This document has been translated from the original document in Japanese. In the event ofany discrepancy between this English translation and the original document in Japanese, theoriginal document in Japanese shall prevail.
[Delivery Document]

Sanshin Electronics Co., Ltd.
Stock Code: 8150

Business Report on the 73rd Term
From April 1, 2023 to March 31, 2024

Contents
Corporate Message................................................................................ 1
Business Report .................................................................................... 2
Consolidated Financial Statements ..................................................... 25
Non-Consolidated Financial Statements ............................................. 29
Audit Report........................................................................................ 33

The Sanshin Spirit
Sanshin Electronics contributes to the development of today’s electronics-driven society
by embracing the challenge of the new and passing on the Sanshin Spirit to new
generations.
Electronics products play a formative role in today’s society. Electrical appliances connect with each other to provide
unprecedented services to consumers, while drivers enjoy greater safety thanks to the spread of operation support
systems such as collision avoidance. In the future as well, electronics will contribute to society by delivering greater
safety, comfort and convenience.
As a general electronics trading company, Sanshin Electronics has continued to pursue new possibilities in electronics
products in liaison with our customers, suppliers and business partners. We always bear in mind that we need to test thelimits, unconstrained by prevailing orthodoxies.
Since its establishment, the Company has always cherished Trust (Shin-yo in Japanese), Principles (Shinnen) and
Sincerity (Shinjitsu). Each of these components of our corporate code contains the Japanese character 信(Shin),testifying to the origin of the Company name. At Sanshin Electronics Co., Ltd. , these three precious values guide ourlong-term vision. With a spirit that thrives on tackling challenges, we are committed to opening the way to the electronics
of the future.

Trust

Principles

Sincerity

Business cannot succeed without
trust.
It begins and ends with trust.

Do not just pursue profit. But act basedon principles, which can be realized
through self-discipline.

Always act sincerely.
Rise to the challenge headon.

1

Business Report (From April 1, 2023 to March 31, 2024)
I. Matters Concerning the Current Status of the Corporate Group(1) Business Progress and Results
In the consolidated fiscal year under review, the world economy proceeded under a strong mood of wariness about apossible economic downturn. Factors included monetary tightening in Western countries, concerns about prospects for
the Chinese economy and intensifying geopolitical risk.
In the electronics industry, which is the Group’s domain of operations, an air of stagnation persisted as adjustments ofsemiconductor and electronic-component inventories continued in supply chains. The ICT industry in Japan enjoyedfavorable conditions, however, against a background of upgrading of existing systems and transferring them to the cloudto achieve greater productivity and operating efficiency, as well as the continuing advance of digital transformation(DX).
Against this background, the Group worked to increase profitability by reforming our business structure and to expand
our business in growth markets. Specifically, in the device business, we worked to expand our existing businesses andestablish a new profit structure. In the solution business, we strove to grow the business based on service provision,
expand our digital technology, and expand our customer platform.
As a result of these efforts, business performance in the consolidated fiscal year under review was as follows: Net sales
were ¥140,197 million (down 13.0% year-on-year), operating profit was ¥5,748 million (down 16.0% year-on-year),and ordinary profit was ¥3,908 million (down 29.1% year-on-year). Net profit attributable to shareholders of parent
company was ¥2,740 million (down 28.5% year-on-year) and ROE was 7.6% (down from 11.8% in the previous year).
In regard to internal transactions of revenues and expenses between consolidated companies, the parent company’stransactions are converted at the exchange rate at the time of the transaction or at the forward exchange rate, and theoverseas subsidiary’s transactions are converted at the average rate during the period and offset. During the consolidated
fiscal year under review, due to the weaker yen, operating profit increased because the offsetting expenses greatly
exceeded the corresponding revenues. However, the same amount has been adjusted as a foreign exchange loss in nonoperating expenses. Hence, there is no impact on the ordinary profit.

2

Device Segment
In the device business segment, our leading products are semiconductors (including system LSIs, microcomputers,
power semiconductors, LCD driver ICs and memory) and electronic components (including connectors, capacitors and
LCD panels). These products are sold mainly to electronics manufacturers. We also provide technical support such assoftware development and module development.
Earnings were impacted by a number of factors during the consolidated fiscal year under review. Net sales declined
against the previous fiscal year, while gross profit margin declined amid the loss of some high-margin projects. Moreover,interest and other non-operating expenses rose.
This resulted in net sales of ¥124,905 million (down 15.4% year-on-year) and segment profit was ¥2,102 million (down
49.3% year-on-year).
Note: Segment profit is based on ordinary profit.

Solution Segment
In the solution business segment, we provide one-stop services spanning from design and construction to operation andmaintenance of network devices and security products that utilize ICT in accordance with our customers’ environments.
In addition, we provide Line-of-Business systems such as sales and production management, and applications such as
personnel, payroll, and accounting in various formats ranging from on premise to the cloud.
During the consolidated fiscal year under review, We proceeded on a recovery footing, paced by growth incommunication networks for corporate customers. Business results were supported by lively growth in DX
implementation. Compared with the previous consolidated fiscal year, when tight supplies of semiconductors and other
inputs severely frustrated procurement of servers and other communication equipment, trends for these products werefavorable throughout the period.
This resulted in net sales of ¥15,291 million (up 13.0% year-on-year) and segment profit was ¥1,806 million (up 32.2%
year-on-year).
Note: Segment profit is based on ordinary profit.

