)98,732

12,133
14,82095,945(5,614)
117,285

90,867110,988718,532(42,043)878,345

ACCUMULATED OTHER COMPREHENSIVE INCOME
Changes in the fair value of available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit obligations
Total ACCUMULATED OTHER COMPREHENSIVE INCOME

1,299
(2)
5,439
210
6,948

2,534
(18)
9,568
239
12,322

18,977(141)
71,655
1,792
92,283120
105,800

129
129,737970
971,599

Total LIABILITIES AND NET ASSETS¥ 272,139
The accompanying notes are an integral part of these financial statements.

¥ 286,217$ 2,143,469

Total LIABILITIES

Non-controlling interests
Total NET ASSETS-2-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2023

Millions of Yen
2022
2023
Net sales ※1
Cost of sales ※2, 4
Gross profit

Thousands of
U.S. Dollars(Note 1)2023

¥ 495,827
435,280
60,547¥ 608,064
529,550
78,514$ 4,553,769
3,965,776
587,992

Selling, general and administrative expenses ※3, 4
Operating income

39,632
20,91546,26532,249346,476
241,516

NON-OPERATING INCOME
Interest income
Dividend income
Commission fee
Foreign exchange gains
House rent income
Share of profit of entities accounted for using equity method
OthersTotal NON-OPERATING INCOME

135
195
183
252
104
572
1,443

211
279
227
107
126
97
412
1,461

1,582
2,091
1,701
805
947
732
3,087
10,948

NON-OPERATING EXPENSES
Interest expenses
Share of loss of entities accounted for using equity method
OthersTotal NON-OPERATING EXPENSES
Ordinary income

315
472
114
902
21,456748
223
971
32,739

5,602
1,673
7,276
245,188

15
363
7
176
34
596

20
626
126
1
774

151
4,694
943
7
5,797

93
13
2
260
175
129
29
¥ 705

644
37
12
348
11
¥ 1,054

4,823
277
95
2,609
88
$ 7,893

EXTRAORDINARY INCOME
Gain on sales of property, plant and equipment ※5
Gain on sales of investment securities
Gain on transfer of business
Gain on revision of retirement benefit plan
Gain on reversal of estimated loss of funds from U.S. subsidiary
OthersTotal EXTRAORDINARY INCOMEEXTRAORDINARY LOSS
Impairment loss ※7
Loss on disposal of property, plant and equipment ※6
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on liquidation of subsidiaries and associates
Provision of allowance for doubtful accounts
OthersTotal EXTRAORDINARY LOSS

-3-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2023
Thousands of
U.S. Dollars(Note 1)
2023

Millions of Yen
2022
2023
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Profit attributable to owners of the parent
Profit attributable to non-controlling interests
OTHER COMPREHENSIVE INCOME
Changes in the fair value of available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit obligations, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total OTHER COMPREHENSIVE INCOME ※5
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥ 21,348¥ 32,460$ 243,092

5,071
606
5,678
15,669

9,197
167
9,365
23,094

68,883
1,258
70,141
172,951

15,401
268

23,07023

172,776
174

(78)
(52)
4,922
188

1,235
(16)
4,033
28

9,252
(126)
30,206
212

95

97

731

5,075

5,378

40,276¥ 20,745¥ 28,472$ 213,227¥ 20,428
316¥ 28,44526$ 213,026
200

The accompanying notes are an integral part of these financial statements.

-4-Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2023
Fiscal year ended March 31, 2022
Millions of Yen
Shareholders’ equity
Share capital

Balance at the beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

Capital surplus

Retained earnings

12,133¥ 14,327¥ 64,568

12,133

14,327

7
64,576

Total shareholders’equityTreasury shares¥(1,984)¥

7
89,053(1,984)(2,554)(2,554)

15,401

15,401(3,681)30(3,681)
22

8

481

¥

－
12,133490¥ 14,818

89,045481

12,847¥ 77,423¥(3,658)(5,643)¥

9,678
98,732Millions of Yen
Accumulated other comprehensive income
Changes in
the fair valueof availablefor-salesecurities

Balance at the beginning ofcurrent period¥
Cumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total
¥

1,378

Foreigncurrencytranslation
adjustment

Remeasurement ofdefinedbenefitobligations

50

¥ 470

¥ 21

50

470

21

Deferred
gains orlosses onhedges

¥

1,378

Total
accumulated
othercomprehen-sive income

Noncontrollinginterests

Total net
assets¥ 1,921 ¥4,095¥ 95,062

1,921

1
4,096

8
95,071(2,554)
15,401(3,681)
30

481
(79)
(79)
1,299

¥

(53)

4,969

189

5,026

(53)
(2)

4,969
¥ 5,439

189
¥ 210

5,026
¥ 6,948-5 -(3,976)¥

1,050(3,976)
10,728120 ¥ 105,800

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2023
Fiscal year ended March 31, 2023
Millions of Yen
Shareholders’ equity
Share capital

Balance at the beginning ofcurrent period
Adjustment of hyper-inflation
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

Capital surplus

12,133¥ 14,818

12,133

14,818Retained earnings

Treasury shares¥ 77,423
45
77,469¥Total shareholders’equity(5,643)¥(5,643)(4,594)(4,594)23,07023,070
(3)
43

(3)
32

10

(8)

¥

－
12,1332¥ 14,820

98,732
45
98,778(8)18,476¥ 95,945¥

29(5,614)18,507¥ 117,285

Millions of Yen
Accumulated other comprehensive income
Changes in
the fair valueof availablefor-salesecurities

Balance at the beginning ofcurrent period¥
Adjustment of hyper-inflation
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total
¥

1,299

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurement ofdefinedbenefitobligations

Total
accumulated
othercomprehen-sive income¥(2)¥ 5,439¥ 210¥ 6,948

(2)

5,439

210

6,948

1,299

Noncontrollinginterests¥

Total net
assets120 ¥ 105,800
45120
105,846(4,594)23,070
(3)
43

(8)
1,234

(16)

4,128

28

5,374

1,234
2,534

(16)
(18)

4,128
¥ 9,568

28
¥ 239

5,374
¥ 12,322

¥

-6 -

9

¥

5,383

9
23,891129 ¥ 129,737

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2023
Fiscal year ended March 31, 2023
Thousands of U.S. Dollars (Note 1)
Shareholders’ equity
Balance at the beginning ofcurrent period
Adjustment of hyper-inflation
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

Share capital

Capital surplus

Retained earnings

Treasury shares$

90,867$ 110,971

90,867110,971$ 579,821
344
580,166$

Total shareholders’equity(42,260 )$ 739,399
344
739,744(42,260)(34,412)(34,412)

172,776

172,776
(22)
322

(22)
240

82

(65)

$

－
90,86716$ 110,988(65)

138,366$ 718,532$

217(42,043)

138,601$ 878,345

Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive income
Changes in
the fair valueof availablefor-salesecurities

Balance at the beginning ofcurrent period
Adjustment of hyper-inflation
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period$ 9,732
9,732

Foreigncurrencytranslation
adjustment

Remeasurement ofdefinedbenefitobligations

Total
accumulated
othercomprehen-sive income(18 ) $ 40,739$ 1,579$ 52,033

1,579

52,033

Deferred
gains orlosses onhedges$(18)

40,739Noncontrollinginterests$

Total net
assets900 $ 792,333
344
900
792,677(34,412)
172,776
(22)
322

(65)
9,245

(122)

30,915

212

40,25070

40,320

9,245

(122)

30,915

212

40,25070

178,921

Total$ 18,977 $ (141) $ 71,655 $ 1,792
The accompanying notes are an integral part of these financial statements.

$ 92,283-7 -$970 $ 971,599

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2023

Millions of Yen
2022
2023
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIESIncome before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (Decrease) in net defined benefit liability
Increase in provision for directors' retirement benefits
Increase in provision for directors' bonuses
Increase in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity method
Gain on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Gain on sales of investment securities
Loss on valuation of investment securities
Gain on reversal of estimated loss of funds from U.S. subsidiary
Increase in notes and accounts receivable-trade(Increase) Decrease in inventories
Increase (Decrease) in notes and accounts payable-trade
Decrease in accounts receivable-other
Increase in accrued expenses
Decrease (Increase) in advance payments(Increase) Decrease in consumption taxes refund receivable
Increase in other current assets
Increase in other current liabilities
Others, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Others, net
Net cash (used in) provided by operating activities-8 -¥ 21,348
3,738
93
110
16
16
175
92
(403)
315
472
(14)
13
(360)
260
(187)
(7,889)(22,088)
2,451
583
887
1,349
(822)
(264)
2,030
797
2,723
124
(315)
(4,263)175¥ (1,554)¥ 32,460
4,000
644
54
(33)
20
163
2,358
(490)
748
(97)
(8)
37
(614)
348
(5,952)
9,316(11,503)
2,239
994
(417)
2,340
(741)
393
922
37,183491(732)(6,372)¥ 30,569

Thousands of
U.S. Dollars(Note 1)2023

$ 243,092
29,956
4,823
406
(253)
151
1,226
17,662(3,674)
5,602
(732)
(64)
277
(4,599)2,609(44,578)
69,773(86,147)
16,7717,450(3,130)17,530(5,550)2,949
6,908
278,4633,679(5,484)(47,726)$ 228,932

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2023
Thousands of
U.S. Dollars(Note 1)
2023

Millions of Yen
2022
2023
NET CASH USED IN INVESTING ACTIVITIESPayments for time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of short-term loans receivable
Payments of long-term loans receivable
Purchase of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash used in investing activities

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
Increase (Decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Purchase of treasury shares
Cash dividends paid
Purchase of shares of subsidiaries not resulting in change in scope of
consolidation
Others, net
Net cash provided by (used in) financing activities

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents-beginning balance
Cash and cash equivalents-ending balance ※1

The accompanying note is an integral part of these financial statements.

