CONSOLIDATED FINANCIAL STATEMENTS
TAMURA CORPORATIONAS OF MARCH 31, 2021

Independent Auditor’s Report

The Board of Directors
TAMURA CORPORATION

OpinionWe have audited the accompanying consolidated financial statements of TAMURACORPORATION and its consolidated subsidiaries (the Group), which comprise the consolidatedbalance sheet as at March 31, 2021, and the consolidated statements of income, comprehensive
income, changes in net assets, and cash flows for the year 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 at March 31, 2021, and its
consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities 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 Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.

Recoverability of deferred tax assets
Description of Key Audit Matter

Auditor’s Response

As of March 31, 2021, deferred tax assets inthe amount of 293 million yen were recordedin the consolidated balance sheet, and related
disclosures are included in Note 14 to theconsolidated financial statements. The
deferred tax assets recorded on a standalone
basis for Tamura Corporation (the Company)
were150 million yen.

The audit procedures we performed to assess
the recoverability of deferred tax assets
included the following, among others:
・ We examined the amount of deductible
temporary differences and tax loss
carryforwards, as well as the schedule of thetiming when they are expected to be utilized
or expire.

The Company determines the recoverability of ・ In order to assess the estimate of futuredeferred tax assets for deductible temporary
taxable income, we examined thedifferences and tax loss carryforwards by
underlying Management Plan for the fiscal
estimating taxable income based on futureyear ending March 31, 2022, which was
profitability.
approved by the Board of Directors.
The estimate of taxable income based on ・In order to assess the effectiveness of the
future profitability is based on theestimation process as part of management’s
Management Plan for the fiscal year ending
planning, we compared the Management
March 31, 2022. The significant assumptions
Plans in prior years with the actual results.
involved are sales by business segment and thecorresponding cost ratios. The Company ・With regard to sales by business segment andthe corresponding cost ratios, which are thepresents these significant assumptions as wellsignificant assumptions included in theas the impact of COVID-19 in Note 3 to theManagement Plan for the fiscal year ending
consolidated financial statements.
March 31, 2022, we discussed with
Estimates of sales by business segment and the
management and compared the results ofcorresponding cost ratios involve a hightrend analysis based on past performance
degree of uncertainty due to the potential
with available external data. We also
difference between the actual order volume
discussed the impact of COVID-19 withand the forecast, as well as higher thanmanagement and assessed management’s
expected increases in material prices, and if
assumptions regarding the timing of when it
the estimated amount of taxable income
will be contained and the market trends
fluctuates, that has a significant impact onafterwards.
management’s judgement in assessing therecoverability of deferred tax assets. Therefore ・We examined management’s evaluation of
uncertainty, which reflects a certain level of
we determined this to be a key audit matter.
risk in the Management Plan for the fiscal
year ending March 31, 2022.

Responsibilities of Management, the Corporate Auditor and the Board of Corporate
Auditors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan, and forsuch 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 required by accounting principles
generally accepted in Japan, matters related to going concern.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing theGroup’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 toissue an auditor’s report that includes our opinion. 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 tothose risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’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 ofaccounting 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 tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s 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 the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation inaccordance with accounting principles generally accepted in Japan.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the groupaudit. We remain solely responsible for our audit opinion.
We communicate with the Corporate Auditor and the Board of Corporate Auditors
regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statement that
we have complied with the ethical requirements regarding independence that are relevant to our
audit of the financial statements in Japan, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with the Corporate Auditor and the Board of Corporate
Auditors, we determine those matters that were of most significance in the audit of theconsolidated 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 the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
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 ofJapan.

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2021 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(a) to the consolidated financial statements.

Ernst & Young ShinNihon LLC
Tokyo, Japan
June 25, 2021
Takaki Hirota
Designated Engagement Partner
Certified Public Accountant
Yohei Ikeda
Designated Engagement Partner
Certified Public Accountant

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEET

Millions of yen
March 31,
2021
2020

Thousands of
U.S. dollars(Note 1(a))
March 31,2021

17,598$ASSETS
Current Assets:
Cash on hand and in banks (Notes 4 and 5)¥¥

16,669158,541

Trade notes and accounts receivable (Note 5)

19,08420,853

171,928

Inventories (Note 7)
Other current assets

14,233
2,509

13,1972,476

128,225
22,604

(88)

(81)

(793)

53,336

53,114

480,505

Buildings and structures

21,913

20,239197,414

Machinery and equipment

26,356

26,668237,441

Allowance for doubtful accounts
Total current assets
Property, Plant and Equipment: (Note 15)

Lease assets

3,930

4,233

35,40552,19951,140470,260

Accumulated depreciation(32,218)(31,493)(290,252)

Land

19,981
5,121

19,6475,136

180,008
46,135Construction in progress

2,132

1,899

19,207

27,234

26,682

245,350

1,575

1,329

14,189subsidiaries and affiliates

2,562

2,461

23,081

Net defined benefit asset (Note 9)

4,122

2,346

37,135

Deferred tax assets (Note 14)
Intangible assets

293
1,406

628
1,490

2,640
12,667

591

611

5,324

Property, plant and equipment, net
Investments and Other Assets:
Investment securities in other than non-consolidated

subsidiaries and affiliates (Notes 5 and 6)
Investment securities in non-consolidated

Other assets
Allowance for doubtful accounts

(55)

(68)

(495)

Total investments and other assets

10,494

8,797

94,541

Total assets¥

91,064

The accompanying notes are an integral part of these statements.

2¥

88,593$820,396

Millions of yen
March 31,
2021
2020

Thousands of
U.S. dollars(Note 1(a))
March 31,2021

11,923$

LIABILITIES AND NET ASSET
Current Liabilities:
Trade notes and accounts payable (Note 5)¥¥

11,943

107,414

Short-term loans (Notes 5 and 8)

5,879

4,924

52,964Current portion of long-term debt (Notes 5 and 8)

3,903

309

35,162

Lease obligations (Notes 5 and 8)

708

973

6,378

Income taxes payable (Note 5)

455

394

4,099

Accrued bonuses
Accrued bonuses for directors

941
48

923
46

8,477
433

Other current liabilities

3,021

2,858

27,217

26,87822,370242,144

Long-term debt (Notes 5 and 8)

9,804

13,58688,324

Lease obligations (Notes 5 and 8)

2,224

2,506

20,036

Deferred tax liabilities (Note 14)
Net defined benefit liability (Note 9)
Other long-term liabilities

1,109
2,454
452

92
2,920
455

9,991
22,108
4,072

16,043

19,559144,531

11,82911,829106,568

Additional paid-in capital

17,01917,019153,324

Retained earnings
Treasury stock (Note 11)19,006(243)

19,121(256)

171,225(2,189)Total shareholders' equity

47,61147,713428,928

11

(268)

99

(1)

0

(9)

(595)

(402)

(5,361)

Total current liabilities
Long-term Liabilities:

Total long-term liabilities
Net Assets
Shareholders' Equity:
Common stock:
Authorized - 252,000,000 shares
Issued and outstanding – 82,771,473 shares

Accumulated Other Comprehensive Income:Unrealized holding gain (loss) on securities
Deferred gain (loss) from hedging instruments(Notes 5 and 16)
Translation adjustments
Retirement benefits liability adjustments (Note 9)
Total accumulated other comprehensive income
Share subscription rights
Non-controlling interests

861

(633)

7,757

276
162

(1,303)
161

2,486
1,460

94

93

847

48,143

Total net assets¥

Total liabilities and net assets

91,064

The accompanying notes are an integral part of these statements.

3

46,664¥88,593433,721$820,396

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF INCOME ANDCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(CONSOLIDATED STATEMENT OF INCOME)

2020

Thousands of
U.S. dollars(Note 1(a))
Year ended
March 31,2021

79,655$

Millions of yen
Year ended March 31,
2021¥

Net Sales

73,906¥

665,820

Cost of Sales (Note 13)
Gross profit

52,686
21,22057,18522,470474,649
191,171

Selling, general and administrative expenses(Notes 12, 13 and 20)
Operating income

19,251
1,969

20,181
2,289

173,432
17,739

116
176

157
161

1,045
1,586

(346)
(175)

(321)
61

(3,117)(1,577)

(8)

(101)

(72)

1,284
(748)

501
(277)

11,567(6,739)

299
2,268

181
2,470

2,693
20,432

955
760

862
585

8,603
6,847

1,715
553

1,447
1,023

15,450
4,982

11
542

(1)
1,024

99
4,883

Other Income (Expenses):
Interest and dividend income
Equity in earnings of affiliates
Interest expense
Foreign exchange gain (loss)
Unrealized loss on derivative financial
instruments
Other income
Other expenses
Profit before income taxes
Income Taxes (Note 14)
Current
DeferredProfitProft attributable to:Non-controlling interests
Owners of parent

¥

¥
Yen

$

U.S. dollars

Per Share:
Basic profit attributable to owners of parent
Diluted profit attributable to owners of parent
Cash dividends per share

¥

6.61
6.57
8.00

The accompanying notes are an integral part of these statements.

4

¥

12.48
12.40
10.00

$

0.06
0.06
0.07

(CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME)

Millions of yen
Year ended March 31,
2021
Profit¥Other Comprehensive Income (Note 10):
Unrealized holding gain (loss) on securities

2020

553

¥

1,023

Thousands of
U.S. dollars(Note 1(a))
Year ended
March 31,
2021
$

4,982

279

(347)

2,513

Deferred gain (loss) from hedging instruments
Translation adjustments

(1)
(213)

0
(311)

(9)
(1,919)Retirement benefits liability adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total other comprehensive income
Comprehensive income

1,494

159

13,460

16

(56)

144

¥

1,575
2,128

¥

(555)
468

$

14,18919,171

Total comprehensive income attributable to:
Owners of parent

¥

2,122

¥

461

$

19,117

Non-controlling interests

6

The accompanying notes are an integral part of these statements.