3

(2) Capital Investment Activities
For the consolidated fiscal year under review, a total of ¥495 million in investments was conducted for purposes suchas upgrading of financial accounting systems and sales negotiation management systems.
(3) Financing Activities
For the consolidated fiscal year under review, outside financing was mainly ordinary borrowing from financial
institutions. Furthermore, the Company has entered into commitment line contracts totaling ¥6,000 million with threecorrespondent financial institutions with the aim of securing a flexible and stable funding framework. There is nobalance of borrowing based on these contracts at the end of the consolidated fiscal year under review.
(4) Future Challenges(Basic management policies)
The Group believes that mutual understanding among a wide range of stakeholders and growing together will lead tosustainable growth in corporate value. For this reason, the Group has formulated a long-term corporate vision andidentified key issues to tackle in order to achieve that vision. We are grappling with each of these issues with great
determination.
1) Long-term corporate vision
MissionWe contribute to fulfilling lives for people and the development of society by exploring new possibilities in technology.
VisionBe a corporate Group that constantly improves its people, technology and wisdom so customers will choose us as theirbest solution partner
Be a corporate Group that protects people’s safety and security and supports comfortable and affluent modern living
Be a corporate Group that is working toward a future with a sustainable global environment
Be a corporate Group that all employees can work with pride, a sense of purpose a real feeling of growth and happiness
ValuesBusiness creed (trust, principles, sincerity), Code of Conduct
2) Key issues for fulfilling the long-term corporate vision
I. Issues for improving sustainable business growth and capital efficiencyi) Shifting resources and upgrading organizations and systems to optimize business structure long-termii) Streamlining of clerical and administrative work in existing businesses and expanding sales and revenues throughsales-force automationiii) Entering growth businesses by applying solutions using digital technologyiv) Continuous improvement of capital efficiency
II. Issues related to sustainabilityi) Advancement of management of human capital4ii) Advancement of environmental management in supply chainsiii) Contribution to solutions to social issues through businessiv) Strengthening of supervisory functions through improved effectiveness of meeting structures(Target business indicators)
By establishing the return on equity (ROE) and ordinary profit as the Company’s important business indicators, we will
endeavor to improve earnings.
(Basic policies for profit distribution)
The Company considers profit returns to its shareholders as one of the most important management issues. The
Company’s basic policy is to determine dividends by comprehensively considering the need to maintain a balance
between rewarding of shareholders, investment to gain opportunities for growth, attainment of sufficient retained
earnings to enable sustainable growth, and improvement in capital efficiency. Under this policy, the Company has set atarget for its dividend payout ratio of around 50% on a consolidated basis.
(Medium-term business strategy and future challenges)
Although the Sanshin Electric Group expects cost of shareholders’ equity of only 8%, its operating profitability, stability
and growth rate are low compared to competitors. Accordingly the Group needs to upgrade its profit-earning andfinancial bases in order to raise return on equity (ROE) consistently above 8%. Expanding the equity spread (raising
ROE while paring cost of shareholders’ equity) is another issue vital for the purpose of boosting corporate value.
To grapple with these issues, the Group formulated the V76 Medium-Term Management Plan, whose final fiscal period
is FY2026 (the fiscal year ending March 31, 2027). To build an operating structure that can consistently achieve ROE
of 8% or better, the Group is targeting ordinary income of ¥5,000 million and net income of ¥3,500 million or more by
the final year of V76. To these ends, the Group is putting the following initiatives into practice.
1) Measures to achieve sustainable business growth and improve capital efficiency
I. Business strategies to improve profitability, stability and growth
Device businessi) Improving profitability by intensifying and raising efficiencyii) Improving stability by shifting resources into growth markets and boosting competitiveness through enhanced
technological capability and product uniquenessiii) Creating new strategic businesses necessary to bolster growth
Solution businessi) Increasing profitability in the application and platform businessesii) Improving stability by sustaining and expanding the network and imaging businessesiii) Improving growth by expanding the geographical range of the firefighting and disaster preparedness businesses
and creating new businesses using approaches such as DX and AI
II. Financial strategy
5i) Optimization of capital structure for both efficiency and safetyii) Improving capital efficiency to improve profitability and create cashiii) Appropriate resource allocation based on capital profitability
III．Policy on return of earnings to shareholders
Continuing distribution of dividends aiming for 50% payout ratio2) Efforts in sustainability
I. Advancement of human-capital managementi) Support for career formation by leveraging the individual talents of a diverse workforceii) Proactive investment in hiring and training personnel to acquire strategic capabilitiesiii) Improving labor productivity through advancement of DX and expanding creative activities
II. Advancing environmental management
Provision of disclosure in accordance with the TCFD Declaration and reduction of greenhouse-gas emissions
Note: TCFD stands for Task Force on Climate-related Financial Disclosures, a body established by the Financial
Stability Board, an international consultative body.
III ． Strengthening of supervisory functions through the Audit & Supervisory Committee and Nomination &Remuneration Committee6(5) Trends in Assets and Operating Results of the Company
70th Term(From April 1, 2020
to March 31, 2021)

71st Term(From April 1, 2021
to March 31, 2022)

Net Sales(million yen)

112,791

123,583

161,107

140,197

Operating Profit(million yen)

2,167

4,209

6,847

5,748

Ordinary Profit(million yen)

1,878

3,560

5,511

3,908

Net Profit Attributable
to Shareholders of
Parent Company(million yen)

1,646

2,524

3,832

2,740

171.12314.43224.66

Net Profit Per Share
(yen)

85.82

72nd Term(From April 1, 2022
to March 31, 2023)

73rd Term(From April 1, 2023
to March 31, 2024)

Total Assets(million yen)

84,60272,80978,60178,884

Net Assets(million yen)

43,21030,68334,25238,373

Net Assets Per Share(yen)

2,249.40

2,514.04

2,803.65

3,138.10

3.9

6.8

11.8

7.6

Return on Equity
(ROE)
(%)

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; March 31, 2020), etc., was applied fromthe beginning of the 71st term. The amounts for the 71st term and subsequent fiscal years are the amount after
application of said Accounting Standard, etc.