-9 -

¥

(856)
474
(3,276)32(1,377)(1,085)834(388)(1,180)
(4)
(28)
65
(174)
194
(6,772)¥(397)(3,691)
34
(467)
(750)
1,102
(421)
(7)
(4)
(103)
37
(170)
33
(4,805)$ (2,976)(27,647)
261(3,502)(5,624)8,260(3,155)
(54)
(33)
(777)
284
(1,273)249(35,990)

7,636
5,000
(668)
(3,681)(2,551)(5,555)500(15,040)
9,945(2)(4,590)(41,606)
3,744(112,634)
74,481(21)(34,377)(3,811)

(21)

(158)

(767)
1,155

(784)
(15,549)(5,877)(116,450)

2,079(5,092)44,333¥ 39,240852
11,066
39,240¥ 50,307

6,382
82,875
293,871$ 376,747

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
For the Year Ended March 31, 2023
1.

BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting regulations, and in conformity
with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain
respects as to application and disclosure requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Kaga
Electronics Co., Ltd. (the "Company") is incorporated and operates. Amounts less than ¥1 million have been
omitted. As a result, the total shown in the consolidated financial statements and notes thereto do notnecessarily agree with the sum of the individual account balances. The translations of Japanese yen amounts
into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥133.53 to $1, the rate of exchange at March 31, 2023. Such translations should not be
construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation
The consolidated financial statements include accounts of the Company and all of its subsidiaries (58 in
2022 and 57 in 2023) (together, the "Group").
Under the control and influence concept, those companies in which the Company, directly or indirectly, isable to exercise control over operations are fully consolidated, and those companies over which theCompany has the ability to exercise significant influence are accounted for by the equity method.
There are four equity method affiliates. For those companies accounted for under the equity method
whose fiscal year end date differs from the consolidated fiscal year end date, the financial statements of
those companies for their respective fiscal years are used.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profits and losses included in assets resulting from transactions within the Group is eliminated.
The fiscal year end date of some of the Company's consolidated subsidiaries (19 in 2022 and 19 in 2023) is
December 31. The consolidated financial statements incorporate accounts of these companies withadjustments for significant intercompany transactions arising during the period from January 1 to March
31.

b.

Cash Equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed toinsignificant risk of changes in value. Cash equivalents include time deposits and short -term investments,
all of which mature or become due within three months of the date of acquisition.

c.

Inventories
The Company and its domestic subsidiaries state specific merchandise inventories ordered by customers at
the lower of cost, determined by the specific identification method, or market value and that othermerchandise inventories at the lower of cost, determined principally by the moving -average method, ormarket value.

-10 -

d.

Marketable and Investment Securities
Marketable and investment securities are classified and accounted for, depending on management's intent,
as follows: (1) trading securities, which are held for the purpose of earning capital gains in the near term
are measured at fair value, and the related unrealized gains and losses are included in earnings, and(2) available-for-sale securities, which are measured at fair value, with unrealized gains and losses, net of
applicable taxes, reported in a component of other comprehensive income.
Non-marketable available-for-sale securities are stated at cost as determined by the moving-averagemethod. For other than temporary declines in fair value, investment securities are reduced to net realizablevalue by charging to income.

e.

Property, Plant and Equipment
Property, plant and equipment are stated at cost. Significant replacements and additions are capitalized;
maintenance and repairs, and minor replacements and improvements are charged to the consolidated
statement of income as incurred.
Depreciation of property, plant and equipment of the Company and its consolidated domestic subsidiaries
is computed substantially by the declining-balance method at rates based on the estimated useful lives of
the assets, while the straight-line method is applied to buildings acquired after April 1, 1998, facilities
attached to buildings and structures acquired after April 1, 2016, lease assets of the Company and its
consolidated domestic subsidiaries, and all property, plant and equipment of foreign subsidiaries.
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures

2 to 50 years
2 to 12 years
2 to 20 yearsf.

Goodwill
Goodwill is amortized using the straight-line method principally over a period of 5 years.

g.

Software
Software is amortized using the straight-line method over its estimated useful life.
Internal use software
Software for sale

5 years
3 yearsh.

Retirement and Pension Plans
To prepare for disbursement of employees’ retirement benefits under the defined benefit plan, a defined
benefit liability, which is the amount of defined benefit obligations less plan assets based on the expected
benefit obligation at the end of the fiscal year, is recognized. The retirement benefit obligations arecalculated by allocating the estimated retirement benefit amount until the end of the current fiscal year on
the benefit formula basis. Past service cost is primarily amortized on a straight-line method over a fixed
number of years (principally 10 years), which is shorter than the average remaining years of service of theeligible employees. Net actuarial gain or loss is primarily amortized from the following year on a straightline method over a fixed number of years (principally 10 years), which is shorter than the averageremaining years of service of the eligible employees. Actuarial gain and loss and past service costs that are
yet to be recognized as gains or losses are recorded as remeasurements of defined benefit obligations
presented in other comprehensive income, after being adjusted for tax effects.
Some of the consolidated subsidiaries apply the simplified method, by which they use the amount of
retirement benefit which would be required to be paid for voluntary retirement at the end of the fiscal year
as retirement benefit obligation, in order to calculate the retirement benefit liability and retirement benefit
expenses.

i.

LeasesThe Company applies the lease accounting standard, which requires all finance lease transactions becapitalized in the balance sheet.

j.

Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide for doubtful accounts principally at an amount-11 -based on the historical bad debt ratio during a certain reference period in addition to an estimateduncollectible amount based on the analysis of certain individual accounts.

k.

Provision for directors’ bonuses
Bonuses to directors and corporate auditors are accrued during the year in which such bonuses are
attributable.

l.

Provision for directors’ retirement benefits
The Company accrues liabilities related to retirement benefit obligations for directors and corporate
auditors, which is, in general, based upon the amounts required by the internal rules.

m. Translation of Foreign Currencies
Receivables and payables denominated in foreign currencies are translated into yen at the exchange rates
prevailing at the balance sheet date, and differences arising from the translation are debited or credited tothe consolidated statement of income.
Assets and liabilities of the foreign subsidiaries are translated into yen at the exchange rates prevailing at
the balance sheet date, and revenue and expense accounts are translated at the average rates of
exchange in effect during the year. Differences arising from the translation are presented as foreign
currency translation adjustments after being adjusted for non-controlling interests and tax effects.
n.

Derivatives and Hedging Activities(1) Hedge accounting method
The Company applies the deferred hedge method. The Company, however, adopts the allocation
method to account for forward exchange contracts if the requirements for the allocation method aremet. The Company also adopts the special method to account for interest rate swaps, which meet therequirements for specific matching criteria.
(2) Hedging instruments and hedged items(Hedging instruments)
Foreign currency forward contract transactions
Non-Deliverable Forward (“NDF”) transactions
Interest rate swaps(Hedged items)
Assets and liabilities denominated in foreign currencies
Interest rates on long-term loans payable(3) Hedging policy
The Company determines the hedging policy based on the internal rules. Foreign currency forward
contracts where there is expected risk such as fluctuation in foreign exchange are used interest rate
swaps where there is expected risk such as fluctuation in interest rates on long-term loans payable
are used.
(4) Assessment of hedge effectivenessHedge effectiveness is assessed by comparing the changing ratio of cash flows arising from thehedged items to the hedging instruments during the periods from the respective start dates of thehedges to the assessment dates. In addition, regarding interest rate swaps, the Company omits
assessment of hedge effectiveness based upon the fulfillment of the requirements for specificmatching criteria.

o.

Recognition of significant revenue and expense
The Group consists of four segments, Electronic Components, Information Equipment, Software and other.
The Company and its subsidiaries recognize their revenue basically when goods are transferred tocustomers since the title, significant risks of ownership and economic value of the goods are transferred
when goods are transferred, and reflects when performance obligations are satisfied. For the sales ofsome goods, revenue is recognized when the goods are shipped. For those sales of goods for which theCompany or its subsidiaries are determined to have acted as an agent, the net amount after deducting
costs is recognized as revenue. In contracts with some customers in Information Equipment segment that
-12 -include rebates and other variable consideration, revenue is recognized in the net amount, with the rebate
and other variable consideration amount deducted from the consideration agreed with customers. The
estimation of rebates is based on past transactions. The consideration of transactions is received within
one year after satisfaction of performance obligations and any significant financing components are notincluded.
p.

Significant Accounting Estimates
1. Valuation of inventories and allowance for doubtful accounts related to transactions with EuroTec
Japan, Inc.
(1) Relevant amounts recorded in the consolidated financial statements
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Inventories
Loss on valuation of inventories
Total receivables
Allowance for doubtful accounts¥ 2,243
1,809
2,256
1,868

¥ 867
1
6,570
4,387

$ 6,49712
49,20332,857(2) Information on the nature of significant accounting estimates for identified items
One of our customers, Euro Tec Japan, Inc. (“EuroTec”) has been in civil rehabilitation proceedings
since last fiscal year. Therefore, we recognized the following accounting estimates in inventories
and receivables related to transactions with Euro Tec.
(a) It is necessary to evaluate inventories since they relate to the rotorcraft business, in which thenumber of market participants is limited. In the proceedings of rehabilitation of Euro Tec, ourinventories on hand as a result of purchase order cancellation are held at net realizable value basedon future demand estimates, or appraised value determined with due consideration of market
trend.
(b) For receivables, the estimated uncollectible amount is recorded as allowance for doubtful
accounts, using the financial condition evaluation method. The uncollectible amount is estimatedwith due consideration of EuroTec’s rehabilitation plan.
The estimate of the net realizable value of inventories may change and result in additional loss inthe next fiscal year or after based on the rotorcraft business trend.

2. Valuation of unlisted securities shares, including venture capital investments(1) Amount recorded in the consolidated financial statements for this fiscal year

Millions of Yen
2022
2023
Investment securities
Loss on valuation of investment securities¥ 1,179260¥ 1,058
348

Thousands of
U.S. Dollars
2023$ 7,9292,610(2) Information on the nature of significant accounting estimates for identified items
With respect to unlisted securities shares, the Company calculates the actual value based on the
net asset value per share, based on the latest financial statements available from the investees, andrecords a valuation loss when the real value has declined significantly. In particular, investments inventure companies are sometimes acquired at a higher price than the net asset value, reflecting
the impact of estimated future economic benefits arising from the investee’s operations. If thoseprojected future economic benefits are no longer expected or are no longer considered reasonable
based on the investee’s recent performance compared to the medium-to-long term business planobtained at the time of acquisition, a valuation loss is recorded to reflect any significant decline in
future economic benefits. Due to uncertainties around future changes in the corporate-13 -environment, etc., which may negatively impact the projected future economic benefits, further
review may be required in the subsequent consolidated fiscal year, which may result in additional
losses.
q.