5

7

54

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

F or the year en ded Mar c h 31, 2021
Millions of yen
Shareholders’ equity
Number ofsharesissuedBalance at April 1, 2020

82,771,473

Additional
paid-inCommonstock¥

Retainedearnings

capital11,829¥17,019¥19,121

Treasurystock(Note 11)

Total
shareholders'equity

¥

¥

(256)

47,713

Changes during the year
Cash dividends paid
Profit attributable to ownersof parent for the period
Purchases of treasury stock

(656)

(656)

542

542

Disposal of treasury stock

(1)

(0)

(0)

13

12

Net changes in items otherthan those in shareholders’equity－Total changes during the year
Balance as of March 31, 2021

82,771,473¥－
11,829¥－17,019(115)
19,006

¥

13
(243)

¥

(102)
47,611¥Millions of yen
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2020

Retirement

Total

benefits

accumulated

Deferredholding gain

gain(loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

subscription

controllingsecurities

instruments

adjustments(Note 9)incomerightsinterests

Total net
assets¥¥¥(268) ¥

0¥(402) ¥

(633) ¥

(1,303) ¥161

93

46,664

Changes during the year
Cash dividends paid

(656)

Profit attributable to ownersof parent for the period
Purchases of treasury stock

542
(0)

Disposal of treasury stock

12

Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2021

279

¥

279
11

¥

(1)

(193)

1,494

(1)
(1) ¥

(193)
(595) ¥

1,494
861

6

1,579

¥

1,579
276

1

¥

1
162

1

¥

1
94

1,581

¥

1,479
48,143

F or th e year en ded Mar c h 31, 2020
Millions of yen
Shareholders’ equity
Number ofsharesissuedBalance at April 1, 201982,771,473

Additional
paid-inCommonstock¥

Retainedearnings

capital11,829¥17,038¥18,924

Treasurystock(Note 11)

Total
shareholders'equity

¥

¥

(274)

47,517

Changes during the year
Cash dividends paid
Profit attributable to ownersof parent for the period
Purchases of treasury stock
Disposal of treasury stock(1)

Changes in the Company's
equity due to transactions
with noncontrolling interests

(18)

(821)

(821)

1,024

1,024

(6)

(0)

(0)

18

11
(18)

Net changes in items otherthan those in shareholders’equity－Total changes during the year
Balance as of March 31, 2020

82,771,473－
11,829¥(19)
17,019¥¥197
19,121

18
(256)

¥

¥

196
47,713

Millions of yen
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2019

Retirement

Total

benefits

accumulated

Deferredholding gain

gain(loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

subscription

controllingsecurities

instruments

adjustments(Note 9)incomerightsinterests

¥

¥

¥

78

－

(37) ¥(793) ¥

(752) ¥

153

¥

237

Total net
assets¥47,155

Changes during the year
Cash dividends paid

(821)

Profit attributable to ownersof parent for the period
Purchases of treasury stock

1,024
(0)

Disposal of treasury stock

11

Changes in the Company's
equity due to transactions
with noncontrolling interests(18)

Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2020

¥

(346)

0

(346)
(268) ¥

0
0

¥

7

(365)

160

(365)
(402) ¥

160
(633) ¥

(551)

8

(551)
(1,303) ¥

8
161

(144)

¥

(144)
93 ¥

(687)
(491)
46,664

F or the year en ded Marc h 31, 2021

Number ofsharesissuedBalance at April 1, 2020

82,771,473

Commonstock$

106,568

Thousands of U.S. dollars (Note 1(a))
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 11)

Total
shareholders'equity$$153,324$

172,261$(2,306)429,847

Changes during the year
Cash dividends paid

(5,910)(5,910)

Profit attributable to ownersof parent for the period

4,883

4,883

Purchases of treasury stock
Disposal of treasury stock

(9)

－

(0)

(0)

117

108

Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2021

82,771,473$－
106,568$－
153,324$(1,036)
171,225$

117(2,189)$(919)
428,928

Thousands of U.S. dollars (Note 1(a))
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2020

Retirement

Total

benefits

accumulated

Deferredholding gain

gain(loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

subscription

controllingsecurities

instruments

adjustments(Note 9)incomerightsinterests

Total net
assets$ (2,414)$$ (3,622)$ (5,703)$ (11,739)$ 1,450$$ 420,396

0838

Changes during the year
Cash dividends paid

(5,910)

Profit attributable to ownersof parent for the period

4,883

Purchases of treasury stock
Disposal of treasury stock

(0)
108

Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2021

2,513

$

2,513
99

(9)

$

(1,739)(9)(1,739)(9) $ (5,361)

13,460$13,4607,757$

The accompanying notes are an integral part of these statements.

8

14,225

10

14,2252,486

10$ 1,460$

914,2449847

13,325$ 433,721

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF CASH FLOWS
Thousands of

U.S. dollars(Note 1(a))

Millions of yen

Year ended March 31,
2021

Cash Flows from Operating Activities:¥
Profit before income taxes
Depreciation
Changes in accrued bonuses
Changes in accrued bonuses for directors
Changes in allowance for doubtful accounts
Changes in net defined benefit liability
Interest and dividend income
Interest expense
Foreign exchange loss
Equity in earnings of affiliates
Loss (gain) on sales of investment securities
Changes in trade receivable
Changes in inventories
Changes in trade payable
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities:
Transfers to time deposits
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from sale of affiliated companies
Other
Net cash used in investing activities
Cash Flows from Financing Activities:
Changes in short-term loans
Increase in long-term debt
Repayment of long-term debt
Repayment of lease obligations
Purchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling shareholders
Additional investments in consolidated subsidiaries
Net cash provided by (used in) financing activities
Effect of Exchange Rate Changes on Cash andCash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at the Beginningof the Year
Cash and Cash Equivalents at the Endof the Year (Note 4)

¥

2,268
3,491
18
1
(5)
(190)
(116)
346
(8)
(176)
(208)
1,742
(1,048)
(110)
58
6,063
173
(338)
(849)
5,049

¥

2,470
3,266
(132)
(29)
29
(372)
(157)
321
51
(161)
0
1,067
44
(45)
545
6,897
266
(320)
(1,387)
5,456$

20,432
31,450162
9(45)(1,712)(1,045)
3,117(72)(1,586)(1,874)
15,694(9,441)(991)
523
54,621
1,559(3,045)(7,649)45,486145(3,764)
29
(44)
307
－
275
(3,052)(399)(4,438)
405
(297)
0
39
(283)
(4,973)

1,306(33,910)
261
(396)
2,766
－
2,478
(27,495)

996
152
(236)
(1,019)
(0)
0
(654)
(6)
－
(767)

(2,555)
4,557
(284)
(873)
(0)
0
(817)
(7)
(162)
(141)

8,973
1,369
(2,126)(9,180)(0)
0(5,892)(54)－(6,910)

(160)

(66)

(1,441)

1,070

276

9,640

16,117

15,841

145,198

17,187

The accompanying notes are an integral part of these statements.

9

2020

Year ended
March 31,2021¥

16,117$

154,838TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies(a) Basis of presentation of the consolidated financial statements
The accompanying consolidated financial statements of TAMURACORPORATION (the “Company”) and its consolidated subsidiaries (collectively,
the “Companies”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and havebeen compiled from the consolidated financial statements prepared by theCompany as required by the Financial Instruments and Exchange Law of Japan.
Certain items presented in the consolidated financial statements submitted to the
Director of Kanto Local Finance Bureau in Japan as required by the Financial
Instruments and Exchange Law of Japan have been reclassified for theconvenience of readers outside Japan.
Amounts in U.S. dollars are included solely for the convenience of readers outside
Japan. The rate of ¥111=U.S. $1, the approximate rate of exchange on March 31,
2021 has been used in translation. The inclusion of such amounts is not intended
to imply that Japanese yen have been or could be readily converted, realized or
settled in U.S. dollars at the above rate or any other rate.
(b) Principles of consolidation and accounting for investments in non-consolidated
subsidiaries and affiliates
The accompanying consolidated financial statements include the accounts of theCompany and, with the exception of entities which are not material, those of its 32
majority owned subsidiaries. All significant inter-company accounts andtransactions have been eliminated on consolidation.
Effective from the year ended March 31, 2021, TAMURA KAKEN (U.K.) LTD. was
excluded from consolidation because of its liquidation. TAMURA DISTRIBUTION
CENTER INC. was excluded from consolidation because it was absorbed in
Absorption-type Merger by the Company.
Investments in non-consolidated subsidiaries and affiliates are carried at cost
since their total assets, net sales and the Company’s interests in their net income(loss), or retained earnings, in aggregate, do not have a material effect on the
consolidated financial statements.
The fiscal year end of the foreign consolidated subsidiaries is December 31. The
necessary adjustments for significant transactions between the fiscal year end of
the Company and the fiscal year end of the foreign consolidated subsidiaries, ifany, are made in the preparation of the consolidated financial statements.
(c) Financial instruments(1) Derivatives
All derivatives are stated at fair value, with changes in fair value included in
net profit or loss for the period in which they arise, except for derivatives
designated as “hedging instruments” (see Note 1(c)(3) Hedge accounting
below).
10

(2) Securities
Securities held by the Companies are classified as follows:
Available-for-sale securities with market values are stated at fair value. Net
unrealized gains and losses on these securities are reported as a separate
component of shareholders’ equity at a net-of-tax amount.
Available-for-sale securities without market values are stated at cost
determined by the moving average method, except as stated in the paragraphbelow.
In cases where the fair value of equity securities issued by non-consolidated
subsidiaries and affiliates, or available-for-sale securities, has declined
significantly and such impairment of the value is not deemed temporary, thesesecurities are written down to their fair value and the resulting losses areincluded in net profit or loss for the period.
(3) Hedge accounting
Deferral hedge accounting is adopted for derivatives which qualify as hedges,
under which unrealized gain or loss is deferred as a component of net assets.
The derivatives designated as hedging instruments by the Companies are
principally forward exchange contracts and interest rate swaps. The
underlying hedged items are trade accounts receivable and trade accounts
payable denominated in foreign currencies, forecast transactions denominatedin foreign currencies and interest on long-term bank loans.
The Companies have a policy to utilize the above hedging instruments in orderto reduce the Companies’ exposure to the risk of exchange rate and interest
rate fluctuations. Thus, the Companies’ purchases of the hedging instruments
are limited to, at maximum, the amount of the hedged items.
The Companies evaluate the effectiveness of their hedging activities byreference to the accumulated gains or losses on the hedging instruments andthe underlying hedged items from the commencement of the hedges.
(d) Allowance for doubtful accounts
Allowance for doubtful accounts is provided based on past experience for normal
receivables and on an estimate of collectability of receivables from companies infinancial difficulty.
(e) Inventories
Inventories are principally stated at cost determined by the following methods:
・Finished goods and work-in-process:Electronic Components business, Electronic Chemicals business andInformation Equipment business: Mainly periodic average method(Inventories with lower profitability are written down)
FA Systems business: Specific identification method (Inventories with lower
profitability are written down)
11