7

(6) Status of Parent Company and Principal Subsidiaries
1) Parent company
Not applicable.
2) Principal subsidiaries (as of March 31, 2024)
Company NameSANSHIN
ELECTRONICS(HONG KONG)
CO., LTD.
SANSHIN
ELECTRONICS
SINGAPORE(PTE) LTD.
TAIWANSANSHIN
ELECTRONICS
CO., LTD.
SANSHIN
ELECTRONICSCORPORATIONSANSHIN
ELECTRONICS
KOREA
CO., LTD.
SANSHIN
ELECTRONICS(THAILAND)
CO., LTD.
SANSHIN
ELECTRONICS(SHANGHAI)
CO., LTD.

Address

Main Business

CapitalVoting Rights
Ownership
Ratio

Hong Kong

Sales and import/export ofsemiconductors, electronic
components and equipment

12,820,000
US Dollar

100.00%Singapore

Sales and import/export ofsemiconductors, electronic
components and equipment

1,939,000
US Dollar

100.00%

Taipei, Taiwan

Sales and import/export ofsemiconductors, electronic
components and equipment

160,000,000
Taiwan New
Dollar100.00%Michigan, U.S.A.

Sales and import/export ofsemiconductors, electronic
components and equipment

3,000,000
US Dollar

100.00%Seoul, South
Korea

Sales and import/export ofsemiconductors, electronic
components and equipment

5,000,000,000
Korean Won

100.00%

Bangkok,Thailand

Sales and import/export ofsemiconductors, electronic
components and equipment

100,000,000
Thai Baht*100.00%

Shanghai, China

Sales and import/export ofsemiconductors, electronic
components and equipment

31,000,000
Chinese Yuan

*100.00%

45,000,000
Japanese Yen

74.38%

30,000,000
Japanese Yen

100.00%

TAKUMICORPORATIONTokyo, JapanSANSHIN
NETWORKSERVICE
CO., LTD.

Tokyo, Japan

1. Development and sales ofelectronic equipment
2. Development of computer
software
3. Acquisition, transfer, assistance inlicense acquisition, and managementof intellectual property rights
1. Design, construction, installation,
maintenance, operation, andmanagement of telecommunications
systems
2. Design and installation of circuits
and telephone equipment intelecommunications systems
3. Sales of equipment and devices
related to telecommunications
systems

Notes: 1. The percentages marked with an asterisk (*) include indirect holdings.
2. The Group has no specified wholly-owned subsidiary.
3. On April 1, 2024, the Company conducted an absorption merger of Sanshin Network Service Co., Ltd.

8

(7) Principal Businesses (as of March 31, 2024)
The Group is developing the device business and solution business. A description of each segment is provided in theoverview of results per business segment in “(1) Business Progress and Results.”(8) Principal Offices (as of March 31, 2024)
Domestic

SANSHIN ELECTRONICS CO., LTD.

Headquarters: 4-12, Shiba 4-chome, Minato-ku, Tokyo
Branches: Osaka Branch, Shizuoka Branch, Nagoya
Branch, Takamatsu Branch, Utsunomiya Branch, Nagano
Branch, Nagaoka Branch, Kochi Liaison Office
Other Business Place: Distribution Center

AXIS DEVICE TECHNOLOGY CO., LTD.

Headquarters: Tokyo

SANSHIN NETWORK SERVICE CO., LTD.

Headquarters: Tokyo

SANSHIN MEDIA SOLUTIONS CO., LTD.

Headquarters: Tokyo

SANSHIN SYSTEM DESIGN CO., LTD.

Headquarters: Tokyo

TAKUMI CORPORATION

Headquarters: Tokyo

Note: On April 1, 2024 the Company conducted an absorption merger of Sanshin Network Service Co., Ltd. and Sanshin
Media Solutions Co., Ltd.
Overseas
SANSHIN ELECTRONICS (HONG KONG) CO.,LTD.

Headquarters: Hong Kong

SANSHIN ELECTRONICS (SHANGHAI) CO., LTD.

Headquarters: Shanghai, China

SANSHIN ELECTRONICS (SHENZHEN) CO., LTD.

Headquarters: Shenzhen, China

SANSHIN ELECTRONICS KOREA CO., LTD.

Headquarters: Seoul, South Korea

SANSHIN ELECTRONICS SINGAPORE (PTE) LTD.

Headquarters: Singapore

SAN SHIN ELECTRONICS (MALAYSIA) SDN.
BHD.

Headquarters: Kuala Lumpur, Malaysia

SANSHIN ELECTRONICS (THAILAND) CO., LTD.

Headquarters: Bangkok, Thailand

TAIWAN SANSHIN ELECTRONICS CO., LTD.

Headquarters: Taipei, Taiwan

SANSHIN ELECTRONICS CORPORATION

Headquarters: Michigan, U.S.A.

9

(9) Employees (as of March 31, 2024)
Business Segment

Number of Employees

Change from the End of the Previous Term

Device business

322 (26)

Up 6 (up 3)

Solution business213 (11)Up 11 (up 1)

Corporate (common)

49 (19)No change (no change)

Total

584 (56)

Up 17 (up 4)

Notes: 1. The number of employees represents the number of those actually at work.
2. The number of employees in the “Corporate (common)” row includes personnel in administrative departments,
such as General Affairs Department, Accounting Department, distribution centers, etc.
3. The annual average number of temporary employees (part-time and entrusted workers) is enclosed in ( ).