Changes in accounting policies(Application of Implementation Guidance on Accounting Standard for Fair Value Management)“Implementation Guidance on Accounting Standard for Fair Value Management (ASBJ Guidance No31, June
17,2021)” has been adopted from the beginning of this consolidated fiscal year ended on March 31, 2023.
In accordance with the transitional treatment set forth in Article 27-2 of “Implementation Guidance on
Accounting Standard for Fair Value Management”, the Company will continue to apply new accounting
policies prescribed by “Implementation Guidance on Accounting Standard for Fair Value Management” inthe future. The effect of this adoption on this consolidated financial statements is immaterial. In Note
“Matters concerning the breakdown of financial products by market price level”, details related to theprevious fiscal year are not described in accordance with Implementation Guidance Article 27-3.

r.

Standards and Guidance not yet adopted
The following standards and guidance were issued but not yet adopted.
・Accounting Standard for Current Income Tax (ASBJ Statement No.27, October 28, 2022)
・Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No.25,October
28,2022)
・Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No.28, October 28,2022)(1) Overview“Accounting Standard for Current Income Tax” (ASBJ Statement No.28, February 2018) was released. Inthat standard, the organization responsible for making practical guidelines about current income tax
was transferred from The Japanese Institute of Certified Public Accountants to Accounting Standard
Board of Japan. In the process of discussion, following two issues would be discussed after disclosureof ASBJ No.28. These points were discussed and the results were disclosed.
・The category of tax expense (Taxation of other comprehensive income)・Tax effect of sales of shares of subsidiaries and associates under Group Taxation Regime)(2) Effective date
To be applied from the beginning of the fiscal year ending March 31, 2025
(3) The impact of the adoption of the standard
The Group are currently in the process of determining the impact of this new standard on the
consolidated financial statements.

3.
※1.

NOTES TO CONSOLIDATED BALANCE SHEETInvestment securities
Investment securities include the following accounts of affiliated companies.

Millions of Yen
2022
2023
Investment securities

¥

-14 -

699

¥

990

Thousands of
U.S. Dollars
2023$ 7,415

※2.

Contract liabilities
Others include the following contract liabilities.

Millions of Yen
2022
2023
Contract liabilities※3.

¥ 4,180¥ 4,066

Thousands of
U.S. Dollars
2023$ 30,455

Contingent liabilities
Contingent liabilities for guaranteed employees' loans amounted to ¥9 million and ¥4 million(US$ 34 thousands) as of March 31, 2022 and 2023, respectively.

※4.

Commitment line contract
The Company has entered into commitment line contracts with four banks for effective fund-raising:Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Total limit of contract
Loan balances
Available amounts

4.

¥ 15,000
5,000
10,000¥ 15,000
15,000$ 112,334
112,334

NOTES TO CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME※1. Revenue recognized from contracts with customers
In terms of net sales, revenue recognized from contracts with customers and other revenue are not statedseparately. Disaggregated information of revenue recognized from contracts with customers is described in
Note 13.1.
※2.

Merchandise and finished goods at the end of fiscal year is described the amount after write-down to bookvalue accompanying with declining profitability.
Loss on valuation of inventories which is included in cost of sales is ¥1,989 million and ¥222million (US$ 1,664
thousands) for the years ended March 31, 2022 and 2023, respectively.

※3.

Selling, general and administrative expenses
Major items and the amounts under “Selling, general and administrative expenses” are as follows:
ThousandsofMillions of Yen
U.S. Dollars
2022
2023
2023
Salaries and bonuses
Retirement benefit expenses
Provision for directors’ bonuses
Provision for doubtful accounts¥ 18,595
1,055
304
(106)

-15 -

¥ 21,282
990
469
197

$ 159,382
7,416
3,512
1,477

※4.

Research and development costs
Research and development costs charged to income are ¥272 million and ¥476million (US$ 3,571 thousands)
for the years ended March 31, 2022 and 2023, respectively.

※5.

Gain on sales of property, plant and equipment
Details of gain on sales of property, plant and equipment are as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2022
2023
Machinery, equipment and vehicles
Tools, furniture and fixtures

7
8

Total

※6.

¥

11
8

15

¥

84
67

20

$

151

Loss on disposal of property, plant and equipment
Details of loss on disposal of property, plant and equipment are as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2022
2023
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Software

¥

8
0
4
－

¥

18
2
15
0

$

135
20
115
6

Total

¥

13

¥

37

$

277

※7.
Impairment loss
For the year ended March 31,2022
This information is not presented due to its insignificance.
For the year ended March 31, 2023
The Group has recorded impairment loss for the following assets group.
Area

Major
uses

Ledger accounts

Impairment
losses(Millions of Yen)

Hung Yen
Province,
VietnamBusiness
property

Düzce
TurkeyBusiness
property

Chiyoda-ku,
Tokyo, Japan

Business
property

Buildings and structures
Machinery, equipment and vehicles
Other (Investments and otherassets)Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Construction in progress
Software
Buildings and structures
Software
-16 -

1
8
3

Impairment
losses(Thousands of
U.S. Dollars)
11
64
27

226
244
56
75
1
0
25

1,699
1,831
420
564
11
2
190

Segment

Electronic
Components

Electronic
Components

Other

The Group recognizes impairment loss by grouping assets based on the company to which the asset belongs
and by grouping idle assets by individual projects. The assets are impaired from carrying amount to therecoverable amount when the profitability declines. The recoverable amount is measured at net selling price orvalue in use. Value in use is measured based on the amount of future cash flow. In addition, the recoverable
amount is regarded as zero when future cash flow is less than zero. Furthermore, estimates of future cash flows
include assumptions for future sales forecasts and operating profit, which are estimated based on information
impacted by factors external to the Group, such as the market environment and sales strategies.
※8.

Amount of reclassification and income tax effect associated with other comprehensive income
Thousands of
U.S. Dollars
2023

Millions of Yen
2022
2023
Net unrealized gain or loss on securities
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effectNet unrealized gain or loss on securities, net of Tax
Deferred gains or losses on hedges
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment
Amount arising during the period
Amount of reclassification
Foreign currency translation adjustment
Remeasurements of defined benefit obligations
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effectRemeasurements of defined benefit obligations
Share of other comprehensive income of entities
accounted for using equity method
Amount arising during the period
Total other comprehensive income

5.

¥

32
(348)
(316)
237
(78)

¥ 2,162
(504)
1,657
(422)
1,235

$

(3)
(49)
(52)
(0)
(52)

(92)
3
(89)
72
(16)

(691)
24
(666)
540
(126)

4,774
147
4,922

4,033
4,033

30,20630,206

239
28
268
(79)
188

230
(166)
63
(35)
28

1,725
(1,249)
476
(263)
212

95
¥ 5,075

97¥ 5,378732
40,276$

16,193(3,779)12,414(3,162)
9,252

NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended March 31, 2022
1. Type and number of issued shares of common stock and treasury shares
Number of shares
as of April 1, 2021

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2022

28,702,118－－

28,702,118

1,229,877

1,233,985

9,700

2,454,162

Number of outstanding shares
Common shares
Number of treasury shares
Common shares (Note)

Note:
The breakdown of the increase and decrease of common stock is as follows:
Increase as a result of repurchase of treasury shares based on Board of Directors Meeting Resolution: 1,231,700-17 -shares
Increase as a result of fractional share repurchases: 2,285 shares
Decrease as a result of the payment of restricted stock to the directors: 9,700 shares
2. Dividends(1) Dividends paid
Resolution

Generalshareholders’meeting held on
June 29, 2021
Board of Directors'
meeting held on
November 14,
2021

Type of share

Amount of dividends(Millions of yen)

Dividend pershare (Yen)Commonshares1,373(US$11,224 thousands)

Commonshares1,180(US$9,648 thousands)

Record date

Effective date50
(US$0.40)

March 31, 2021

June 30, 2021

45
(US$0.36)

September 30,
2021

December 3, 2021

(2) Dividends whose effective date is after March 31, 2021 with record date during the year ended March 31,
2021.
Resolution

Type of share

Amount of dividends(Millions of yen)

Source ofdividends

Dividend pershare (Yen)Generalshareholders’meeting heldon June 29,
2022

Commonshares1,968(US$16,085 thousands)

Retainedearnings

75(US$0.61)

Record date

Effective date

March 31, 2022

June 30,2022

For the year ended March 31, 2023
1. Type and number of issued shares of common stock and treasury shares
Number of shares
as of April 1, 2022

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2023

28,702,118－－

28,702,118

2,454,162

812

13,9912,440,983

Number of outstanding shares
Common shares
Number of treasury shares
Common shares (Note)

Note:
Increase as a result of fractional share repurchases: 812 shares
Decrease as a result of the payment of restricted stock to the directors: 13,991 shares
2. Dividends(1) Dividends paid
Resolution

Generalshareholders’meeting held on
June 29, 2022
Board of Directors'
meeting held on
November 8, 2022

Type of share

Amount of dividends(Millions of yen)

Dividend per share(Yen)

Commonshares1,968(US$14,743 thousands)

Commonshares2,626(US$19,668 thousands)-18 -Record date

Effective date75
(US$0.56)

March 31, 2022

June 30, 2022

100
(US$0.74)

September 30,
2022

December 2, 2022

(2) Dividends whose effective date is after March 31, 2022 with a record date during the year ended March 31,
2022.
Resolution

Type of share

Amount of dividends(Millions of yen)

Source ofdividends

Dividend pershare (Yen)Generalshareholders’meeting heldon June 27,2023

Commonshares3,151(US$23,602 thousands)

Retainedearnings

120(US$0.89)

6.

Record date

Effective date

March 31, 2023

June 28,
2023

NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS※1. Cash and cash equivalents at March 31, 2022 and 2023 are reconciled to the accounts reported in the
consolidated balance sheet as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023

7.

Cash and bank deposits
Time deposits with a deposit period of more than 3 months¥ 41,051(1,810)¥ 52,600(2,293)$ 393,923(17,176)

Cash and cash equivalents¥ 39,240¥ 50,307$ 376,747

LEASES
Finance leases that do not transfer ownership of the leased assets to lessees.
Leased assets:
The Group leases buildings, machinery, equipment and vehicles and other assets.
As described in Note 2.i, the lease accounting standard requires that all finance lease transactions should becapitalized to recognize lease assets and lease obligations in the balance sheet.
Future lease payments under non-cancelable operating leases at March 31, 2022 and 2023 were as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2022
2023
Due within one year
Due after one year

¥

9
3

¥

4
3

$

34
28

Total

¥

12

¥

8

$

63

-19 -

8.