・Merchandise and raw materials: Mainly periodic average method (Inventories
with lower profitability are written down)
・Supplies: Mainly last purchase price method (Inventories with lower
profitability are written down)(f) Property, plant and equipment, and depreciation (excluding lease assets)
Property, plant and equipment, including significant capital expenditures andadditions, are stated at cost and are principally depreciated using the decliningbalance method at rates based on the estimated useful lives of the assets. Repairs
and maintenance expenses are charged to income as incurred.
Intangible assets are amortized by the straight-line method over their respective
estimated useful lives.
(g) Accrued bonuses
The Company and its domestic consolidated subsidiaries have provided theestimated amounts of bonus to employees.
(h) Reserve for directors’ bonus
The Company and its domestic consolidated subsidiaries have provided theestimated amounts of directors’ bonus as a reserve for directors’ bonus.
(i) Reserve for retirement benefits
The reserve for retirement benefits represents the estimated present value of
projected benefit obligations in excess of the fair value of the plan assets.
The unrecognized prior service costs are amortized on a straight-line basis over a
period of 12 years from the year in which they arise. The unrecognized actuarial
differences are amortized on a straight-line basis over a period of mainly 12 years
from the year following the year in which they arise.
(j) Reserve for loss of transfer
Reserve for loss on office transfer, etc. for consolidated subsidiaries is provided at
the estimated amount of future loss related to non-cancelable periods of realestate leasing contracts.
(k) Amortization of goodwill
Goodwill is amortized on a straight-line basis over 10 years.
(l) Income taxes
The income taxes of the Company and its domestic consolidated subsidiaries
consist of corporate income taxes, local inhabitant taxes and enterprise taxes.
Deferred income taxes were determined using the assets and liabilities approach,whereby deferred tax assets and liabilities were recognized in respect of
temporary differences between the tax basis of assets and liabilities and those asreported in the financial statements.

12Deferred tax assets relating to tax loss carryforwards are recorded because theJapanese accounting standard requires that the benefit of tax loss carryforwards
be estimated and recorded as an asset, with deduction of a valuation allowance if
it is expected that some portion or all of the deferred tax assets will not berealized.
(m) Foreign currency translation
All monetary assets and liabilities of the Company and its domestic consolidated
subsidiaries denominated in foreign currencies, whether long-term or short-term,
are translated into Japanese yen at the exchange rates prevailing at the balance
sheets dates. The foreign exchange gains and losses from translation arerecognized in the statements of income to the extent that they are not hedged byforward exchange contracts. Revenue and expenses are translated using the
average exchange rates for the respective periods.
The balance sheet accounts of the foreign consolidated subsidiaries are translated
into yen at the rate of exchange in effect at the balance sheet date. Revenue
accounts and expense accounts of the foreign consolidated subsidiaries aretranslated into yen at the average exchange rate for the year. Differences arisingfrom the translation are presented as translation adjustments and minority
interests in the consolidated financial statements.
(n) Accounting for consumption tax
Transactions subject to consumption taxes are recorded at amounts exclusive ofconsumption taxes.
(o) Profit per share
Basic profit per share of common stock is computed on the basis of the weighted
average number of shares of common stock outstanding during the respective
years, and diluted profit per share of common stock is computed on the basis of
the weighted average number of shares of common stock outstanding during therespective year after giving effect to the dilutive potential of shares of common
stock to be issued upon the exercise of stock options. Cash dividends per sharerepresent the dividends declared as applicable to the respective period.
The basis of the calculation of basic profit per share and diluted profit per sharefor the years end ed March 31, 2021 and 2020 were as follows:
Thousands of
U.S. dollars
2021

Millions of yen
2021
Basic profit per share
Profit attributable to owners of parent forthe period
Amount not attributable to common stock
Total profit attributable to common stock
Average number of shares outstanding during the year
[thousands of shares]

2020

¥

542

¥

1,024

$

4,883

¥
¥

－
542

¥
¥

－
1,024

$
$

－
4,883

82,122

82,066

82,122

506

514

506

Diluted profit per share
Increase in common stock:
Subscription rights to shares[thousands of shares]13

2. Unapplied Accounting Standards, etc.
Accounting Standard for Revenue Recognition and Related Implementation
Guidance
Guidance on Disclosures about Fair Value of Financial Instruments
On March 31, 2020, the Accounting Standards Board of Japan (ASBJ) issued therevised “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29),
and on March 26, 2021, “Implementation Guidance on Accounting Standard for
Revenue Recognition” (ASBJ Guidance No. 30).
On March 31, 2020, The ASBJ issued “Guidance on Disclosures about Fair Value of
Financial Instruments” (ASBJ Guidance No. 19)(a) Overview
The International Accounting Standards Board (IASB) and the US Financial
Accounting Standards Board (FASB) co-developed a new comprehensive revenue
recognition standard and issued “Revenue from Contracts with Customers” inMay 2014 (IFRS 15 by the IASB, ASC 606 by the FASB). Considering that IFRS
15 is applied from fiscal years beginning January 1, 2018 and ASC 606 from fiscal
years beginning after December 15, 2017, the ASBJ developed comprehensive
accounting standards for revenue recognition and issued them together with theimplementation guidance. The fundamental policy for developing the accounting
standard for revenue recognition by the ASBJ was that the accounting standard
would incorporate the fundamental principles of IFRS 15 as the starting pointfrom the perspective of comparability of financial statements, which is the one of
the benefits of achieving consistency with IFRS 15. For matters to be taken into
consideration in Japan with regard to accounting practices, etc., alternative
treatments are provided within a range that would not impair financial statementcomparability.
(b) Scheduled date of adoption
The Company expects to adopt the accounting standard from the beginning of the
fiscal year ending March 31, 2022.
(c) Impact of adoption of revised accounting standard and related implementation
guidance
The Company is currently evaluating the effects of adopting Accounting Standard
for Revenue Recognition, etc. on its consolidated financial statements.
Accounting Standard for Fair Value Measurement and Related Implementation
Guidance
Accounting Standard for Measurement of Inventories
Accounting Standard for Financial Instruments and Related Implementation
Guidance(a) Overview
Given the circumstances where the IASB and FASB have issued essentially thesame detailed guidance regarding fair value measurement (IFRS No. 13 “Fair
Value Measurement” under IASB and Topic 820 “Fair Value Measurement” of the
Accounting Standards Codification under FASB), the ASBJ, working to ensure
the Japanese standards would be consistent with international standards withregard in particular to the guidance and disclosure requirements of fair value offinancial instruments, announced the Accounting Standard for Fair Value
Measurement and other accounting standards.
14

The fundamental policy of the ASBJ in developing accounting standards for fairvalue measurement is to basically incorporate all core principles of IFRS No. 13,
from a standpoint of improving the comparability between financial statements
for domestic and international companies by using a unified calculation method,
and to set individual accounting treatments to the extent thatcomparability between the financial statements is not significantly lost, in
consideration of practices that have been conducted in Japan.
(b) Scheduled date of adoption
The Company expects to adopt the accounting standards from the beginning of
the fiscal year ending March 31, 2022.
(c) Impact of adaption of the aforementioned accounting standards
The Company is currently evaluating the effect of adopting the AccountingStandard for Fair Value Measurement and other accounting standards on its
consolidated financial statements.
3. Significant Accounting Estimates
The Company’s estimates are calculated by a reasonable method that is based on
information which is available at the time of preparation of financial statements.
The Company believes that the following represents its significant accounting
estimate which may significantly affect the financial statements for the year ending
March 31, 2022.
Recoverability of deferred tax assets(a) Amount on consolidated financial statements
Deferred tax assets (net) 293 million yen ($2,640 thousand)Deferred tax assets (gross*) 680 million yen ($6,126 thousand)(*) the amount before offsetting against deferred tax liabilities.
(b) Calculation method of the significant accounting estimate
The Company assesses the recoverability of deferred tax assets on a regular basis
and records valuation allowance for the portion considered to be uncertain. In
assessing the recoverability, estimated future taxable income and feasible tax
planning are taken into account and deferred tax assets are recognized to theextent that they are considered to have the effect of reducing future tax burdens.
The estimated future taxable income as of the fiscal year ended March 31, 2021 is
calculated based on Management Plan for the year ending March 31, 2022
approved by the Board of Directors, with an assumption that equivalent level oftaxable income will be generated for the periods thereafter.
(c) Significant assumptions
The significant assumptions used in the calculation of the estimated future taxable
income are sales by business segment and the corresponding cost ratios.
Sales by business segment are estimated on the basis of the order backlog as of theend of the fiscal year and interview with customers.
The cost ratio is estimated based on this year’s cost ratio together with considering
the price fluctuations of copper and other materials and trends in foreign exchange
rates.
15