(10) Principal Lenders (as of March 31, 204)
Outstanding
Loan Amount

Lender(Million yen)

Sumitomo Mitsui Banking Corporation

14,550MUFJ Bank, Ltd.

5,009

Sumitomo Mitsui Trust Bank, Limited.

1,900

Mizuho Bank, Ltd.

1,700

San ju San Bank, Ltd.

800

Note: The outstanding loan amount from banks listed above includes the outstanding loan amount from overseas subsidiaries
of each bank.

(11) Other Significant Matters Concerning the Current Status of Corporate GroupNot applicable.

10II. Shares of the Company (as of March 31, 2024)(1) Number of Shares Authorized to Be Issued: 76,171,000 shares(2) Number of Shares Issued: 16,281,373 shares(3) Number of Shareholders: 7,786(4) Major Shareholders (Top ten shareholders)Name of Shareholder
Matsunaga Eiichi, Ltd.
NEC Corporation
The Master Trust Bank of Japan, Ltd. (Trust Account)
Sumitomo Mitsui Banking Corporation
Custody Bank of Japan, Ltd. (Trust Account)MUFG Bank, Ltd.
MUFG Bank, Ltd.
Meiji Yasuda Life Insurance Company
Sumitomo Life Insurance Company
Sumitomo Mitsui Trust Bank, Limited
San ju San Bank, Ltd.

Number of
Shares Held(Thousands of shares)
1,600
1,049
1,009
614
396
341
266
265
251
250

Shareholding Ratio
(%)
12.95
8.49
8.17
4.98
3.21
2.77
2.16
2.14
2.03
2.03

Notes: 1. The number of shares held by Custody Bank of Japan, Ltd. (trust account) includes 151,000 shares of the Company
which are trust property of the trust in relation to the performance-based stock compensation plan for Directors(excluding External Directors).
2. The Company has 3,926,786 shares of treasury stock, but is excluded from the major shareholders above.
3. Shareholding ratio is calculated with treasury stock excluded.

(5) Shares Issued As Compensation for Execution of Duties in the Consolidated Fiscal Year Under Review
No. of Shares
Directors (excluding External Directors)

11,200III. Stock Acquisition Rights, etc.
Not applicable.

11

No. of Persons
Issued Shares
1IV. Directors and Audit & Supervisory Board Members(1) Status of Directors and Audit & Supervisory Board Members (as of March 31, 2024)
Position

Name

Responsibility Within the Company

Representative
Director, CEO
Representative
Director, COO
Director, Senior
Operating Officer
Director, Senior
Operating Officer
Director, Senior
Operating Officer
Director, Operating
Officer
Director, Operating
Officer
Director, Operating
Officer

Mitsumasa
Matsunaga
Toshiro Suzuki

In charge of Auditing Office

Fumihide Kitamura

Supervisor of Device BusinessYuji Mori

Senior General Manager of Solution
Marketing & Sales Division
Senior General Manager of
Administration Division
Deputy Senior General Manager of
Solution Marketing & Sales Division
Senior General Manager of Finance &Accounting Division
Manager of Electronic Component
Sales Promotion Unit, Director ofInternational Operations Unit

DirectorTakeshi Uchimura

Director

Minoru Nishino

Director

Akihiro Fujioka

Director

Minako Adachi

Koji Sakamoto
Hiroshi Harada
Jun-ichi Murakami
Hitoshi Iwakami

Important Concurrent Roles, etc.

Audit & Supervisory Board
member of Hochiki Corporation,
External Director of Sinko
Industries Ltd.

Audit & Supervisory Akio Misono
Board member (Fulltime)
Audit & Supervisory Shin-ichi Miura
Board member (Fulltime)
Audit & Supervisory Shohei Yamamoto
Board member

Lawyer of Marunouchi-Chuo
Law Office, External Director ofNarasaki Sangyo Co., Ltd.,
Audit & Supervisory Board
member of MegaHouse
Corporation, External Audit &Supervisory Board member ofBandai Co., Ltd., External Audit& Supervisory Board member ofToin Corporation, Vice Presidentof Tokyo bar association
Certified public accountant andtax accountant of Kezuka
Accounting Office

Audit & Supervisory Kuniharu Kezuka
Board member

Notes: 1. Takeshi Uchimura, Minoru Nishino, Akihiro Fujioka and Minako Adachi serve as External Directors, while Shohei
Yamamoto and Kuniharu Kezuka serve as External Audit & Supervisory Board members. Also, the Company has
designated all six of them as Independent Directors/Auditors as per the provisions of the Tokyo Stock Exchange,and has given notice to this effect to the Stock Exchange.
2. Kuniharu Kezuka is qualified as a certified public accountant and certified tax accountant, and has a considerable

12degree of knowledge about financial and accounting matters.
3. The Company has no special relationships with the entities listed above in which the External Directors and External
Audit & Supervisory Board members hold important concurrent positions.
4. There were no changes in positions or responsibilities of directors in the fiscal period under review.
5. The following table shows information on officers who retired during this consolidated fiscal year.
Title, duties and important
Name