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group has financial instruments, mainly debt from financial institutions, consistent with its capitalfinancing plan. Cash surpluses, if any, are invested in low risk financial assets. Derivatives are not used
for speculative purposes, but rather to manage exposure to foreign exchange risks.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables and Payables in foreign currencies are exposed to the risk of fluctuation in foreign currency
exchange rates.
(3) Risk Management for Financial Instruments
Credit risk management
The Company manages its credit risk from receivables on the basis of internal guidelines, which include
monitoring the payment terms and balances of major customers by each business administration
department to identify the default risk of customers in an early stage.
Market risk management (foreign exchange risk)
Foreign currency trade receivables and payables are exposed to market risk resulting from fluctuations inforeign currency exchange rates. Such foreign exchange risk is hedged principally by forward foreign
currency contracts.
Marketable and investment securities are managed by monitoring market values and financial position ofissuers on a regular basis.
(4) Supplementary Explanation for Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted prices are notavailable, other rational valuation techniques are used. Please see Note 10 for the detail of fair value forderivatives.

(a) Fair Value of Financial Instruments
Millions of Yen
Fair
Value

Unrealized
Loss

March 31,
2022

Carrying
AmountAccounts receivable-trade
Short-term investment securities
Investment securities ※2
Guarantee deposits¥110,240
264
6,669
1,068

¥110,240
264
6,669
885

－
－
－
(183)

Total

¥118,243¥118,060¥ (183)

Notes and accounts payable-tradeLong-term loans payable¥ 86,493
25,136¥ 86,493
25,072

¥

－
64

Total

¥111,630¥111,566¥

64

Derivatives ※4

¥

¥

¥

－

-20 -

(21)

(21)

※1 "Cash and bank deposits", "Note receivable-trade", "Electronically recorded monetary claims","Short-term loans payable", "Accrued expenses", "Income taxes payable" are settled in cash
and others are settled in a short period of time. Therefore, since the market price is close to thebook value, the description is omitted.
※2 Stocks which do not have quoted market price are not included in "Investment securities." Theamount recorded on the consolidated balance sheet of the relevant financial instrument is asfollows.

Shares of related companies
Non-marketable equity securities

Millions of
Yen
¥ 699
1,179

※3 The description of investment in partnerships and other similar business entities that record
the amount equivalent to their equity in the consolidated balance sheet in net amount isomitted. The amount recorded on the consolidated balance sheet of the investment is 277
million yen.
※4 The value of assets and liabilities arising from derivatives is shown at net value.

March 31,2023

Carrying
AmountMillions of Yen
Fair
Value

Accounts receivable-trade
Short-term investment securities
Investment securities ※2
Guarantee deposits¥117,881
195
9,809
1,280

¥117,881
195
9,809
1,092

－
－
－
(187 )

Total¥129,166¥128,979¥ (187 )Notes and accounts payable-trade
Bonds
Long-term loans payable¥ 79,232
10,00010,600¥ 79,232
9,997
10,520

¥

－
2
79

Total

¥ 99,832¥ 99,750¥

82

Derivatives ※4

¥

¥

¥

－

(92)

(92)

Unrealized
Loss※1 "Cash and bank deposits," "Note receivable-trade", "Electronically recorded monetary claims,""Short-term loans payable," "Accrued expenses," "Income taxes payable" are settled in cash
and others are settled in a short period of time. Therefore, since the market price is close to thebook value, the description is omitted.
※2 Stocks which do not have quoted market price are not included in "Investment securities." Theamount recorded on the consolidated balance sheet of the relevant financial instrument is asfollows.

Shares of related companies
Non-marketable equity securities

Millions of
Yen
¥ 990
1,058

※3 The description of investment in partnerships and other similar business entities that record
the amount equivalent to their equity in the consolidated balance sheet in net amount isomitted. The amount recorded on the consolidated balance sheet of the investment is 285
million yen.
※4 The value of assets and liabilities arising from derivatives is shown at net value.
-21 -Thousands of U.S. Dollars
Carrying
Fair
Unrealized
Amount
Value
Loss
－
－
－
(1,405)

Accounts receivable-trade
Short-term investment securities
Investment securities ※2
Guarantee deposits$ 882,810
1,463
73,4629,587$ 882,810
1,463
73,462
8,181

$

Total

$ 967,324$ 965,918$ (1,405)

Notes and accounts payable-trade
Bonds
Long-term loans payable$ 593,371
74,88979,382$ 593,371
74,87178,786

$

－
18
596

Total

$ 747,643$ 747,029$

614

Derivatives ※4

$

$

$

－

(691)

(691)

※1 "Cash and bank deposits", "Notes receivable-trade", "Electronically recorded monetary claims","Short-term loans payable", "Accrued expenses", "Income taxes payable" are settled in cash
and others are settled in a short period of time. Therefore, since the market price is close to thebook value, the description is omitted.
※2 Stocks which do not have quoted market price market prices are not included in "Investment
securities." The amount recorded on the consolidated balance sheet of the relevant financial
instrument is as follows.

Shares of related companies
Non-marketable equity securities

Thousands of
U.S. Dollars$ 7,415
7,929※3 The description of investment in partnerships and other similar business entities that record
the amount equivalent to their equity in the consolidated balance sheet in net amount isomitted. The amount recorded on the consolidated balance sheet of the investment is 2,141
thousands of U.S. Dollars.
※4 The value of assets and liabilities arising from derivatives is shown at net value.
Note 1. Redemption Schedule of Monetary Assets and Securities with Contractual Maturities
March 31, 2022

Cash and bank deposits
Notes receivable-trade
Accounts receivable-trade
Electronically recorded monetaryclaimsInvestment securities withmaturities
Guarantee deposits
Total

Within 1 year
¥ 41,051
1,449
110,240

Over 10
years
¥
－
－
－

9,258

－

－

－

－
45

10
126

－
742

－
－

¥ 162,045-22 -Millions of Yen
Over 1 year
Over 5 years
within 5
within 10
years
years
¥
－
¥
－
－
－
－
－

¥

136

¥

742

¥

－

March 31, 2023

Cash and bank deposits
Notes receivable-trade
Accounts receivable-trade
Electronically recorded monetaryclaimsInvestment securities withmaturities
Guarantee deposits

Within 1 year
¥ 52,600
1,534
117,881

Total

－

－

－

50
172

10
－

－
954

－
－

Within 1 year
$ 393,923
11,492882,810

Total

Over 10
years
¥
－
－
－

9,683

¥ 181,922

Cash and bank deposits
Notes receivable-trade
Accounts receivable-trade
Electronically recorded monetaryclaimsInvestment securities withmaturities
Guarantee deposits

Millions of Yen
Over 1 year
Over 5 years
within 5
within 10
years
years
¥
－
¥
－
－
－
－
－

¥

10

¥

954

Thousands of U.S. Dollars
Over 1 year
Over 5 years
within 5
within 10
years
years
$
－
$
－
－
－
－
－

－

¥

Over 10
years
$
－
－
－

72,517

－

－

－

374
1,288

75
－

－
7,144

－
－

$ 1,362,407

$

75

$

7,144

－

$

Note 2. The payment schedule for bonds, long-term loans, lease obligations and other interest-bearing
liabilities by payment due date at March 31, 2022 and 2023 is as follows:
March 31, 2022
Millions of Yen
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable
Total

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years¥ 18,821 ¥

－ ¥

－ ¥

－ ¥

5,036
¥ 23,858 ¥

5,036
5,036 ¥

5,100
5,100 ¥

5,000
5,000 ¥

-23 -

Over
5 years

－ ¥

－

5,000
5,000
5,000 ¥ 5,000March 31, 2023
Millions of Yen
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable
Bonds
Total

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years¥ 14,545 ¥

－ ¥

－ ¥

5,040
－
¥ 19,585 ¥

100
5,000
－
5,000
100 ¥ 10,000¥Over
5 years

－ ¥

－ ¥

－

1,000
－
1,000 ¥

4,500
5,000
9,500 ¥－－－

Thousands of U.S. Dollars
Within1 yearOver 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years

Short-term loans$ 108,929 $Long-term loans
Including current portion of longterm loans payable
37,744
－
Bonds
Total

$ 146,674 $

－ $

748
－

－ $

37,44437,444748 $ 74,889 $

－ $

7,488
－

Over
5 years－ $33,70037,444

7,488 $ 71,145 $

－

－
－
－

(b) Matters concerning the breakdown of financial products by market price level
The market price of financial instruments is classified into the following three levels according to theobservability and importance of the input related to the calculation of the market price.
Level 1 market price: The market price calculated based on the market price of the asset or liability
formed in the active market and subject to the calculation of the market price among the inputs
related to the calculation of the observable market price
Level 2 market price: The market price calculated using the inputs related to the calculation of market
price other than the level 1 input among the inputs related to the calculation of the observable
market price.
Level 3 market price: Market price calculated using inputs related to the calculation of unobservable
market price
When multiple inputs that have a significant influence on the market price calculation are used, themarket price is classified into the lowest priority level in the market price calculation among the levels
to which those inputs belong.