Management Plan for fiscal year ending March 2022 has been prepared based on
the assumption that the impact of COVID-19 will continue throughout the entire
fiscal year at the same level as in the second half of fiscal year ended March 31,
2021.
Although entire market got drastically shrunken in the early stage of fiscal year
ended March 31, 2021, certain electronics market related to the Company got
expansion trend by providing required products and services with continuous
business development and necessary infectious prevention measures. While itseems to take time for COVID-19 to be contained and for the market to fully
recover because of continuous fluctuation of regulatory level regarding the reexpansion of infection, the Company expects to keep the same business activity
level in fiscal year ending March 31, 2022 as the one in the latter half of the fiscal
year ended March 31, 2021.
(d) Effect of uncertainty for the financial statements
Estimates of sales by business segment and the corresponding cost ratios as thesignificant assumptions involve a high degree of uncertainty due to the potential
difference between the actual order volume and the forecast, as well as higher
than expected increases in material prices, and if the estimated amount of
taxable income fluctuates, that has a significant impact on the judgement inassessing the recoverability of deferred tax assets. As a result, reversal ofdeferred tax assets may occur.
4. Supplementary Cash Flow Information
Cash and cash equivalents in the consolidated statements of cash flows arecomposed of cash on hand, bank deposits with a maturity of 3 months or less andwhich represent a minor risk of fluctuation in value.
As of March 31, 2021, and 2020, cash and cash equivalents consisted of thefollowing:Thousands of
U.S. dollars
2021

Millions of yen
2021
Cash on hand and in banks
Time deposits with maturities of over 3 months
Cash and cash equivalents¥¥

17,598(411)
17,1872020¥¥

16,669(552)
16,117$$

158,541(3,703)
154,838

5. Financial Instruments
Overview(a) Policy for financial instruments
The Companies obtain necessary funding in accordance with their capital
expenditure planning. The Companies obtain medium and long-term operating
funds and funds for the purchase of equipment from banks and utilize highly
liquid financial instruments for fund management purposes.
The Companies also utilize derivative financial instruments to hedge various risks
as described in detail below and do not enter into derivatives for trading or
speculative purposes.

16(b) Types of financial instruments and related risk
Operating receivables, such as trade notes and accounts receivable, are exposed tocredit risk of customers. Operating receivables in foreign currencies are exposed toforeign currency exchange risk. Forward foreign exchange contracts are
principally used to hedge this risk.
Investment securities, the issuers of which have business relationships with theCompanies, are exposed to stock market fluctuation risk.
Maturities of operating debts, such as trade notes and accounts payable, aremostly within six months. Though operating debts in foreign currencies are
exposed to foreign currency exchange risk, they are limited to the balances ofoperating receivables in the same foreign currency on an ongoing basis.
Loans and lease obligations related to finance leases are used mainly for operating
funds and for equipment purposes, respectively. Some consolidated subsidiaries
outside Japan provided lease obligations based on IFRS 16 (“Leases”). Maturities
of loans and lease obligations recorded as of the closing date of the fiscal year are
within 9 years. Almost all long-term loans are variable interest rate loans, and are
exposed to interest rate risk. Interest rate swaps are used for certain loans inorder to hedge this risk.
In order to hedge foreign currency exchange risk associated with operating debts
and receivables in foreign currencies and interest rate risk associated withinterest expense, derivative transactions such as forward foreign exchange
contracts, currency swap transactions and interest rate swap transactions areused.
Hedging instruments, hedged items, hedging policy and effectiveness of hedgetransactions are described in “Note 1. Significant Accounting Policies, (c)Financial instruments, (3) Hedge accounting.”(c) Risk management for financial instruments(1) Monitoring of credit risk (the risk that customers or counterparties may
default)
To screen and reduce unrecoverable risk of operating receivables, the Company
regularly monitors major customers’ credit status and manages the due dates
and balances for each customer in accordance with customer credit
management rules at the sales section in each operating division. Consolidated
subsidiaries also act based on the Company’s customer credit management
rules.
The Companies do not anticipate losses resulting from default of
counterparties to derivative transactions as these are limited to major financial
institutions with sound credit ratings.
(2) Monitoring of market risks (the risks arising from fluctuations in foreignexchange rates, interest rates and others)
The Company and certain consolidated subsidiaries principally use forward
foreign exchange contracts to hedge the foreign currency exchange risk ofoperating debts and receivables in foreign currencies, which are evaluatedmonthly for each currency. The Company uses interest rate swap transactions
to hedge interest rate risk associated with interest expense.
The Company regularly monitors the financial condition of stock issuers andstock market fluctuations and continuously reviews shareholdings considering
the market status and business relationship with the Company.

17

Derivative transactions entered into by the Company are implemented andcontrolled based on internal rules established by the board of directors. The
rules which stipulate transaction purpose, nature of transaction, name ofcounterparty, transaction item, loss limitation and reporting system of risk
amount. A derivative transaction which exceeds the limitation amount under
the rule requires the approval of the board meeting.
(3) Monitoring of liquidity risk (the risk that the Companies may not be able tomeet its obligations on scheduled due dates)
The Company timely formulates and updates the financing plan and controls
liquidity risk by managing ready liquidity on the basis of reports from eachdivision to the accounting department of the head office.
(d) Supplementary explanation of the fair value of financial instruments
Fair value of financial instruments is measured based on the quoted market price,
if available, or a reasonably assessed value if a quoted market price is notavailable. Fair value of financial instruments is calculated based on certain
valuation assumptions and the fair value might differ if different factors are used.
In addition, the contract amount of the derivative transactions described below in“Derivative Transactions” does not represent the market risk of the derivativetransactions.
Fair value of financial instruments
The book value on the consolidated balance sheets, fair value and difference as ofMarch 31, 2021 and 2020 were as follows. In addition, financial instruments, forwhich it is extremely difficult to measure the fair value, are not included (see “2.
Financial instruments for which the fair value is extremely difficult to measure”).

Cash on hand and in banks
Trade notes and accounts receivable
Investment securities
Other securities
Total assets
Trade notes and accounts payable
Short-term loans
Current portion of long-term debt
Income taxes payable
Long-term debt
Lease obligations
Total liabilities
Derivatives (*)

As of March 31, 2021
Millions of yen
Book value
Fair value

Difference

¥

¥

¥
¥

18

17,59819,084
1,565
38,247¥

11,923
5,879
3,903
455
9,804
2,932
34,896

¥

(119)

¥

¥
¥

17,59819,084
1,565
38,247

¥
¥

－
－
－
－

¥

11,923
5,879
3,906
455
9,924
3,043
35,130

¥

－
－
3
－
120
111
234

¥

(119)

¥

－

Cash on hand and in banks
Trade notes and accounts receivable
Investment securities
Other securities
Total assets
Trade notes and accounts payable
Short-term loans
Current portion of long-term debt
Income taxes payable
Long-term debt
Lease obligations
Total liabilities
Derivatives (*)

As of March 31, 2020
Millions of yen
Book value
Fair value

Difference

¥

¥

¥
¥

16,66920,853
1,319
38,841¥

11,943
4,924
309
394
13,586
3,479
34,635

¥

(138)

¥

¥
¥

16,66920,853
1,319
38,841

¥
¥

－
－
－
－

¥

11,943
4,924
320
394
13,727
3,039
34,347

¥

－
－
11
－
141
(440)
(288)

¥

(138)

¥

－

As of March 31, 2021
Thousands of U.S. dollars
Book value
Fair value
Difference
Cash on hand and in banks
Trade notes and accounts receivable
Investment securities
Other securities
Total assets
Trade notes and accounts payable
Short-term loans
Current portion of long-term debt
Income taxes payable
Long-term debt
Lease obligations
Total liabilities
Derivatives (*)$$$

158,541
171,928
14,099344,568$

107,41452,96435,162
4,099
88,324
26,414314,377$(1,072)$$$

158,541
171,928
14,099344,568

$

$
$

－
－

$

107,41452,96435,1894,099
89,40527,414316,485

$

－
－
27
－
1,081
1,000
2,108

$

(1,072)$－(*) The amount is the net balance of total transactions. Amounts reported asliabilities are shown in parentheses.
Notes:
1. Methods to determine the fair value of financial instruments and othermatters related to securities and derivative transactions
AssetsCash on hand and in banks and Trade notes and accounts receivable
The book value approximates fair value because of the short maturity ofthese instruments.

19

－
－

Investment securities
The fair value of investment securities equals quoted market price. The fairvalue of debt securities is measured at the price provided by financial
institutions. Investment securities based on holding purpose are describedin “Note 6. Securities”.
Liabilities
Trade notes and accounts payable, Short-term loans and Income taxes payable
The book value approximates fair value because of the short maturity ofthese instruments.
Current portion of long-term debt and Long-term debt
The fair value of current portion of long-term debt and long-term debt isbased on the present value of future cash flows discounted using the current
borrowing rate for similar debt contracts of comparable maturity.
Lease obligations
The fair value of lease obligations is based on the present value of future
cash flows discounted using the current interest rate for similar lease
contracts of comparable maturity and contract conditions.
Derivative transactions
See “Note 16. Derivative Financial Instruments”.
2. Financial instruments for which the fair value is extremely difficult tomeasure as of March 31, 2021 and 2020 were as follows:
Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
Available-for-sale securities withoutmarket quotations:
Unlisted securities

¥

2,573

¥

2,472

$

23,180Because no quoted market price is available and it is extremely difficult todetermine the fair value, the above financial instruments are not included in
the preceding table.
3. The aggregate maturities of monetary claims and held-to-maturity securities
as of March 31, 2021 and 2020 were as follows:

As of March 31, 2021
Millions of yen
Due after 1 year
Due within
1 yearthrough 5 years
Cash on hand and in banks
Trade notes and accounts receivable

¥
¥

20

17,59819,08436,682¥¥－－－

As of March 31, 2020
Millions of yen
Due after 1 year
Due within
1 yearthrough 5 years
Cash on hand and in banks
Trade notes and accounts receivable¥

16,66920,85337,522

¥

¥

－
－
－

¥

As of March 31, 2021
Thousands of U.S. dollars
Due after 1 year
Due within
1 yearthrough 5 years
Cash on hand and in banks
Trade notes and accounts receivable$$

158,541
171,928
330,469

$

－
－
－

$

4. The redemption schedules for long-term debt and lease obligations weredisclosed in “Note 8. Short-term Loans and Long-term Debt”.