Date of retirement

Retirement reason

concurrent roles, etc., at thetime of retirement

Mitsuhiro Ogawa

June 22, 2023

End of term

Tatsuo Takeuchi

June 22, 2023

End of term

13

Director, Senior Operating
Officer
Director

(2) Overview of Limited Liability Contract
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company entered into an agreement respectively withTakeshi Uchimura, Minoru Nishino, Akihiro Fujioka, Minako Adachi, Akio Misono, Shin-ichi Miura, Shohei Yamamoto
and Kuniharu Kezuka, which limits their liability for damages prescribed in Article 423, Paragraph 1 of the same Act.
The limit on their liability for damages under the agreement coincides with the legally stipulated amounts.
(3) Overview of Liability Insurance Contract for Officers, etc.
Pursuant to Article 430, Paragraph 3, Item 1 of the Companies Act, the Company has entered into a liability insurance
contract for Directors, Audit & Supervisory Board members, Operating Officers, employees in management positions,and persons dispatched to another company as officers. The Company pays the full amount of the insurance premiums.
The overview of the insurance contract is that the insurance company will pay compensation for damages that may
occur when an insured individual is held responsible for the execution of his/her duties or is subject to a charge ofliability for pursuing those responsibilities. The contract will be renewed every year.
Damages caused when an insured individual violates laws or regulations are exempt from the insurance contract.
Furthermore, we are taking measures to ensure that insured persons can execute their duties properly; for example,
setting a limit on the amount to be covered.
We plan to renew the insurance contract with the same contents at the next renewal period.
(4) Compensation to Be Paid to Directors and Audit & Supervisory Board Members
1) Total compensation for this fiscal year
Total amount of compensation, etc., by type
Post

Total amount ofcompensation,
etc.

Basic
compensation

Performancebased allowancefor bonuses to
employees

Performancebased allowance
for stockcompensation

Number ofapplicableofficers

Directors¥213 million¥129 million¥56 million¥28 million

14(External Directors)(¥26 million)(¥26 million)

(―)

(―)

(5)

Audit
&
Supervisory Board
members¥46 million¥46 million

―

―

4

(External Audit &Supervisory Board
members)(¥12 million)(¥12 million)

(―)

(―)

(2)

Total

¥260 million¥175 million¥56 million¥28 million

18

Notes: 1. The number listed above includes 2 Directors including 1 External director who retired upon conclusion of the 72nd
Ordinary General Meeting of Shareholders held on June 22, 2023.
2. The amount of compensation for Directors does not include the salaries of Directors who concurrently serve as
employees.
3. The upper limit on the total amount of compensation to be paid to Directors was set at ¥420 million per year
(excluding the employee salaries) at the 56th Ordinary General Meeting of Shareholders held on June 22, 2007.

14

The number of Directors at the conclusion of this General Meeting of Shareholders was 12 (including 0 External
Directors).
4. In regards to stock compensation that is established in addition to monetary compensation, for Directors excluding
External Directors, we established a share settlement trust with a total limit of 50,000 points (1 point = 1 share of
the Company’s ordinary shares) per year based on the resolution at the 66th Ordinary General Meeting of
Shareholders held on June 23, 2017. The period of the trust is 5 years from August 2017 to August 2022, and the
maximum contribution amount is ¥200 million (equivalent to ¥40 million per year). If the trust period is extended,this General Meeting of Shareholders also made a decision on contribution to the trust up to a maximum amountcalculated by multiplying the number of years of the extension by ¥40 million, and on continuing the maximum
number of points granted per year. (At the Board of Directors meeting held on June 15, 2022, the Company resolved
to extend the trust period until August 31, 2027 and to continue the system.) The number of Directors at theconclusion of this General Meeting of Shareholders was 9 (excluding 3 External Directors who are not eligible forstock compensation).
5. The upper limit on the total amount of compensation to be paid to Audit & Supervisory Board members was set at¥50 million per year at the 42nd Ordinary General Meeting of Shareholders held on December 21, 1993. The
number of Audit & Supervisory Board members at the conclusion of this General Meeting of Shareholders was 2.
The Company abolished the bonus system for Audit & Supervisory Board members in the 54th term.
6. The Company establishes ordinary profit as the indicator for performance-based bonuses and ROE as the indicatorfor performance-based stock compensation. Changes for results of these indicators are shown in “I. Matters
Concerning the Current Status of the Corporate Group” – “(5) Trends in Assets and Operating Results of theCompany.”