-24 -(1) Financial instruments recorded on the consolidated balance sheet at market priceMarch 31, 2022
Market price (Millions of Yen)
Level 1
Level 2
Level 3
Total
Short-term investment securities－－ ¥ 264
Marketable equity securities¥ 264
Investment securities－－
Marketable equity securities
6,659
6,659
－
－
Government bonds
10
10¥ 6,923 ¥10－¥ 6,934

Derivatives
Currency related transactions

－ ¥

21

－

¥

21

Total

－ ¥

21

－

¥

21

Total

March 31, 2023
Market price (Millions of Yen)
Level 1
Level 2
Level 3
Total
Short-term investment securities
Marketable equity securities
Investment securities
Marketable equity securities
Investment trusts
Corporate bonds
Government bonds

195

－

－

8,562
1,187
－
－

－
－
50
10

－
－
－
－

¥ 9,944 ¥60－ ¥ 10,004

Derivatives
Currency related transactions

－ ¥

92

－

¥

92

Total

－ ¥

92

－

¥

92

Total

¥

¥

195
8,562
1,187
50
10

March 31, 2023
Market price (Thousands of U.S. Dollars)
Level 1
Level 2
Level 3
Total
Short-term investment securities
Marketable equity securities
Investment securities
Marketable equity securities
Investment trusts
Corporate bonds
Government bonds$ 1,463－－$ 1,463

64,121
8,891
－
－

－
－
374
75

－
－
－
－

64,121
8,891
374
75

$ 74,476 $449－ $ 74,926

Derivatives
Currency related transactions

－ $

691

－

$

691

Total

－ $

691

－

$

691

Total

-25 -

(2) Financial instruments other than those recorded on the consolidated balance sheet at market priceMarch 31, 2022
Market price (Millions of Yen)
Level 1
Level 2
Level 3Total
－ ¥ 110,240－ ¥ 110,240
Accounts receivable-trade－－
Guarantee deposits
885
885
Total

－ ¥ 111,126－ ¥ 111,126

Notes and accounts payable-tradeLong-term loans payable－ ¥ 86,493－
25,072－ ¥ 86,493－
25,072Total－ ¥ 111,566－ ¥ 111,566

March 31, 2023

Accounts receivable-trade
Guarantee deposits

Market price (Millions of Yen)
Level 1
Level 2
Level 3Total
－ ¥ 117,881－ ¥ 117,881
－
－
1,092
1,092

Total

－ ¥ 118,974－ ¥ 118,974

Notes and accounts payable-trade
Bonds
Long-term loans payable

－ ¥
－
－

79,232
9,997
10,520－ ¥ 79,232
－
9,997
－
10,520Total－ ¥99,750－ ¥ 99,750

March 31, 2023

Accounts receivable-trade
Guarantee deposits

Market price (Thousands of U.S. Dollars)
Level 1
Level 2
Level 3Total
－ $ 882,810－ $ 882,810
－
－
8,181
8,181

Total

－ $ 890,992－ $ 890,992

Notes and accounts payable-trade
Bonds
Long-term loans payable－ $ 593,371－
74,871－78,786－ $ 593,371－
74,871－78,786Total－ $ 747,029－ $ 747,029

Note. Explanation of the valuation technique used to calculate the market price and the inputs related
to the calculation of the market price
Short-term investment securities, investment securities
Listed stocks are evaluated using market prices and are traded in active markets. Therefore theirmarket price is classified as Level 1 market price. On the other hand, Government bonds areevaluated based on the reference value of trading statistics and are classified as Level 2 market
price.
Derivative
The market price of exchange contracts is calculated by the discounted present value method using
observable inputs such as exchange rates, and is classified as Level 2 market price. Since theallocation of forward exchange contracts is treated together with the receivables and payables(accounts receivable-trade, notes and accounts payable-trade) that are hedged items the market
price is included in the market price of the receivables and payables. In addition, since the special
treatment of interest rate swaps is treated together with long-term borrowings that are hedged-26 -items the market price is included in the market price of the long-term borrowings (Refer to “Longterm loans payable.).
Accounts receivable-trade
Since the market price of accounts receivable-trade is settled in a short period of time, the market
price is close to the book value, so it is classified as Level 2 market price based on the book value.
Guarantee deposits
The market price of the guarantee deposits is calculated by the discounted present value method
based on the refund amount presented by the recipient or the interest rate that takes the past
performance and credit risks into account, and is classified as a level 2 market price increase.
Notes and accounts payable-trade
Since these market prices are settled in a short period of time, the market price is close to the bookvalue. Therefore it is based on the book value and is classified as Level 2 market price.
Bonds
The market price of bonds is calculated by the discounted present value method based on the total
amount of principal and interest, the remaining period of the debt and the interest rate that takes
credit risks into account, and is classified as Level 2 market price.
Long-term loans payable
The market price of long-term loans payable is calculated by the discounted present value method
based on the total amount of principal and interest, the remaining period of the debt and theinterest rate that takes credit risks into account, and is classified as Level 2 market price. Some longterm loans payable with floating interest rates are subject to special treatment of interest rate
swaps (see “Derivatives”) and is calculated using the total amount of principal and interest that istreated together with the interest rate swaps.

9.

MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of March 31, 2022 and 2023 consisted of the following:(1) Current-Marketable equity securities
Thousands of
U.S. Dollars
2023

Millions of Yen
2022
Unrealized gains included in net income
for the year

¥

2023
(38 )

¥

(68 )

$

(515 )(2) Investment securities with a readily determinable fair value
March 31, 2022
Millions of Yen
Acquisition
cost

Carrying
amountSecurities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal
Securities for which the carrying
amount does not exceed the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal
Total

-27 -

Difference¥ 5,826
10
1,177¥ 7,014¥ 3,87010752¥ 4,633

¥

832

1,166

－

－

－

310
¥ 1,143348¥ 1,515

(38)
(371)

¥ 8,157¥ 6,149

¥

1,955
0
424
2,380

(333)

¥
¥

2,008

Note:
Non-marketable equity securities of ¥1,179 million and Shares of subsidiaries and related companies of¥ 699 million are not included in the above due to stocks with no market price. In addition, investments inunions and other similar business entities that record the amount equivalent to their equity in the
consolidated balance sheet in net amount of ¥277 million is omitted.
March 31, 2023
Millions of Yen
Acquisition
cost

Carrying
amountSecurities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal
Securities for which the carrying
amount does not exceed the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal¥ 8,34260
741¥ 9,144¥ 4,85060
494¥ 5,404

219

259

－

－

－

445
665

480
739

(34)
(74)

¥

Total

¥ 9,809

Securities for which the carrying
amount does not exceed the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal
Total¥¥ 6,144
Thousands of
U.S. Dollars
Acquisition
cost

Carrying
amountSecurities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds
OthersSubtotal

Difference

¥

¥

3,492
0
247
3,739

(40)

¥
¥

3,665

Difference$ 62,476
449
5,552$ 68,479$ 36,321
449
3,700$ 40,472$ 26,155
01,851$ 28,007

1,644

1,945

(301)

－

－

－

3,338
$ 4,983

3,596$ 5,541

$

(257)
(558)

$ 73,462$ 46,013$ 27,448

Note:
Non-marketable equity securities of ¥1,058 million (US$ 7,929 thousands) and Shares of subsidiaries andrelated companies of ¥ 990 million (US$ 7,415 thousands) are not included in the above due to stocks withno market price. In addition, investments in unions and other similar business entities that record theamount equivalent to their equity in the consolidated balance sheet in net amount of ¥285 million(US$ 2,141 thousands) is omitted.

-28 -(3) Investment securities sold during 2022 and 2023
March 31, 2022
Millions of Yen

Investment securities
Government and corporate bonds
OthersTotal

Amounts sold

Gains on sales

Loss on sales

¥

¥

¥

734
－
202
937

¥

¥

361
－
2
363

(1)
－
(1)
(2)

¥

－

March 31, 2023
Millions of Yen

Investment securities
Government and corporate bonds
OthersTotal

Amounts sold

Gains on sales

Loss on sales

¥

¥

¥

865
－
89
954

¥

¥

626
－
－
626

－
－
12
12

¥

Thousands of
U.S. Dollars

Investment securities
Government and corporate bonds
OthersTotal

Amounts sold

Gains on sales

$

$

$

6,483
－
668
7,151

$

Loss on sales

4,694
－
－
4,694

－
－
95
95

$

$

(4) Impairment losses recognized on Investment securities are as follows:
Thousands of
U.S. Dollars

Millions of Yen
2022
¥

-29 -

2023
260

¥

2023
348

$

2,610

－

10. DERIVATIVES
Derivative Transactions to Which Hedge Accounting Is Applied(1) Currency related transactions

March 31, 2022

Hedged Item

Millions of Yen
Contract
AmountContract
Due after
AmountOne Year

General processing method:
Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying EUR

Receivables
Receivables
PayablesPayables¥ 3,613
76
2,793
0

¥

－
－
－
－

¥ (140)(5)
141
0¥ 6,483

¥

－

¥

(5)

¥ 6,866
55
4,523
3
0

¥

¥ 11,149

¥

－
－
－
－
－
－
－

¥

－

Total
Allocation processing of foreign exchange
contracts:
Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying CNY
Buying EUR

Receivables
Receivables
PayablesPayablesPayables

Total

Fair
Value

March 31, 2023

Hedged Item

Millions of Yen
Contract
AmountContract
Due after
AmountOne Year

General processing method:
Foreign currency forward contracts:
Selling USD
Buying USD
Buying EUR

Receivables
PayablesPayables¥ 7,536
2,624
0

¥

－
－
－

¥ (36)(24)
0¥ 10,160¥－¥ (61)¥ 8,051
137
5,227
4
0

¥

¥ 13,420

¥

－
－
－
－
－
－
－

¥

Total
Allocation processing of foreign exchange
contracts:
Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying CNY
Buying EUR

Receivables
Receivables
PayablesPayablesPayables

Total

-30 -

Fair
Value

－

March 31, 2023

Hedged Item

Thousands of U.S. Dollars
Contract
AmountContract
Due after
Fair
AmountOne Year
Value

General processing method:
Foreign currency forward contracts:
Selling USD
Buying USD
Buying EUR

Receivables
PayablesPayables$ 56,441
19,6510$－－$ (274)(183)
0$ 76,093$－$ (457)$ 60,299
1,031
39,14630
0$$ 100,508

$

－
－
－
－
－
－
－

$

Total
Allocation processing of foreign exchange
contracts:
Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying CNY
Buying EUR

Receivables
Receivables
PayablesPayablesPayables

Total

－

Note:
Allocation of forward exchange contracts is accounted for as an integral part of monetary receivables andpayables denominated in foreign currencies that are hedged items. Therefore, their fair value is included in thefair value of the foreign currency-denominated receivables and payables that are hedged items.

-31 -(2) Interest related transactions
For the year ended March 31, 2022

Hedge
Accounting
MethodSpecialtreatment
for interest
rate swap

Type ofTransaction
Interest rate
swap
Receivefloating,
pay fixed

Hedged Item
Long-termloans payable

Contract
Amount¥ 12,900

Millions of Yen
Contract
AmountDue after
One Year
¥

8,600

Fair
Value
(Note)

Note:
Specific matching criteria for interest rate swap is accounted for together with long-term loans payable
designated as the hedge item. Therefore, their fair values are included in the fair value of the long-term loans
payable.