6. Securities(a) As of March 31, 2021 and 2020, securities consisted of the following:Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
Available-for-sale securities for whichmarket quotations are available
Acquisition cost
Book value
Unrealized gain (loss)

¥
¥

1,439
1,564
125

¥
¥

1,512
1,317
(195)

$
$

12,964
14,0901,126(b) Sales of securities classified as other securities and the aggregate gain and loss forthe years ended March 31, 2021 and 2020 were as follows:
Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
Sales proceeds
Available-for-sale securities
Aggregate gain
Available-for-sale securities
Aggregate loss
Available-for-sale securities

¥

277

¥

0

$

2,495

¥

208

¥

0

$

1,874

¥

(0)

¥

(0)

$

(0)

21

7. Inventories
As of March 31, 2021 and 2020, inventories consisted of the following:Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
Merchandise
Finished goods
Work in process
Raw materials and supplies
Total

¥

4,582
1,122
1,984
6,545
14,233

¥

¥

¥

4,243
1,379
1,938
5,637
13,197$$

41,27910,10817,87458,964
128,225

8. Short-term Loans and Long-term Debt
Short-term loans as of March 31, 2021 and 2020 were principally bank overdrafts
and short-term notes bearing interest at annual average interest rates of 0.95% and1.64%, respectively.
As of March 31, 2021 and 2020, long-term debt consisted of the following:Thousands of
U.S. dollars
2021

Millions of yen
2021
Long-term loans, principally from banks (*)
Lease obligations¥

Less: current portion - Long-term loans
Less: current portion - Lease obligations
Total

¥

13,707
2,932
16,639(3,903)(708)
12,0282020¥¥

13,895
3,479
17,374(309)(973)
16,092$$

123,486
26,414
149,900(35,162)(6,378)108,360(*) As of March 31, 2021 and 2020, long-term loans and lease obligations consisted of
the following:Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
Long-term loans, at an annual average rateof 0.94
Lease obligations, at an annual average rateof 3.85
Current portion- Long-term loans, at an annual
average rate of 0.70
Current portion- Lease obligations, at an annual
average rate of 2.82

¥

¥

9,804

¥

13,586$88,324

2,224

2,506

20,036

3,903

309

35,162

708

973

6,378

16,639¥17,374$

149,900

The aggregate annual maturities of long-term debt and lease obligations as of March
31, 2021 were as follows:

22Millions of yen
Long-term
Lease
loans
obligations
Year ending March 31,
2023
2024
2025
2026
After above year

Thousands of U.S. dollars
Long-term
Lease
loans
obligations

¥

748
659
2,151
4,134
2,112

¥

595
464
310
249
606

$

6,739
5,937
19,37837,24319,027

$

5,360
4,180
2,793
2,243
5,460

¥

9,804

¥

2,224

$

88,324$

20,036

9. Retirement Benefit Plan(a) Outline of employee retirement benefits
The Company has defined benefit retirement plans covering substantially all
employees. Benefits under the plans are covered by two plans. One is governed by
the regulations of the Defined Benefit Corporate Pension Law and the other is aseverance indemnity by the Companies.
KOHA CO., LTD. (KOHA) also has defined benefit retirement plans covering
substantially all employees. Benefits under the plans are covered by two plans.
One is governed by the regulations of the Defined Benefit Corporate Pension Law
and the other is a severance indemnity by KOHA.
Certain foreign consolidated subsidiaries have defined benefit pension plans anddefined benefit lump-sum payment plans. The Company also has employee
retirement benefit trusts.
During the year ended March 31, 2011, the Company and some of its domestic
consolidated subsidiaries have changed a part of their retirement benefit plansfrom defined benefit plans to defined contribution plans.
Certain foreign consolidated subsidiaries have introduced their own defined
contribution plans.
(b) Contributory defined benefit retirement plan
(1) The changes in the defined benefit obligation and fair value of plan assets
except plans for which the simplified method is applied for calculating
retirement benefit obligations adopted by certain consolidated subsidiaries,
during the years ended March 31, 2021 and 2020 were as follows:23

Thousands of
U.S. dollars
2021

Millions of yen
2021

2020

Change in benefit obligations:Benefit obligation, the beginning of the year
Service cost
Interest cost
Actuarial loss (gain)
Benefit payments
Effects of changes in foreignexchange rates
Changes due to transfer
Increase due to change from the simplified
method to the principle method
Benefit obligation, the end of the year¥

12,621
457
41
433
(756)

¥

12,543
505
55
76
(770)

$

113,703
4,117
369
3,901
(6,811)

(48)

27

(432)

－

185

－

11

－

99

¥

12,759¥12,621$

114,946¥

12,147
242
2,241
445
(501)

¥

11,513
253
(83)
766
(533)

$

109,432
2,180
20,1894,009(4,514)

Change in fair value of plan assets:
Plan assets, the beginning of the year
Expected return on plan assets
Actuarial gain
Employer contributions
Benefit payments
Effects of changes in foreignexchange rates
Changes due to transfer
Plan assets, the end of the year

(51)
¥

－
14,523

48
¥

(458)

183
12,147$－130,838(2) Changes in the defined benefit obligation and fair value of plan assets
estimated by the simplified method for calculating retirement benefit
obligations for the years ended March 31, 2021 and 2020.
Thousands of
U.S. dollars
2021

Millions of yen
2021
2020

Change in net defined benefit liability
Benefit obligation,
the beginning of the year
Service cost
Benefit payments
Decrease due to change from thesimplified
method to the principle method
Benefit obligation, the end of the year

¥

¥

100

¥

112

$

901

16
(11)

13
(25)

144
(99)

(11)

－

(99)

94

¥

100

$

847

(3) Reconciliation of the projected benefit obligation and plan assets with net
defined benefit liability and asset reflected on the consolidated balance sheets
as of March 31, 2021 and 2020.

24

Millions of yen
2021
2020
Funded projected benefit obligation
Plan assets¥

12,322(14,523)(2,201)533¥¥(1,668)¥¥¥
Unfunded projected benefit obligation
Net of liability and asset reported on
the consolidated balance sheets
Net defined benefit liability
Net defined benefit asset
Net of liability and asset reported on
the consolidated balance sheets

Thousands of
U.S. dollars
2021

12,152(12,147)
5
569

$

¥

574

$

(15,027)2,454(4,122)¥2,920(2,346)$

22,108(37,135)(1,668)¥574$(15,027)¥

111,009(130,838)(19,829)4,802$(4) Components of pension expense for the years ended March 31, 2021 and 2020.
Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost
Extraordinary retirement benefit
Other
Net pension expense

¥

¥

474
41
(242)
276
(28)
180
40
741

¥

¥

517
55
(253)
362
(28)
－
23
676

$

$

4,270
369
(2,180)
2,486
(252)
1,622
361
6,676

(5) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before tax effect)in accumulated other comprehensive income and other comprehensive income
were as follows for the years ended March 31, 2021 and 2020.
Millions of yen
2021
2020
Prior service cost
Net actuarial difference
Total

¥
¥

28
(2,087)(2,059)

¥
¥

28
(197)
(169)

Millions of yen
2021
2020
Unrecognized prior service cost
Unrecognized actuarial difference
Total

¥
¥

25

(50)
(1,242)(1,292)

¥
¥

(79)
846
767

Thousands of
U.S. dollars
2021
$
$

252
(18,802)(18,550)

Thousands of
U.S. dollars
2021
$
$

(450)
(11,190)(11,640)

(6) Matters related to pension assets
i. Major components of pension assets
The fair values of plan assets, by major category, as a percentage of total
plan assets as of March 31, 2021 and 2020 were as follows.
2021

2020
15
46

Bonds
Equity securities
Life insurance company
general accounts
Cash and cash equivalents
Other

29
44

%

9

11

14
16
100

8
8
100

%

(*) Of total plan assets, 29% and 22% were included in a retirement benefit
trust (stocks, cash and bank deposits) established for the corporate pension
plan as of March 31, 2021 and 2020, respectively.
ii. Method for expected long-term rate of return on pension plan
The Companies determine the expected long-term rate of return on pension
plan assets based on the current and expected asset allocation, as well as thecurrent and expected long-term rate of return from various assets whichconstitute the plan assets.
(7) Assumptions used in actuarial calculations
The assumptions used in accounting for the above plans for the years ended
March 31, 2021 and 2020 were as follows.
Discount rates
Expected rates of long-term
return on plan assets
Expected rates of salary

2021

2020

0.0 ~ 4.4 %0.0 ~ 5.3 %1.8 ~ 3.0

1.8 ~ 2.8

3.4 ~ 5.0

2.0 ~ 5.0(c) Defined contribution plans
The required contributions by the Companies were ¥212 million ($1,909 thousand)and ¥191 million for the years ended March 31, 2021 and 2020, respectively.
10. Other Comprehensive Income
Reclassification adjustments and the related tax effects for components of othercomprehensive income for the years ended March 31, 2021 and 2020 were as follows:

26

%

%

Thousands of
U.S. dollars
2021

Millions of yen
2021
2020

Unrealized holding gain (loss) on securities
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectUnrealized holding gain (loss) on securities
Deferred gain (loss) from hedging instruments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effect
Deferred gain (loss) from hedging
instruments
Translation adjustments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effectTranslation adjustments
Retirement benefits liability adjustments
Amount arising during the period
Reclassification adjustments for gains andlosses included in net income
Before tax effectTax effect
Retirement benefits liability adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Amount arising during the period
Total amount of other comprehensive income

¥

¥

354

¥

(405)

$

3,189

(54)

18

(486)

300
(21)
279

(387)
40
(347)

2,703
(190)
2,513

(1)

0

(9)

－

－

－

(1)
0

0
(0)

(9)
－

(1)

0

(9)

(213)

(311)

(1,919)

－

－

－

(213)
－
(213)

(311)
－
(311)

(1,919)－(1,919)

1,831

(164)

16,495

228

333

2,054

2,059
(565)
1,494

169
(10)
159

18,549(5,089)13,460

16

(56)