2) Retirement benefits paid to retired Directors and Audit & Supervisory Board members for this fiscal year
At the 55th Ordinary General Meeting of Shareholders, which was held on June 23, 2006, approval was given for
discontinuing payments in line with abolishing the retirement benefit system for Directors and Audit & Supervisory
Board members. Following the resolution, there has been no retirement benefit paid for this fiscal year.
(5) Policies, etc., Related to the Determination of Contents for Compensation, etc., of Officers
At the Board of Directors meeting held on June 24, 2016, the Company resolved policies for determining the content ofcompensation, etc., for individual Directors. When making a resolution to the Board of Directors, we consult in advancewith the Nominations & Remuneration Committee, for which half of members are Independent Directors/Auditors, andreceive reports on the contents of said consultation. Furthermore, the system in the Director Compensation Rules isdesigned so that the contents of individual compensation, etc., for Directors are calculated based on those policies, so
the Board of Directors judges that the contents of compensation, etc., for individual Directors in the consolidated fiscal
year under review are in accordance with those policies. The Board of Directors shall consult with the Nominations &Remuneration Committee every year regarding the validity of the Director Compensation Rules, and shall deliberateand decide on necessary measures based on reports from the Committee.
The contents of policies for determining the contents of compensation for individual Directors are as follows.
151) Basic policy Compensation for Directors shall be appropriate, and shall be sufficient for attracting and retaining diverse, talented
personnel.
 Compensation for Directors shall enable Directors to continuously improve corporate value and share interests with
the Company’s shareholders.
 Measures shall be taken to ensure that the process of determining compensation for Directors is fair and transparent.
 Compensation for Directors shall consist of basic compensation, which is fixed compensation as payment for roleand execution of duties, and performance-based compensation, which is linked to business performance. However,
performance-based compensation is not appropriate for non-executive Directors, including External Directors whoare independent of business execution; therefore, only basic compensation is used for non-executive Directors.
2) Policy regarding basic compensation
Basic compensation for Directors of the Company shall be a fixed monthly compensation. The amount of compensation
shall be set within the range for each position stipulated in the Director Compensation Rules, taking into consideration
the appropriate level.
3) Policy regarding performance-based compensation, etc., and non-monetary compensation, etc.
 The Company establishes the return on equity (ROE) and ordinary profit as the Company’s important businessindicators, and strives to improve these indicators. Therefore, the Company also uses these indicators for
performance-based compensation, etc., and non-monetary compensation, etc., for executive Directors.
 Business indicators related to bonuses as short-term incentives shall be the consolidated ordinary profit and businessprofit (loss) by business segment for the applicable fiscal year. The amount of individual bonuses is calculated bymultiplying the basic compensation amount of each Director by the factor stipulated in the Director Compensation
Rules according to the results of each business index and the individual contribution evaluation. After being
determined, the amount is paid after the Ordinary General Meeting of Shareholders for that fiscal year.
 The business indicator for stock-based compensation as a medium- to long-term incentive shall be the return on
equity (ROE) for the fiscal year in which the compensation is issued. The number of shares to be individually issued
is assigned after converting the basic compensation amount for each Director and the ROE performance in eachfiscal year into points by using the methods specified in the Share Issuance Regulations, and the number of sharesof the Company are issued at the time of leaving the position based on the cumulative number of points earned
during time spent serving in that position.
 For these two indicators, a lower limit (no payment) and an upper limit are set. Director compensation is paid
according to performance, within the upper and lower limits.
4) Policy for ratio of compensation, etc.
The ratio of performance-based compensation, etc., and non-monetary compensation, etc., is designed to be about 30%of the total compensation for Directors at the upper limit of the current system.
165) Items related to determination of compensation, etc.
Pursuant to the Director Compensation Rules, the Board of Directors delegates the determination of the basic
compensation amount, etc., for each Director to the Representative Directors.
(6) Items Related to Delegating the Determination of Compensation, etc., for Officers
Pursuant to the Director Compensation Rules, the Board of Directors delegates the determination of the individual basic
compensation amount for each director to Representative Director & CEO Mitsumasa Matsunaga and Representative
Director & COO Toshiro Suzuki (who is in charge of auditing office). When deciding the contents of delegation, theNomination & Remuneration Committee confirms that the contents comply with the Director Compensation Rules.
(7) Matters Concerning External Directors and Audit & Supervisory Board Members
1) State of significant posts held concurrently at other corporations, and relations between the Company andsuch other corporations
Please see the above “(1) Status of Directors and Audit & Supervisory Board Members” section.
2) Major activities in the fiscal year under review• Status of attendance at meetings of the Board of Directors and the Audit & Supervisory Board
Board of Directors Meetings(a total of 13 meetings)
Number of
Meetings Attended

DirectorTakeshi Uchimura

Director
Minoru Nishino

Director
Akihiro Fujioka

Director
Minako Adachi
Audit & Supervisory
Board member
Shohei Yamamoto
Audit & Supervisory
Board member
Kuniharu Kezuka

Audit & Supervisory Board Meetings(a total of 16 meetings)

Attendance Rate

Number of Meetings
Attended

Attendance Rate

13

100%

―

―

13

100%

―

―

13

100%

―

―

9

90%

―

―

13

100%

16

100%

13

100%

16

100%

Notes:
1. Minako Adachi was newly appointed Director at the 72nd Ordinary General Meeting of Shareholders held on June22, 2023. There have now been 10 meetings of the Board of Directors since her appointment.
2. Based on the number of meetings of the Board of Directors in the table above, and on Article 370 of the Companies
Act and the Company’s Articles of Incorporation, there have been two recorded resolutions recognized to be17

resolutions of the Board of Directors.
 Statements made by Directors at the Board of Directors and summary of duties performed in relation to their
expected roles
Takeshi Uchimura, Minoru Nishino, Akihiro Fujioka and Minako Adachi provided a wide range of valuablecomments and advice in terms of corporate governance, risk analysis and evaluation in the course of business
operation, compensation system for the Directors, election of any Directors, and overall management based on theirabundant experience and achievements in corporate management at another listing companies.
Furthermore, as members of the Nominations & Remuneration Committee, the four Directors fulfill an importantrole in strengthening the independence, objectivity, and accountability of functions of the Board of Directors as
expected by the Company; for example, they are involved in reporting to the Board of Directors in regards to thenomination of candidates for Directors and Audit & Supervisory Board members and in regards to the determinationof Director compensation.
 Statements made by Audit & Supervisory Board members at the Board of Directors and at Audit & Supervisory
Board meetings
Shohei Yamamoto and Kuniharu Kezuka provided comments effective and necessary for securing legal complianceof the Company’s management from the viewpoints of their positions as a lawyer and as a certified public accountant
and certified tax accountant, respectively.