For the year ended March 31, 2023

Hedge
Accounting
MethodSpecialtreatment
for interest
rate swap

Type ofTransaction
Interest rate
swap
Receivefloating,
pay fixed

Hedged Item
Long-termloans payable

Millions of Yen, Thousands of U.S.
Dollars
Contract
AmountContract
Due after
Fair
AmountOne YearValue¥ 8,600($ 64,405)¥ 4,300($ 32,202)(Note)

Note:
Specific matching criteria for interest rate swap is accounted for together with long-term loans payable
designated as the hedge item. Therefore, their fair values are included in the fair value of the long-term loans
payable.

-32 -11. RETIREMENT BENEFITS(1) Outline of retirement benefits plans
Under the pension plans, employees terminating their employment are, in most circumstances, entitled topension payments based on their average pay during their employment, length of service and certain otherfactors. The defined benefit plans and lump-sum payment plans of some of the consolidated subsidiaries arecalculated using simplified methods. In addition, some of the consolidated subsidiaries have transferredfrom defined benefit pension plans to defined contribution pension plans on April 1, 2022.
(2) Defined benefit pension plans(a) Changes in the retirement benefit obligation for the years ended March 31, 2022 and 2023 (excluding
plans applying the simplified method) are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Retirement benefit obligation at the beginning of the year
¥ 7,987
Service cost
518
Interest cost
40
Actuarial gains (losses)(197)
Benefits paid
(504)
(17)
Prior service cost－
Decrease from shift to the defined contribution pension plans
Others6¥ 7,823
356
34
(296)
(346)
－
(2,312)(7)$ 58,592
2,671
256(2,220)(2,591)－(17,315)(56)

Retirement benefit obligation at the end of the year

¥ 5,252$ 39,335¥ 7,823(b) Changes in the plan assets for the years ended March 31, 2022 and 2023 (excluding plans applying thesimplified method) are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Plan assets at fair value at the beginning of the year
¥ 7,310
Expected return on plan assets
124
Actuarial gains (losses)
23
Contributions by the employer
426
Benefits paid
(466)－
Decrease from transfer to defined contribution pension plans
55
Others¥ 7,473
90
(66)
338
(358)
(2,372)－$ 55,972
674
(494)
2,537
(2,684)(17,764)－

Plan assets at fair value at the end of the year

¥ 5,106$ 38,240¥ 7,473-33 -(c) Changes in net defined benefit liabilities for plans which applied the simplified method for the years
ended March 31, 2022 and 2023 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Net defined benefit liabilities at the beginning of the year
Retirement benefit expenses
Retirement benefits paid
Contributions to plan
Others¥ 1,565
296
(100)
(117)
(2)

¥ 1,641
414
(129)
(146)
(10)

$ 12,295
3,107
(966)
(1,093)(77)

Net defined benefit liabilities at the end of the year

¥ 1,641¥ 1,771$ 13,265(d) Reconciliation between the funded status of the plans (retirement benefit obligation and plan assets) andthe amounts recognized in the consolidated balance sheet (net defined benefit liabilities and net defined
benefit assets) as of March 31, 2022 and 2023 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Retirement benefit obligation of funded plans
Plan assets
Retirement benefit obligation of unfunded plans
Net liabilities recorded in the consolidatedbalance sheet
Net defined benefit liabilities
Net liabilities recorded in the consolidatedbalance sheet¥ 7,673(7,473)199
1,800¥ 5,108(5,106)2
1,915$ 38,258(38,240)
17
14,343¥ 1,999¥ 1,917$ 14,360

1,999

1,917

14,360¥ 1,999¥ 1,917$ 14,360(e) Components of retirement benefit expenses for the years ended March 31, 2022 and 2023 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Prior service cost
Redundancy pay
Retirement benefit expenses calculated based on thesimplified method
Others

¥ 424
40
(124)
33
(1)
7

¥ 363
34
(90)
16
(2)
(3)

$ 2,723
256
(674)
120
(17)
(25)

337
12

414
(10)

3,107
(77)

Retirement benefit expenses for defined benefit pension plans ¥ 730－
Gain on revision of retirement benefit plan

¥ 722
¥ 126

$ 5,412$943(f) Remeasurements of defined benefit plans, net of tax for the years ended March 31, 2022 and 2023 are as
follows:
Components of remeasurements of defined benefit obligations, net of tax before income tax effectadjustment-34 -Millions of Yen
2022
2023

Thousands of
U.S. Dollars
2023

Prior service cost
Actuarial gains and losses

¥

16
252

¥

(2)
65

$

(17)
493

Total

¥ 269

¥

63

$ 476

(g) Remeasurements of defined benefit obligations as of March 31, 2022 and 2023 are as follows:
Components of remeasurements of accumulated defined benefit obligations before income tax effectadjustment
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Unrecognized prior service cost
Unrecognized actuarial gains or losses

¥

16
272

Total

¥ 288

¥

14
338

¥ 352

$

105
2,532

$ 2,638(h) Items for plan assets
Components of plan assets
Ratio of primary components to total plan assets
2022

2023

General accounts
Other

73.25%
26.75%

100.00%－%Total

100.00%100.00%

Determining expected long-term rate of return
In determining the long-term rate of return for plan assets, the Company considers the current andprojected asset allocations, as well as the current and expected long-term investment returns from thevarious assets that constitute the plan assets.
(i) Items related to the basis of actuarial calculation
Items that form the primary basis for actuarial calculations using the weighted average method
2022
2023
0.43～0.67%
0.50～0.67%
Discount rate
1.50～2.50%
1.70～2.50%
Expected long-term rate of return(3) Defined contribution pension plans
Contributions to defined contribution pension plans by the Company and its consolidated subsidiaries
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
¥ 522

-35 -

¥ 425

$ 3,184

12.

INCOME TAXES(1) The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred
tax assets and liabilities at March 31, 2022 and 2023 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2022
2023
2023
Deferred tax assets:
Loss on revaluation of investment securities
Retirement benefits for directors and corporate auditors
Retirement benefits for directors (and other officers)
Allowance for doubtful accounts
Accrued bonuses
Net defined benefit liability
Tax loss carryforwards
Devaluation of inventories
Impairment loss
Deferred tax assets of the planned liquidation company
OthersSub-total
Valuation allowance on tax loss carryforwards
Valuation allowance on deductible temporary differences
Less valuation allowance—total

¥

862
38
401
728
972
619
1,794
806
851
2,379
9,453
(944)
(4,164)(5,109)

¥

891
44
401
1,499
1,245
561
1,273
245
961
16
2,834
9,976
(613 )(4,685 )(5,299)$ 6,673
336
3,005
11,231
9,330
4,203
9,540
1,835
7,201
125
21,22974,713(4,595)(35,092)(39,688 )Deferred tax assets—total

4,344

4,676

35,024

Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries
Unrealized gain on property and equipment
Unrealized gain on available-for-sale securities
Advanced depreciation on fixed assets
Others(2,845 )(95 )(734 )(171 )(354 )(3,515 )(89 )(1,157 )(163 )(222 )(26,326)(668)(8,668)(1,226)(1,669)Deferred tax liabilities—total(4,201 )(5,148 )(38,559)

142¥ (471 )$ (3,534)

Net deferred tax assets¥(Note)
1. Tax loss carryforwards and the amount of deferred tax assets by carry forward

March 31, 2022
Millions of Yen
Within1 yearTax loss carryforwards※
Less valuation allowance
Deferred tax assets¥

Over 1 year
within 2 years

114
(114)
－

¥

96
(48)
47

Over 2 years
within 3 years

¥

93
(54)
38

Over 3 years
within 4 years

¥

118
(79)
39

Over 4 years
within 5 years

¥

101
(94)
6

Over
5 years

¥

1,269
(552)
716

Total

¥

1,794
(944)
849

March 31, 2023
Millions of Yen
Within1 yearTax loss carryforwards※
Less valuation allowance
Deferred tax assets¥

Over 1 year
within 2 years

51
(51)
－

¥

78
(11)
66

Over 2 years
within 3 years

¥

117
(61)
55
-36 -

Over 3 years
within 4 years

¥

40
(35)
4

Over 4 years
within 5 years

¥

38
(29)
8

Over
5 years

¥

948
(424)
524

Total

¥

1,273
(613)
660

Thousands of U.S. Dollars
Within1 yearOver 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Tax loss carryforwards※
$ 384
$ 585
$
876
$
300
Less valuation allowance
(384)
(86)
(457)
(263)
－
Deferred tax assets
499
418
36
※Tax loss carryforwards are multiplied by the effective statutory tax rate.

Over 4 years
within 5 years

$

288
(224)
64

Over
5 years

$

Total

7,104
(3,178)3,926$(2) A reconciliation between the effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statements of operations for the years ended March 31, 2022 and 2023 is asfollows:
2022

2023

Effective statutory tax rate
Expenses not deductible for income tax purposesTax benefits not recognized on operating losses of subsidiaries
Difference in tax rates of foreign subsidiaries
Corporate residence tax on a per capita basis
Effects of reducing deferred tax assets
Dividends from overseas subsidiaries and deferred income taxes
on retained profits of overseas subsidiaries
Change in valuation allowance
Share of loss of entities accounted for using equity method
Others, net

30.6%
0.2
(0.3)
(5.6)
－
－

30.6%
0.4
(0.6)
(4.1)
0.2
1.7

3.0
(0.3)
0.7
(1.7)

(0.5)
－
(0.1)
1.2

Actual effective tax rate

26.6

28.9

(3) The Company and some of its domestic subsidiaries apply the Group Tax Sharing System from the
beginning of the consolidated fiscal year ended on March 31 2023. The Practical Solution on the Accounting
and Disclosure Under the Group Tax Sharing System (ASBJ Guidance No.42 August 12, 2021), which defines theaccounting and disclosure treatment of income taxes, local income taxes, and tax effect accounting, is also
applied.

-37 -

9,540
(4,595)
4,944

13.