144

1,575

¥

(555)

$

14,189

11. Treasury Stock
The Company had 646 thousand shares and 680 thousand shares of treasury stock
as of March 31, 2021 and 2020, respectively, in order to prepare for the exercise ofstock options granted to certain directors and executive officers, subject to theapproval of the General Meeting of Shareholders.
The amount of treasury stock is stated at cost and is presented as a separate
component of shareholders’ equity.
12. Selling, General and Administrative Expenses
For the years ended March 31, 2021 and 2020, the significant components of selling,
general and administrative expenses were as follows:27

Thousands of
U.S. dollars
2021

Millions of yen
2021
Salaries
Pension expense
Research and development expense
Freight
Provision for directors’ bonuses
Accrued bonuses

¥

2020

6,563
602
795
1,733
45
681

¥

6,480
641
939
2,051
42
595

$

59,126
5,423
7,162
15,613405
6,135

13. Research and Development Expenses
Total research and development expenses included in manufacturing costs andselling, general and administrative expenses amounted to ¥874 million ($7,874
thousand) and ¥1,035 million for the years ended March 31, 2021 and 2020,
respectively.
14. Income Taxes
As of March 31, 2021, and 2020, the significant components of deferred tax assets
and liabilities were as follows:
Millions of yen
2021
Deferred tax assets:
Tax loss carryforwards(*2)
Loss on valuation of inventories
Accrued enterprise taxes
Accrued bonuses
Net defined benefit liability
Loss on valuation of investment securities
Loss on impairment of fixed assets
Unrealized profit on inventories
Other
Subtotal
Valuation allowance(*1) :Tax loss carryforwards(*2)
Deductible temporary differences
Subtotal
Total deferred tax assets
Deferred tax liabilities:
Net defined benefit asset
Unrealized holding gain (loss) on securities
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥
¥

¥

1,610
118
34
289
1,045
119
53
216
620
4,104
(1,460)(1,964)(3,424)
680
641
72
782
1,495
(815)

2020
¥

¥
¥

¥

1,624
126
25
287
1,254
165
53
225
470
4,229
(1,443)(1,311)(2,754)
1,475
162
51
727
940
535

Thousands of
U.S. dollars
2021
$

$
$

$

14,505
1,063
306
2,604
9,414
1,072
477
1,946
5,586
36,973(13,153)(17,694)(30,847)
6,126
5,775
649
7,044
13,468(7,342)(*1) The significant increase in the valuation allowance for deductible temporary
differences is mainly due to an increase in valuation allowance for net defined
benefit liability.
28

(*2) The breakdown of tax loss carryforwards and deferred tax assets by
expiration is as follows.
As of March 31, 2021
Millions of yen
Tax losscarryforwards(1)

Within 1 year¥

Over 1 year
but within 3 years
Over 3 years
but within 5 years
Over 5 years
but within 10 years
Over 10 years¥

437

Valuation
allowance

Deferred tax
assets

¥

¥

(368)

69

87

(10)

77

85

(85)

－

341

(337)

4

660

(660)

－

1,610

¥

(1,460)¥150 (2)As of March 31, 2020
Millions of yen
Tax losscarryforwards(1)

Within 1 year¥

Over 1 year
but within 3 years
Over 3 years
but within 5 years
Over 5 years
but within 10 years
Over 10 years¥

35

Valuation
allowance¥(35)

Deferred tax
assets
¥

－

465

(454)

11

129

(19)

110

323

(275)

48

672

(660)

12

1,624

¥

29

(1,443)¥181

As of March 31, 2021
Thousands of U.S. dollars
Tax losscarryforwards(1)

Within 1 year$

Over 1 year
but within 3 years
Over 3 years
but within 5 years
Over 5 years
but within 10 years
Over 10 years
$

3,937

Valuation
allowance$(3,315)

Deferred tax
assets
$

622

784

(90)

694

766

(766)

－

3,072

(3,036)36

5,946(5,946)－

14,505$(13,153)$

1,352 (2)(1) The Companies calculate tax loss carryforwards using the statutory tax rate.
(2) The Companies assess the possibility of realizing deferred tax assets basedon estimated future taxable income for each taxpaying entity calculatedusing the Management Plan for the Fiscal Year Ending March 2022.
The reconciliation between the statutory tax rate and the effective tax rates for theyears ended March 31, 2021 and 2020 was as follows:
2021
Statutory tax rate
Effect of:
Non-deductible expenses for tax purpose
Non-taxable items
Inhabitant tax on per capita basis
Amortization of goodwill
Equity in earnings of affiliates
Tax rate difference applied forforeign subsidiaries
Change in valuation allowance
Foreign income taxes
Retained earnings of subsidiaries
Others
Effective tax rates

30

2020

30.6 %

30.6 %

1.3
(0.5)
1.2
0.2
(2.4)

5.4
(4.0)
1.1
0.8
(2.0)

6.5

(2.9)

36.0
2.7
2.1
(2.1)
75.6 %

19.3
8.4
2.3
(0.4)
58.6 %

15. Leases
Finance lease transactions (lessee)(a) Finance lease transactions with ownership transfer
Lease assets:
・Property, plant and equipment: Display units (machinery and equipment)
・Intangible fixed assets: Software
Lease assets are depreciated using the same method as fixed assets.
(b) Finance lease transactions without ownership transfer
Lease assets:
・Property, plant and equipment: Building and structures, machinery andequipment in connection with Electronic Components business, machineryand equipment in connection with IT, warehouse facilities and factories, sales
offices and company vehicles which apply IFRS16 at overseas subsidiaries
・Intangible fixed assets: Software
Lease assets are depreciated by the straight-line method over the respective
lease terms, assuming no residual value.
Operating lease transactions (lessee)
The future payments under non-cancelable operating leases as of March 31, 2021
and 2020 were as follows:
Thousands of
U.S. dollars
2021

Millions of yen
2021
Due within one year
Due after one year

¥
¥

2020
26
23
49

¥
¥

31

25
45
70

$
$

234
207
441

16. Derivative Financial Instruments
The Companies do not hold or issue derivatives for trading purposes and it is theCompanies’ policy to use derivatives only for the purpose of reducing exposure tomarket risks and financing costs in accordance with internal policies.
The Companies do not anticipate any losses resulting from default of thecounterparties as these are limited to major financial institutions with sound credit
ratings.
As of March 31, 2021, and 2020, for which hedge accounting has not been applied aresummarized as follows:(a) Foreign currency-related transactions
As of March 31, 2021
Millions of yen
Contract
amountDerivative transactions

Portion maturing

Fair value

over one year

Difference

Transactions outside the market:
Currency swaps:
Receive in Japanese
yen and pay in U.S.
dollars

¥

1,221

¥

1,089

¥

(23)

¥

(23)

As of March 31, 2020
Millions of yen
Contract
amountDerivative transactions

Portion maturing

Fair value

over one year

Difference

Transactions outside the market:
Forward foreignexchange contracts:
Buy
USD

¥

191

¥

－

¥

(0)

¥

(0)

Receive in Japanese
yen and pay in U.S.
dollars

¥

1,320

¥

1,320

¥

(47)

¥

(47)

Total

¥

1,511

¥

1,320

¥

(47)

¥

(47)

Currency swaps:

As of March 31, 2021
Thousands of U.S. dollars

Contract
amountDerivative transactions

Portionmaturing over
one year

Fair value

Difference

$

$

$

Transactions outside the market:
Currency swaps:
Receive in Japanese
yen and pay in U.S.
dollars$

11,0009,811(*) Price provided by financial institutions.
32

(207)

(207)

(b) Rate and Currency-related transactions
As of March 31, 2021
Millions of yen
Contract
amountDerivative transactions

Portion maturing

Fair value

over one year

Difference

Transactions outside the market:
Interest rate and currency
swaps:
Receive variable andpay fixed
Receive in U.S. dollars
and pay in Thai baht

¥

537

¥

537

¥

(94)

¥

(94)

As of March 31, 2020
Millions of yen
Contract
amountDerivative transactions

Portion maturing

Fair value

over one year

Difference

Transactions outside the market:
Interest rate and currency
swaps:
Receive variable andpay fixed
Receive in U.S. dollars
and pay in Thai baht

¥

568

¥

568

¥

(90)

¥

(90)

As of March 31, 2021
Thousands of U.S. dollars
Contract
amountDerivative transactions

Portion maturing
over one year

Fair value

Difference

Transactions outside the market:
Interest rate and currency
swaps:
Receive variable andpay fixed
Receive in U.S. dollars
and pay in Thai baht

$

4,838

$

4,838

$

(847)

$

(847)

(*) Price provided by financial institutions.
The notional amounts and the fair value of the derivative instruments outstanding
as of March 31, 2021 and 2020, for which hedge accounting has been applied aresummarized as follows:33

(a) Foreign currency-related transactions
As of March 31, 2021
Millions of yen
Derivative transactions

Main hedged
items

Contract
amountPortion maturing
over one year

Fair value

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Trade
accounts
receivable

¥

1,571

¥

－

¥

(*1)

20

－

(*1)

18

－

(1)

Deferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD

Trade
accounts
receivable
¥

Total

1,609

¥

－

¥

(1)

As of March 31, 2020
Millions of yen
Derivative transactions

Main hedged
items

Contract
amountPortion maturing
over one year

Fair value

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Trade
accounts
receivable

¥

843

¥

－

¥

(*1)

30

－

(*1)

Trade
accounts
payable

1,075

－

(*1)

Trade
accounts
receivable

0

－

0

Buy
USD

Deferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD
Total

¥

34

1,948

¥

－

¥

0

As of March 31, 2021
Thousands of U.S. dollars
Derivative transactions

Main hedged
items

Contract
amountPortion maturing
over one year

Fair value

Foreign exchange allocation method:
Forward foreignexchange contracts:
Sell
USD
EUR

Trade
accounts
receivable$

14,153

$

－

$

(*1)

180

－

(*1)

162

－

(9)

Deferral hedge accounting:
Forward foreignexchange contracts:
Sell
USD

Trade
accounts
receivable

Total

$

14,495

$

－

$

(9)

(*1) The fair value is included in the fair value of the accounts receivable-trade and theaccounts payable-trade since the forward foreign exchange contracts are accounted
for as part of accounts receivable and payable under the allocation method forhedge accounting.
(*2) Price provided by financial institutions.