18

V. Status of Accounting Auditor(1) Name of Accounting Auditor
Deloitte Touche Tohmatsu LLC.
(2) Amount of Compensation
Amount to Be Paid
Compensation to be paid to Accounting Auditors for the fiscal year under review¥48 million

Total of cash and other assets to be paid by the Company and subsidiaries to
Accounting Auditors¥56 million

Notes: 1. Among principal subsidiaries of the Company, overseas subsidiaries were subject to audits by a person other thanthe Accounting Auditor who audits the Company (overseas certified public accountant or person equivalent to thequalification of auditing firm) (limited to an audit subject to a foreign law equivalent to the Companies Act or the
Financial Instruments and Exchange Act of Japan).
2. The auditing contract between the Company and the Accounting Auditors makes no distinction between auditing
services based on the Corporate Law and auditing services based on the Financial Instruments and Exchange Law.
Since no real distinction can be made in practice, the amount paid represents the total amount.
3. As prescribed in “Practical Guidelines Concerning Cooperation with Accounting Auditors” released by the Japan
Audit & Supervisory Board Members Association, the Audit & Supervisory Board has evaluated the status ofexecution of duties by Accounting Auditors and their audit plan, and after considering the Company’s businessresults in the previous fiscal year, has agreed with the provisions of Article 399, Paragraph 1 of the Companies
Act on matters such as the compensation to be paid to Accounting Auditors.

(3) Non-Audit Work
The Company entrusts the Accounting Auditor with “proposal of responses to revised standards on internal controls,”
which is a service other than services as provided in Article 2, Paragraph 1 of the Certified Public Accountants Law(non-audit work), and paid compensation for such services to the Accounting Auditor.
(4) Policy Concerning Decisions to Dismiss or Not to Reappoint Accounting Auditors
When there is any difficulty in execution of duties by the Accounting Auditor and their fulfillment is deemed necessary,
the Audit & Supervisory Board shall determine the content of the proposal regarding whether to dismiss or not reappoint
the Accounting Auditor to be submitted to the General Meeting of Shareholders. Furthermore, if the Accounting Auditor
is deemed to fall under any of the items prescribed in Article 340, Paragraph 1 of the Companies Act, the Audit &Supervisory Board shall dismiss the Accounting Auditor based on consent of all Audit & Supervisory Board members.
In this case, the Audit & Supervisory Board member designated by the Audit & Supervisory Board shall report on thedismissal of the Accounting Auditor and the reason thereof at the first General Meeting of Shareholders following thedismissal.

19

VI. System for Securing Appropriateness of Business Operations and the Status of Its Operation(1) System for Securing Appropriateness of Business Operations
At the Meeting of the Board of Directors, the Company resolved the following system for securing compliance of
directors’ execution of duties in line with laws and regulations as well as with the Articles of Incorporation, but also for
securing the appropriateness of the business operations of the Company.
1) System for Securing Compliance of Execution of Duties by Directors and Employees with Laws andRegulations and Articles of Incorporation
 The Company shall set the code of conduct in line with the company creed and philosophy where its directors andemployees are required to comply with, and ensure that each and every director and employee is thoroughly informedof this code.
 The Company shall set compliance rules and establish a framework for compliance, including an internal reporting(whistle-blower) system.
 When detecting serious legal violation or other important matters concerning compliance, Directors shallimmediately notify Audit & Supervisory Board members and report it at a meeting of the Board of Directors or a
corporate management meeting without any delay.
 The Company shall set up an internal audit department that is independent from operational divisions and responsible
for auditing the operational processes thereof in order to prevent and detect illegal acts and improve the processes.
 Audit & Supervisory Board members shall be allowed not only to attend meetings of the Board of Directors on apermanent basis but also to participate in other important meetings and committee meetings as necessary. In addition,
Audit & Supervisory Board members shall regularly hold meetings to seek the opinions of Accounting Auditors.
 The Company shall stipulate explicitly the obligation to break off relations with antisocial forces in the code of
conduct. Furthermore, it shall establish a department to handle such antisocial forces and take all necessary measures
such as formulating a communication framework to contact the police and lawyers in the case of emergency,
collecting and managing information, preparing regulations and manuals, and so on.
2) System for Storage and Management of Information Concerning Directors’ Execution of Duties
 Directors shall store and manage documents and other information materials concerning their execution of duties
appropriately in accordance with the rules set by the Company.
 Directors, Audit & Supervisory Board members and employees at the internal audit department may access suchinformation at any times.
3) Rules Concerning Risk Management
 The Company has established risk management regulations, and clearly states the risks that it faces.
 Under the directions of its General Risk Committee, which is headed by the company president, the Company
manages risk for the entire Group.
 As well as clarifying the supervisory department for each risk, the General Risk Committee sets up individualcommittees as required, and prepares systems for enabling swift and effective responses to be made when risks arise.
Also, the Company formulates a Business Continuity Plan (BCP) that assumes the occurrence of a large-scale20