REVENUE RECOGNITION

1. Disaggregated information of revenue recognized from contracts with customers
For the year ended March 31, 2022

Electronic
Components
Sales
Japan
North America
EuropeAsia
Revenue recognized fromcontracts with customer
Other Revenue
Sales toexternal customers

Millions of Yen
Reportable Segment
Information
SoftEquipment
Ware

Other

Total

¥ 201,861
34,062
16,840
181,037
433,80151¥ 38,946－－
1
38,948668¥ 2,750
17
－
－
2,767
－

¥ 18,675
22
33
305
19,036553¥ 262,233
34,101
16,874
181,344494,553
1,273

433,852

39,616

2,767

18,590495,827

For the year ended March 31, 2023

Electronic
Components
Sales
Japan
North America
EuropeAsia
Revenue recognized fromcontracts with customer
Other Revenue
Sales toexternal customers

Millions of Yen
Reportable Segment
Information
SoftEquipment
Ware

Other

Total

¥ 267,666
43,60623,746204,265
539,28557¥ 43,644－
0－43,64534¥ 2,969
－
－
29
2,998
－

¥ 20,276
73
38
1,005
21,394649¥ 334,557
43,67923,785
205,330
607,323741

539,342

43,6802,998

22,044

608,064

Thousands of U.S. Dollars

Electronic
Components
Sales
Japan
North America
EuropeAsia
Revenue recognized fromcontracts with customer
Other Revenue
Sales toexternal customers

Reportable Segment
Information
SoftEquipment
Ware

Other

Total

$ 2,004,544
326,565
177,834
1,529,738
4,038,681
429$ 326,854－
3－
326,857261$ 22,236－－
218
22,454－$ 151,852
550
290
7,533
160,225
4,862$ 2,505,486
327,115
178,127
1,537,489
4,548,217
5,552

4,039,110

327,118

22,454

165,087

4,553,769-38 -2. Basic information to understand revenue recognized from contracts with customers
Basic information is written in 2.”SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES o. Recognition of importantrevenue and expense.”
3. Information about the relationship between satisfaction of performance obligation and cash flow occurred fromthe contracts and information about revenue that will be recognized in the next fiscal year or after based on thecontracts at the end of this fiscal year.
(a) The balances of receivables from contracts with customers and contract liabilities

Millions of Yen
2022
2023
Receivables from contracts with customers(At the beginning of this fiscal year)
Receivables from contracts with customers(At the end of this fiscal year)
Contract liabilities(At the beginning of this fiscal year)
Contract liabilities(At the end of this fiscal year)

Thousands of
U.S. Dollars
2023¥ 108,329¥ 120,806$ 904,714

120,806

129,007966,133

3,419

4,180

31,310

4,180

4,066

30,455Contract liabilities mainly consists of amounts received from customers based on payment terms whereby
consideration is received prior to goods or services being transferred to customers and reverse when the relevant
revenue recognition criteria are met. Contract liabilities are included “Others” in current liabilities. Revenue that theCompany recognized during this fiscal year which was in included in contract liabilities at the beginning of this fiscal
year totaled ¥2,105 million ($15,767 thousand).
(b) Transaction price allocated to the remaining performance obligations
The Company and its subsidiaries apply a simplified method in respect of transaction price allocated to the remaining
performance obligations, whereby contracts that have an original expected duration of one year or less are notincluded. Those performance obligations all relate to business manufacturing and sales. The total transaction priceallocated to the remaining performance obligations and the expected periods of revenue recognition are as follows.

Millions of Yen
2022
2023
Within 1 year
More than 1 year and Within 2 year
More than 2 year and Within 3 year
More than 3 year
Total

¥ 79
76
66
162
385

-39 -

¥ 218
499
145
259
1,123

Thousands of
U.S. Dollars
2023$ 1,638
3,739
1,091
1,944
8,413

14.

SEGMENT INFORMATION(1) Description of reportable segments
The Group's reportable segments are those for which separate financial information is available andregular evaluation by the Company's management is being performed in order to decide how resources
are allocated among the Group. The Group has four reporting segments that are made of different
categories of products and services: electronic components, information equipment, software and others.
The electronic components segment includes the development, manufacture and sales ofsemiconductors, general electronic components and other products, the electronics manufacturingservice (EMS), and other activities. The information equipment segment includes sales of PCs, PC
peripherals, photograph and imaging products, original brand products, and other products. The software
segment includes the production of computer graphics, planning and development of amusement
products, and other activities.
The other segment includes the fix and support of electronic components, the manufacture and sale ofamusement equipment, sales of sports goods and other activities.
(2) Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items for eachreportable segment
The accounting policies of each reportable segment are consistent to those disclosed in Note 2.,"SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES".

-40 -(3) Information about sales, profit (loss), assets and other items is as follows:
Millions of Yen
2022
Reportable Segment
Electronic
Components
Sales:
Sales toexternal customers
Inter segment sales
or transfers¥ 433,852

Total sales¥ 436,586

Segment profit (loss)¥ 18,107
Segment assets
250,460
Others:Depreciation
2,237
Increase inproperty,plant and equipment
and intangible assets
4,362

Information
Equipment

Software

Other

Total

Reconciliations(Note 1)

Consolidated(Note 2)－¥ 495,827

15,257(15,257)－¥

45,019 ¥ 3,623 ¥ 25,855 ¥ 511,085¥ (15,257)¥ 495,827¥

2,085
20,435

¥

¥

¥

2,733

39,616 ¥ 2,767 ¥ 19,590 ¥ 495,827
5,402

855

¥

6,265

(26) ¥
626
1,612
11,707¥

20,792284,214¥122(12,074)

20,915272,139

54

53

136

2,481

(10)

2,471

121

24

146

4,654

－

4,654

Millions of Yen
2023
Reportable Segment
Electronic
Components
Sales:
Sales toexternal customers
Inter segment sales
or transfers¥ 539,342

Total sales¥ 542,850

Segment profit (loss)¥ 28,314
Segment assets
265,302
Others:Depreciation
3,529
Increase in-property,
plant and equipment
and intangible assets
3,728

Information
Equipment

Software

Other

Total

Reconciliations(Note 1)

Consolidated(Note 2)－¥ 608,064

19,689(19,689)－¥

50,935 ¥ 3,966 ¥ 30,001 ¥ 627,754¥ (19,689)¥ 608,064¥

2,449 ¥ 286 ¥ 1,101
22,7652,033
13,876

¥

¥

¥

3,508

43,680 ¥ 2,998 ¥ 22,044 ¥ 608,064
7,255

968

7,957

¥

32,152
303,978¥

97(17,761)

32,249286,217

105

41

337

4,014

(14)

4,000

60

62

310

4,162

(2)

4,159

-41 -

Thousands of U.S. Dollars
2023
Reportable Segment
Electronic
Components

Information
Equipment

Software

Other

Reconciliations(Note 1)

Total

Consolidated(Note 2)

Sales:
Sales toexternal customers
Inter segment sales
or transfers$ 4,039,109 $ 327,117 $ 22,453 $ 165,087 $ 4,553,769 $(147,456)－

Total sales$ 4,065,383 $ 381,456 $ 29,706 $ 224,678 $ 4,701,225 $ (147,456)$ 4,553,769

26,274

Segment profit (loss)$ 212,044
Segment assets
1,986,841
Others:Depreciation
26,435
Increase in-property,
plant and equipment
and intangible assets
27,91954,339$7,252

59,590147,456－$ 4,553,769

18,342 $ 2,147 $ 8,251 $ 240,786 $
729
170,491 15,230
103,919
2,276,482(133,012)$ 241,516
2,143,469

788

314

2,525

30,063(106)

29,956

451

469

2,328

31,169(18)

31,150Note: 1. The adjustment for segment operating income is as follows:(1) Segment income
Millions of Yen
2022
2023

Thousands of
U.S. Dollars
2023

Elimination of inter-segment trade
Amortization of goodwill

¥ 122
－

¥

97
－

$

729
－

Total

¥ 122

¥

97

$

729

(2) Segment assets

Millions of Yen
2022
2023

Thousands of
U.S. Dollars
2023

Elimination of inter-segment trade
Reconciliations¥ (14,176)
2,101¥ (19,823)
2,062$ (148,457)
15,444Total¥ (12,074 )¥ (17,761 )$ (133,012)

Note: Total corporate assets principally consist of surplus funds of the Companies under management (cashand securities).

-42 -(3) Depreciation and amortization
Millions of Yen
2022
2023

Thousands of
U.S. Dollars
2023

Elimination of inter-segment trade¥ (10)¥ (14)$ (106)Total¥ (10)¥ (14)$ (106)(4) Increase amount of tangible and intangible fixed assets
Millions of Yen
2022
2023

Thousands of
U.S. Dollars
2023

Elimination of inter-segment trade

¥ －

¥ (2)

$ (18)

Total

¥ －

¥ (2)

$ (18)

2. Segment income is adjusted for operating income in the consolidated statement of income andcomprehensive income.
Associated Information
For the year ended March 31, 2022
(1) Information about individual products and services
This information is not presented because the Group prepares reports in accordance with a management
approach based on individual products and services.
(2) Geographic information(a) Sales
Millions of Yen
2022
Japan
¥ 263,415

North
America¥ 34,101

Europe

Asia

Total

¥ 16,874¥ 181,436¥ 495,827

Note: Sales are classified in countries or regions based on the location of customers.
(b) Property, plant and equipment
Millions of Yen
2022
Japan

North
America¥11,336¥ 415

Europe
¥ 129

-43 -

Asia
¥

7,512

Total
¥ 19,393

Notes:1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographicalareas:(1) North America:(2) Europe:(3) Asia:

the United States, the United Mexican States
United Kingdom, Federal Republic of Germany, Czech Republic,
Russia and Republic of Turkey
Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand,
India, Indonesia and Vietnam(3) Information about major customers
This information is not presented because no sales to any individual customer were more than 10% ofconsolidated sales.
For the year ended March 31, 2023
(1) Information about individual products and services
This information is not presented because the Group prepares reports in accordance with a management
approach based on individual products and services.
(2) Geographic information(a) Sales