(b) Interest rate-related transactions
As of March 31, 2021
Millions of yen
Derivative transactions
Interest-rate swaps:
Pay fixed and receive
variable

Main hedged
items

Contract
amountLong-term
debt

¥

5,320

Portion maturing
over one year

¥

3,820

Fair value¥(*)

As of March 31, 2020
Millions of yen
Derivative transactions
Interest-rate swaps:
Pay fixed and receive
variable

Main hedged
items

Contract
amountLong-term
debt

¥

35

5,320

Portion maturing
over one year

¥

5,320

Fair value¥(*)

As of March 31, 2021
Thousands of U.S. dollars
Derivative transactions
Interest-rate swaps:
Pay fixed and receive
variable

Main hedged
items

Contract
amountLong-term
debt$Portion maturing

Fair value

over one year

47,928$34,414$(*)(*) The fair value is included in the fair value of long-term debt since the short-cut
method is applied.

17. Financial Guarantees
The Company is contingently liable as a guarantor of borrowings for nonconsolidated subsidiaries (NOVEL CRYSTAL TECHNOLOGY, INC.) in the amountsof ¥12 million ($108 thousand) and ¥16 million for the years ended March 31, 2021
and 2020, respectively.
The Company is also contingently liable as a guarantor of borrowings for nonconsolidated subsidiaries (EARTH TAMURA ELECTORONIC (Myanmar) CO.,LTD.) in the amounts of ¥78 million ($703 thousand) and nil for the years ended
March 31, 2021 and 2020, respectively.
18. Business Combination, etc.
There was no significant business combination for the years ended March 31, 2021.
19. Loan Commitment
In order to achieve more efficient and flexible financing, the Company has concluded
loan commitment contracts with five financial institutions.
The status of these contracts as of March 31, 2021 and 2020 is summarized asfollows:
Millions of yen
2021
2020
Maximum overdraft amountand total amount of loan commitment
Executed loan amounts
Net amountThousands of
U.S. dollars
2021

¥

5,000

¥

2,500

$

45,045

¥

－
5,000

¥

－
2,500

$

－
45,04536

20. Stock Options(a) Stock options expenses recognized in selling, general and administrative
expenses for the years ended March 31, 2021 and 2020
Thousands of
U.S. dollars
2021

Millions of yen
2021
Selling, general and administrative expenses

¥

2020
14

¥

19

$

(b) Outline of stock options and changes
a. Outline of stock options
Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period
Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period
Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

The 2nd Stock Option Plan
June 29, 2005
Directors 6(Exclude outside director)
Executive officers 9
Common shares 35,000
July 1, 2005
Retirement of director andexecutive officer
N.A.

The 3rd Stock Option Plan
June 29, 2006
Directors 6(Exclude outside director)
Executive officers 6
Common shares 28,000
July 1, 2006
Retirement of director andexecutive officer
N.A.

The 4th Stock Option Plan
June 28, 2007
Directors 6(Exclude outside director)
Executive officers 7
Common shares 30,000
July 1, 2007
Retirement of director andexecutive officer
N.A.

For the period of five years fromthe next day of retirement of
director and executive officer

July 1, 2006 to

July 1, 2007 toJune 30, 2036

June 30, 2037

The 5th Stock Option Plan
June 27, 2008
Directors 6(Exclude outside director)
Executive officers 6
Common shares 42,000
July 1, 2008
Retirement of director andexecutive officer
N.A.
July 1, 2008 toJune 30, 2038

The 6th Stock Option Plan
June 26, 2009
Directors 6(Exclude outside director)
Executive officers 4
Common shares 77,000
July 1, 2009Retirement of director andexecutive officer
N.A.
July 1, 2009 toJune 30, 2039

The 7th Stock Option Plan
June 29, 2010
Directors 6(Exclude outside director)
Executive officers 6
Common shares 52,000
July 1, 2010Retirement of director andexecutive officer
N.A.
July 1, 2010 toJune 30, 2040

The 8th Stock Option Plan
June 29, 2011
Directors 6(Exclude outside director)
Executive officers 6
Common shares 65,000
July 1, 2011Retirement of director andexecutive officer
N.A.
July 1, 2011 toJune 30, 2041

The 9th Stock Option Plan
June 28, 2012
Directors 6(Exclude outside director)
Executive officers 6
Common shares 72,000
July 1, 2012Retirement of director andexecutive officer
N.A.
July 1, 2012 toJune 30, 2042

The 10th Stock Option Plan
June 27, 2013
Directors 6(Exclude outside director)
Executive officers 6
Common shares 78,000
July 1, 2013
Retirement of director andexecutive officer
N.A.
July 1, 2013 toJune 30, 2043

The 11th Stock Option Plan
June 26, 2014
Directors 6(Exclude outside director)
Executive officers 6
Common shares 52,000
July 1, 2014
Retirement of director andexecutive officer
N.A.
July 1, 2014 toJune 30, 2044

The 12th Stock Option Plan
June 26, 2015
Directors 7(Exclude outside director)
Executive officers 5
Common shares 36,000
July 1, 2015
Retirement of director andexecutive officer
N.A.
July 1, 2015 toJune 30, 2045

The 13th Stock Option Plan
June 28, 2016
Directors 6(Exclude outside director)
Executive officers 5
Common shares 50,000
July 1, 2016Retirement of director andexecutive officer
N.A.
July 1, 2016 toJune 30, 2046

37

126

Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period
Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

The 14th Stock Option Plan
June 28, 2017
Directors 6(Exclude outside director)
Executive officers 8
Common shares 37,000
July 1, 2017Retirement of director andexecutive officer
N.A.
July 1, 2017 toJune 30, 2047

The 15th Stock Option Plan
June 27, 2018
Directors 6(Exclude outside director)
Executive officers 7
Common shares 43,000
July 1, 2018
Retirement of director andexecutive officer
N.A.
July 1, 2018 toJune 30, 2048

The 16th Stock Option Plan
June 26, 2019
Directors 5(Exclude outside director)
Executive officers 10
Common shares 41,300
July 1, 2019
Retirement of director andexecutive officer
N.A.
July 1, 2019 toJune 30, 2049

The 17th Stock Option Plan
June 25, 2020
Directors 5(Exclude outside director)
Executive officers 9
Common shares 38,800
July 1, 2020
Retirement of director andexecutive officer
N.A.
July 1, 2020 toJune 30, 2050

The Company's stock option plans were designed as stock compensation to directors andexecutive officers after the directors’ retirement benefit plan was abolished in June 2005.

b. Stock options granted and changes
The movement in the number of stock options for the year ended Mach 31,
2021 is presented after conversion to the number of shares.
Number of stock options
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable

Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable(Shares)
The 2nd Stock Option Plan
June 29, 2005

The 3rd Stock Option Plan
June 29, 2006

The 4th Stock Option Plan
June 28, 2007

12,000
－
－
3,000
9,000

11,000
－
－
2,000
9,000

13,000－－3,000
10,000

－
3,000
－
－
3,000

－
2,000
－
－
2,000

－
3,000
－
－
3,000

The 5th Stock Option Plan
June 27, 2008

The 6th Stock Option Plan
June 26, 2009

The 7th Stock Option Plan
June 29, 2010

20,000－－4,000
16,00045,000－－8,000
37,00034,000－－5,000
29,000

－
4,000
－
－
4,000

－
8,000
－
－
8,000

－
5,000
－
－
5,000

38

Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable
Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable

Date of resolution
Before vested
Previous fiscal year-end
GrantedForfeited
VestedOutstanding
After vested
Previous fiscal year-end
VestedExercised
Forfeited
Exercisable

The 8th Stock Option Plan
June 29, 2011

The 9th Stock Option Plan
June 28, 2012

38,000－－6,000
32,00048,000－－7,000
41,00059,000－－8,000
51,000

－
6,000
－
－
6,000

3,000
7,000
3,000
－
7,000

4,000
8,000
4,000
－
8,000

The 11th Stock Option Plan
June 26, 2014

The 12th Stock Option Plan
June 26, 2015

Exercise price
Average stock price at exercise
Fair value at the grant date

The 13th Stock Option Plan
June 28, 2016

39,000－－5,000
34,00026,000－－－26,00038,000－－－38,000

8,000
5,000
8,000
－
5,000

3,000
－
3,000
－
－

6,000
－
6,000
－
－

The 14th Stock Option Plan
June 28, 2017

The 15th Stock Option Plan
June 27, 2018

The 16th Stock Option Plan
June 26, 2019

28,000－－－28,00031,100－－－31,10037,500－500
1,800
35,200

3,000
－
3,000
－
－
The 17th Stock Option Plan
June 25, 2020

3,600
－
3,600
－
－

2,000
1,800
3,800
－
－

－
38,8002,000
400
36,400
－
400
400
－
－

Price information
Date of resolution

The 10th Stock Option Plan
June 27, 2013

(Yen)
The 2nd Stock Option Plan
June 29, 2005

The 3rd Stock Option Plan
June 29, 2006

1
－
－

39

1
－
464

The 4th Stock Option Plan
June 28, 2007

1
－
653

Date of resolution

The 5th Stock Option Plan
June 27, 2008

1
－
426

Exercise price
Average stock price at exercise
Fair value at the grant date
Date of resolution

The 8th Stock Option Plan
June 29, 2011

The 14th Stock Option Plan
June 28, 2017

Date of resolution

The 12th Stock Option Plan
June 26, 2015

The 10th Stock Option Plan
June 27, 2013

1
374
163
The 13th Stock Option Plan
June 28, 2016

1
439
423
The 15th Stock Option Plan
June 27, 2018

1
439
439

Exercise price
Average stock price at exercise
Fair value at the grant date

1
－
203

1
374
151

1
364
321

Exercise price
Average stock price at exercise
Fair value at the grant date
Date of resolution

The 9th Stock Option Plan
June 28, 2012

The 11th Stock Option Plan
June 26, 2014

The 7th Stock Option Plan
June 29, 2010

1
－
348

1
－
203

Exercise price
Average stock price at exercise
Fair value at the grant date

Date of resolution

The 6th Stock Option Plan
June 26, 2009

1
439
229
The 16th Stock Option Plan
June 26, 2019

1
439
617

1
481
474

The 17th Stock Option Plan
June 25, 2020

Exercise price
Average stock price at exercise
Fair value at the grant date

1
532
363

(c) Valuation technique used to determine the fair value of stock options
The 17th stock options granted in the fiscal year ended March 31, 2021 werevalued using the following valuation technique.
Valuation technique: Black-Scholes option-pricing model
Principal assumptions used in the option-pricing model:
Date of resolution

The 17th Stock Option Plan
June 25, 2020

Expected volatility(*1)
Average expected life(*2)
Expected dividends(*3)
Risk-free interest rate(*4)

37.62%
10 years
10 yen per share
0.04%(*1) Calculated based on the actual stock prices from April 2010 to June 2020.
(*2) The average expected life could not be estimated rationally as data wasinsufficient. Therefore, it was estimated assuming that the options were
exercised at the 1/3 point of the exercise period.
(*3) Calculated based on actual dividends on common stock for the year ended
March 31, 2020, the dividend policy of the Company and prior years’ actual
dividends.
(*4) Japanese government bond yield corresponding to the average expectedlife.
(d) Method of estimating the number of stock options to be vested
Only the actual number of forfeited stock options is reflected because it isdifficult to rationally estimate the number of stock options that will be forfeitedin the future.

40

21. Segment Information(a) Overview of reportable segments
The reportable segments of the Companies are components for which separate
financial information is available and which are reviewed regularly by the boardof directors in deciding resource allocation and in assessing performance.
Each business division develops comprehensive business strategies for products
in Japan and overseas and conducts business activities.
Accordingly, the Company consists of three reportable segments, identified by
the products and based on the business divisions, which are classified as the“Electronic Components” business, the “Electronic Chemicals / FA Systems”
business and the “Information Equipment” business.
The “Electronic Components” business manufactures transformers, reactors, AC
adaptors, battery chargers, piezoelectric ceramic products and LED-related
products. The “Electronic Chemicals / FA Systems” business manufactures solder
paste, solder resist, flux and soldering system. The “Information Equipment”
business manufactures audio mixing console for broadcast used, wirelessmicrophone system, communication network equipment and OEM products.
(b) Calculation method for net sales, segment income or loss, and other items of thereportable segments
The accounting policies of the segments are substantially the same as thosedescribed in Note 1. Significant Accounting Policies.
Segment income is based on operating income.
Inter-segment sales are recorded at the same prices used in transactions withthird parties.
(c) Information on net sales, income or loss, assets and liabilities, and other items by
the reportable segment
Year ended March 31, 2021
Millions of yen

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment¥¥

Subtotal

Consoli－
dated
(*3)

Adjustments(*2)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

47,74922,716

¥

3,441

¥

73,906¥－¥73,906

2

27

34

63

(63)

－

47,751

22,743

3,475

73,969(63)

73,906

¥

165

¥

2,148

¥

279

¥

2,592

¥

(623)

¥

1,969

¥

2,150

¥

1,029

¥

91

¥

3,270

¥

221

¥

3,491

¥

15

¥

39

¥

－

¥

54

¥

－

¥

54

¥

3,570

¥

562

¥

48

¥

4,180

¥

0

¥

4,180

Other items
Depreciation andamortization
Amortization of
goodwill
Increase in tangible
and intangible
fixed assets

41

Year ended March 31, 2020
Millions of yen

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment

¥

¥

Other
(*1)

Subtotal

Total

Adjustments(*2)

79,655¥

Consoli－
dated
(*3)

Net Sales
SalesCustomers

50,872

Inter-segment
Segment
income (loss)

25,342

¥

3,440

¥

79,654

¥

1

¥

－

¥

79,655

0

98

59

157

640

797

(797)

－

50,87225,4403,499

79,811641

80,452(797)

79,655

¥

275

¥

2,553

¥

77

¥

2,905

¥

(12)

¥

2,893

¥

(604)

¥

2,289

¥

2,028

¥

1,091

¥

123

¥

3,242

¥

8

¥

3,250

¥

16

¥

3,266

¥

61

¥

39

¥

－

¥

100

¥

－

¥

100

¥

－

¥

100

¥

3,461

¥

980

¥

78

¥

4,519

¥

2

¥

4,521

¥

1

¥

4,522

Other items
Depreciation andamortization
Amortization of
goodwill
Increase in tangible
and intangible
fixed assets

Year ended March 31, 2021
Thousands of U.S. dollars

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
Equipment
FA Systems$$

Subtotal

Consoli－
dated
(*3)

Adjustments(*2)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

430,171

204,649$

31,000$665,820$－$

665,820

18

243

307

568

(568)

－

430,189

204,892

31,307666,388(568)

665,820

$

1,486

$

19,351

$

2,514

$

23,351$(5,612)$

17,739$19,369

$

9,270

$

820

$

29,459

$

1,991

$

31,450

$

135

$

351

$

－

$

486

$

－

$

486

$

32,163

$

5,063

$

432

$

37,658$－$37,658Other items
Depreciation andamortization
Amortization of
goodwill
Increase in tangible
and intangible
fixed assets(*1) TAMURA DISTRIBUTION CENTER INC., a consolidated subsidiary, wasmerged into the Company on April 1, 2020, and its transportation andwarehouse business has been outsourced. Due to the termination of theCompany’s transportation and warehouse business, there is no disclosure
for “Other Businesses” for the year ended March 31, 2021 in the table
above.

42

(*2) Adjustments for segment income (loss) were as follows:
Thousands of
U.S. dollars
2021

Millions of yen
2021
Inter-segment eliminations
Corporate costs (*)
Total

¥

2020

32
(655)
(623)

¥

¥

64
(668)
(604)

¥

$
$

288
(5,900)(5,612)(*) Corporate costs are mainly future R&D expenses at the head office, which are notallocated to the reportable segments.
(*3) Segment income is adjusted with operating income in the consolidated
statement of income.
(*4) Adjustments for “Depreciation and amortization” and “Increase in tangible andintangible fixed assets” are mainly capital investment and depreciation
relating to future R&D assets at the head office, which are not allocated to thereportable segments.
(*5) Assets of the Company are not allocated to the business segments.
(d) Related information(1) Information by product and service

SalesCustomers

SalesCustomers

SalesCustomers

Electronic
Components

Year ended March 31, 2021
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment

Consolidated

¥

¥

¥

47,74922,716¥

3,441Electronic
Components

Year ended March 31, 2020
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

¥

¥

50,872

25,342

¥

3,440

¥

Electronic
Components

Year ended March 31, 2021
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment$$

430,171

204,649

43$

31,00073,906

Consolidated
1¥

Consolidated$

665,820

79,655

(2) Information by geographical area
i. SalesJapan
Net Sales¥

31,534

China
¥

Japan
Net Sales¥

34,757$

284,090

19,021¥$¥

13,367¥18,084¥

15,464

¥

9,721

¥

China
171,360$

120,423

$

263

¥

¥

275

¥

$

2,370

79,655

Consoli－
dated

Other

87,57773,906

Consoli－
dated

Other

11,075

Year ended March 31, 2021
Thousands of U.S. dollars
Europe&Other Asia
America

Consoli－
dated

Other

Year ended March 31, 2020
Millions of yen
Europe&Other Asia
America

China

Japan
Net SalesYear ended March 31, 2021
Millions of yen
Europe&Other Asia
America$

665,820

ii. Property, plant and equipment
Year ended March 31, 2021
Millions of yen
Europe&China
Other Asia
AmericaJapan
Property, plantand equipment¥

16,100¥¥15,861¥$145,044

3,346

¥

970

¥

5,996

¥

3,813

¥

1,012

$

61,42344$

30,144$

8,739

27,234

Consoli－dated¥Year ended March 31, 2021
Thousands of U.S. dollars
Europe&America
China
Other Asia

Japan
Property, plantand equipment¥

Year ended March 31, 2020
Millions of yen
Europe&China
Other Asia
AmericaJapan
Property, plantand equipment

6,818

Consoli－
dated

26,682

Consoli－
dated$

245,350

(3) Information by major customer
This information has been omitted because there is no specific customer
representing 10% or more of net sales recorded in the consolidated
statements of income for the years ended March 31, 2021 and 2020.
(e) Information about impairment loss on fixed assets for each reportable segment
Fiscal year ended March 31, 2021: Not applicable
Fiscal year ended March 31, 2020: Not applicable(f) Information about amortization and balance of goodwill for each reportablesegment:

Amortization
Balance as ofMarch 31

Amortization
Balance as ofMarch 31

Amortization
Balance as ofMarch 31

Electronic
Components

Year ended March 31, 2021
Millions of yen
Electronic
Information
Chemicals /FA Systems
Equipment

Consolidated

¥

¥

¥

15

39

¥

－

287

－

287

－

Electronic
Components

Year ended March 31, 2020
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

¥

¥

61

39

15

¥

¥

－

318

$

$

－

$

2,586

¥

－
－

Consolidated
$

486
2,586

(g) Information about gains on negative goodwill for each reportable segment
Fiscal year ended March 31, 2021: Not applicable
Fiscal year ended March 31, 2020: Not applicable
22. Related Party Transactions
Fiscal year ended March 31, 2021: Not applicable
Fiscal year ended March 31, 2020: Not applicable
45

100
333

－

Electronic
Components

351

Consolidated－－

Year ended March 31, 2021
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment

135

54

23. Subsequent Events
There were no significant subsequent events for the years ended March 31, 2021
and 2020.

46