Japan

North America¥ 335,201¥ 43,679

Japan

North America$ 2,510,306$ 327,115

Millions of Yen
2023
EuropeAsia (except China)¥ 23,785¥ 131,143

Thousands of U.S. Dollars
2023
EuropeAsia (except China)$ 178,127$ 982,131

China¥ 74,254

China$ 556,089

Total¥

608,064

Total$ 4,553,769

Note: Sales are classified in countries or regions based on the location of customers.
(b) Property, plant and equipment

Japan

North America

Millions of Yen
2023
EuropeAsia (except Thailand)¥11,233¥ 1,411

¥ 84

Japan

North America

Thousands of U.S. Dollars
2023
EuropeAsia (except Thailand)$ 84,126$ 10,573$ 636¥ 5,270$ 39,473

Thailand¥ 2,157

Thailand$ 16,159

Total¥ 20,158

Total$ 150,969(3) Information about major customers
This information is not presented because no sales to any individual customer were more than 10% ofconsolidated sales.
-44 -Information of impairment loss on fixed assets of reportable segments
For the year ended March 31, 2022

Impairment loss

Millions of Yen
2022
Reportable Segment
Information
SoftEquipment
ware
¥ －
¥ －

Other
¥ 47

Total
¥ 93

Electronic
Components¥ 618

Millions of Yen
2023
Reportable Segment
Information
SoftEquipment
ware
¥ －
¥ －

Other
¥ 25

Total
¥ 644

Electronic
Components$ 4,631

Thousands of U.S. Dollars
2023
Reportable Segment
Information
SoftEquipment
ware
Other
$ －
$ －
$ 192

Total
$ 4,823

Electronic
Components¥ 45

For the year ended March 31, 2023

Impairment loss

Impairment loss

Information of amortization of goodwill and balance of goodwill of reportable segments
For the year ended March 31, 2022

Electronic
Components
Amortization of
goodwill for fiscal
year
Balance of goodwill
at the end of fiscal
year

Millions of Yen
Reportable Segment
Information
SoftEquipment
ware
Other

Total

Reconciliations

Consolidated

¥ 110

¥ －

¥ －

¥ －

¥ 110

¥ －

¥ 110

98

－

－

－

98

－

98

For the year ended March 31, 2023

Electronic
Components
Amortization of
goodwill for fiscal
year
Balance of goodwill
at the end of fiscal
year

Millions of Yen
Reportable Segment
Information
SoftEquipment
Ware
Other

Total

Reconciliations

Consolidated

¥ 50

¥ －

¥ －

¥ 3

¥ 54

¥ －

¥ 54

48

－

－

－

48

－

48

-45 -

Electronic
Components
Amortization of
goodwill for fiscal
year
Balance of goodwill
at the end of fiscal
year

Thousands of U.S. Dollars
Reportable Segment
Information
SoftEquipment
ware
Other
Total

Reconciliations

Consolidated

$ 376

$ －

$ －

$ 29

$ 406

$ －

$ 406

363

－

－

－

363

－

363

Information of gain on negative goodwill by reportable segments
For the year ended March 31, 2022
No significant items to be reported.
For the year ended March 31, 2023
No significant items to be reported.

15. RELATED PARTY TRANSACTIONS(1) Principal transactions between the Company and its related party
For the year ended March 31, 2022
Principal transactions between the Company and its related party for the year ended March 31, 2022 aresummarized as follows:(Amount unit: Millions of yen, Thousands of U.S. dollars)
Type

Major
stockholder

Company
Name

Head
OfficeSankyoCo., Ltd.

Shibuyaku,
Tokyo

CapitalShareBusiness
Activities

Percentage
forPossession of
Voting Rights¥14,840

Manufactu
ring andsales ofgame
machines

Owned
directly
9.24%

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

Title of
Account

Amount asof March
31, 2020－

Acquisitionof ownshares (Note)¥3,674－－

Note:
Treasury shares have been repurchased through Tokyo Stock Exchange Trading Network Off Auction Own Share
Repurchase Trading System (ToSTNeT-3) on August 5,2021, at the price of ¥2,983, based on Board of Directors
Resolution on August 5, 2021. As a result of the acquisition of treasury shares, Sankyo Co., Ltd. is removed
from the major shareholders of the Company and is no longer a related party.
For the year ended March 31, 2023
This information is not presented due to its insignificance.

-46 -(2) Principal transactions between the Company’s director and its related party
For the year ended March 31, 2022
Principal transactions between the Company’s director and its related party for the year ended March 31, 2022
are summarized as follows:(Amount unit: Millions of yen, Thousands of U.S. dollars)TypeCompany
Name orDirector
Name

Head
OfficeMajority
owned
company
by adirectorand thedirector’s
relatives

KGF CO.,LTD.

Chiyoda-ku,
Tokyo

CapitalStockBusiness
Activities or
Occupation¥10

Managementof restaurant
andconvenience
store

Percentage
forPossession of
Voting Rights

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

Title of
Account

Amount asof March
31, 2022－

Interlocking
directorate

Purchasing
goods,
Purchasing
gifts(Note)¥8－－

Note: Trade condition and policy
Purchase contracts are entered into between KGF and the Company, and the purchase price of goods isdetermined based on the discussions between the two parties.
The Company concluded the contract purchasing gifts at a price equivalent to market price.
For the year ended March 31, 2023
Principal transactions between the Company’s director and its related party for the year ended March 31, 2023
are summarized as follows:(Amount unit: Millions of yen, Thousands of U.S. dollars)TypeCompany
Name orDirector
Name

Head
OfficeCapitalStockBusiness
Activities or
Occupation

Majority
owned
company
by adirectorand thedirector’s
relatives

KGF CO.,LTD.

Chiyoda
-ku,
Tokyo

¥10
($74)

Managementof restaurant
andconvenience
store

Percentage
forPossession of
Voting Rights

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

Title of
Account

Amount asof March
31, 2022－

Interlocking
directorate

Purchasing
goods,
Purchasing
gifts(Note)

¥10
($79)

－

－

Note: Trade condition and policy
Purchase contracts are entered into between KGF and the Company, and the purchase price of goods isdetermined based on the discussions between the two parties.
The Company concluded the contract purchasing gifts at a price equivalent to market price.
16.

PER SHARE INFORMATION
Yen

U.S. Dollars
2023

2022

2023

Net assets per share¥ 4,026.22¥ 4,935.36$ 36.96

Net income per share

576.45878.65

6.58

-47 -

Notes 1. Diluted net income per share has not been disclosed because there were no potentially dilutive
shares.
2. The basis for computation of net income per share is as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2022
Net income per share
Profit attributable to owners of theparent
Net income unallocated to common
stockProfit attributable to owners of theparent allocated to common stock
Average number of common stock
outstanding during the fiscal year
(Share)¥2023

23,070$ 172,776－－－

15,401

23,070172,776

26,717,972

26,257,182－－

Outline of the residual securities whichwere not included in the calculation of
the diluted net income per sharebecause there was no dilutive effect.

15,401¥

3. The basis for computation of net assets per share is as follows:
Millions of Yen

Net assets per share
Total net assets
Amount deducted from total net assets(Non-controlling interests)
Net assets corresponding to common stockat the end of the fiscal year
Number of common stock shares used forthe calculation of net assets per share(Share)Thousands of
U.S. Dollars
2023

2022

2023

¥ 105,800
120
(120)

¥ 129,737
129
(129)

$ 971,599
970
(970)

105,680

129,608

970,629

26,247,956

26,261,135

-48 -

17.
18.

SIGNIFICANT SUBSEQUENT EVENTS
Not applicableCONSOLIDATED SUPPLEMENTARY SCHEDULE(1) Schedule of bonds

Company

KAGA
ELECTRONICS
CO.,LTD.

Type of bonds

2022

Unsecured
corporatebonds (first)
on June 26,
2022
Unsecured
corporatebonds(second)on June 26,
2022－$ 37,444

Interest
rate (%)
0.40%

Security
Unsecured

Maturity
June 23,2025

37,4440.50%

Unsecured

June 23,
2027

2023

2023

－

¥ 5,000－

5,000¥ 10,000$ 74,888－－－
Notes:The repayment schedule of bonds per year for 5 years subsequent to March 31, 2023 is summarized as follow

Over 3 years
within 4 years－

Millions of Yen
Over 2 years
within 3 years¥ 5,000

Over 3 years
within 4 years－

Thousands of U.S. Dollars
Over 2 years
within 3 years$ 37,444

Over 1 year
within 2 years

Within 1year－

Over 1 year
within 2 years

Within 1year－－－

Over 4 years
within 5 years¥ 5,000－

Over 4 years
within 5 years$ 37,444(2) Schedule of loans
Millions of Yen
Category
Short-term loans
payableCurrent portion of
long-term loans
payableCurrent portion oflease obligations
Long-term loans
payable(excluding current
portion)Lease obligations(excluding current
portion)
Other interestbearing debt
Total

Thousands of
U.S. Dollars
2023

Interest
rate (%)

Maturity

2022

2023

¥ 18,821¥ 14,545$ 108,929

4.94%

－

5,036

5,040

37,744

0.50%

－

733

688

5,156

2.92%

－

25,136

10,60079,3820.55%

2024 to 2028

1,442

1,064

7,974

3.38%

2024 to 2028

－

－

－

－

¥ 51,171¥ 31,938$ 239,188

-49 -

－

Notes:
1. Interest rates are stated at weighted average interest rates based on the average balance of borrowings for the year.
2. The repayment schedule of long-term loans payable and lease obligations (excluding current portion) per year for 5 years
subsequent to March 31, 2023 is summarized as follow

Category
Long-term
loans
payableLease obligations
Total

Category
Long-term
loans
payableLease obligations
Total

Over 1 year
within 2 years
¥
¥

100
538
638

Over 1 year
within 2 years
$ 748
4,030
$ 4,779

Millions of Yen
Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

¥

¥

¥

¥

5,000
230
5,230

Thousands of U.S. Dollars
Over 2 years
within 3 years$ 37,444
1,728$ 39,173

¥

1,000
143
1,143

Over 3 years
within 4 years$ 7,488
1,074$ 8,562

¥

4,500
117
4,617

Over 4 years
within 5 years$ 33,700
883$ 34,583(3) Schedule of asset retirement obligations
According to the Article 92-2 of the “Regulations for Consolidated Financial Statements,” schedule of asset
retirement obligations is not presented, as the amount of asset retirement obligations is less than 1 percent of thetotal amount of liabilities and net assets.

-50 -