earthquake related disaster.
 The General Risk Committee makes reports to the Board of Directors, as necessary, on the state of responses being
made for risks that have arisen.
 Regarding potential risks requiring response, after assessing these, the General Risk Committee reviews theeffectives of the risk policies and associated management systems, and then reports on their findings to the Board of
Directors.
4) System for Securing Efficiency of Execution of Duties by the Group’s Directors
 The Company shall hold a regular meeting of the Board of Directors every month and hold an extraordinary meetingof the Board of Directors as necessary.
 In addition, the Company shall regularly hold a corporate management meeting with the participation of Executive
Directors, Full-time Audit & Supervisory Board members and others, for which sufficient deliberations shall be
conducted in advance on particularly important matters to be determined by the Board of Directors.
 With regard to the execution of operations based on decisions made at a meeting of the Board of Directors, thedivisions and officials in charge thereof as well as the execution procedures shall be determined based on the rules
concerning the allocation of operational responsibilities and authorities. Furthermore, by similarly maintaining
necessary regulations and providing execution proceedings for each subsidiary, the Company aims to streamline
execution of duties by each subsidiary's corresponding director.
5) System for Securing Appropriateness of Operations of the Group All companies belonging to the Sanshin Electronics Group shall be required to comply with the Group creed andphilosophy, the code of conduct and the compliance rules, and the Company shall ensure that directors and all
employees of its subsidiaries are thoroughly informed. Each subsidiary shall maintain necessary regulations for itself
based on the above rules.
 The Sanshin Electronics Group as a whole, including subsidiaries, shall implement measures to cope with the serious
risks. Each subsidiary shall maintain necessary regulations for itself based on the above rules.
 Subsidiaries are required to obtain prior approval from and submit reports to the Company with regard to importantmatters as specified in the rules concerning the supervision of subsidiaries and affiliated companies.
 The Company shall regularly provide directors and employees of subsidiaries with opportunities to have theCompany’s Directors and Audit & Supervisory Board members reporting on the execution of their respective duties.
 Audit & Supervisory Board members shall conduct necessary audits with regard to subsidiaries, too.
6) Systems for Ensuring the Reliability of Financial Reporting To ensure the reliability of the Group’s financial reporting and the effective and appropriate submission of theinternal control reports, the Company shall set the Internal Control Management Regulations and introduce theframework to evaluate the effectiveness of the internal control system on a regular basis and to correct inadequacies,
if any.

217) System for Accommodating Audit & Supervisory Board Members’ Requests for Assistant Employees andIndependence of Said Employees from Directors
 Audit & Supervisory Board members shall be given the authority to issue instructions to the internal audit division
with regard to matters necessary for their auditing activities.
 Concerning instructions received from Audit & Supervisory Board members with regard to matters necessary for
their auditing activities, employees at the internal audit department shall not be bound by the chain of command
leading down from Directors.
 The Company shall respect the Audit & Supervisory Board members’ opinions with regard to matters related to theappointment, transfer, evaluation, disciplinary actions and so forth, of the employees at the internal audit department.
8) Systems for Reporting by Directors and Employees to Audit & Supervisory Board Members and for Securing
Effective Audits by Audit & Supervisory Board Members
 Audit & Supervisory Board members shall be given the authority to request necessary reports from directors andemployees at any time.
 The Representative Directors shall provide the Audit & Supervisory Board members with opportunities to exchange
opinions with them regularly.
 The internal audit department shall make sure to submit reports to Audit & Supervisory Board members after
conducting audits of operations, etc.
 The Company shall establish an appropriate system for the reporting of matters concerning compliance, such as legal
violation, to Audit & Supervisory Board members by setting compliance rules.
 Any disadvantageous treatment given to Directors and Employees who contribute through reports to audits by Audit& Supervisory Board members, or to Directors, Audit & Supervisory Board members and Employees of subsidiaries
is prohibited.
 When Audit & Supervisory Board members request to the Company the payment in advance for the expenses related
to the execution of their auditing duties, the Company shall pay such costs or amortize the liability immediately.
Moreover, in order to pay the expenses incurred in the execution of duties by Audit & Supervisory Board members,
the Company shall allocate a certain amount of budget each year.
(2) Outline of the Status of Operation of the System for Securing Appropriateness of Business Operations
The status of operation of the system for securing appropriateness of business operations is shown as below.
 The Company has set a code of conduct its directors and employees are required to comply with, and is currently
taking thorough measures to make this code known by everyone at the training for new employees, as well as throughperiodic publications in the Company’s newsletter, postings within offices, or by distributing cards internally.
Furthermore, in order to assess the implementation status of this code of conduct, the Company regularly conducts
an employee questionnaire. The results of the questionnaire are reported to the Board of Directors and the degree ofawareness toward the code of conduct is confirmed.
 The Company has established internal reporting regulations which define items including confidentiality of whistleblowers, prohibition of disadvantageous treatment of whistle-blowers, and prohibition of handling of reported
incidents by individuals who are personally involved in said incidents. The Company operates an internal control
22system. Furthermore, in order to strengthen independence from management, the Company includes all Audit &Supervisory Board members in the reporting contact point.
 The Company has established an Auditing Office as its internal auditing department. Currently, three dedicated staffs
are stationed at the Auditing Office as of the date of creation for this business report. After conducting an operational
audit, the Auditing Office submits an auditing report to the Representative Directors and to Audit & Supervisory
Board members. Furthermore, the Audit & Supervisory Board members and Auditing Office hold meetings asnecessary. Audit & Supervisory Board members gather information from the Auditing Office; for example,
requesting reports on the status of the internal control system and related auditing results. Audit & Supervisory Board
members also provide instruction and recommendations to the Auditing Office.
 Audit & Supervisory Board members shall attend the meetings of the Board of Directors. Furthermore, Full-time
Audit & Supervisory Board members shall attend management and executive committee meetings, management
strategy meetings and other important gatherings on a permanent basis. In addition to holding deliberation withAccounting Auditors at the beginning of the fiscal year under review in order to formulate an audit plan, Audit &Supervisory Board members meet periodically and as necessary, and are present during the performance ofaccounting audits as necessary.
 The General Risk Committee makes reports to the Board of Directors, as necessary, on the state of responses being
made for risks that have arisen. Also, regarding new risks requiring response, after assessing these, the General Risk
Committee reports on the effectiveness of the risk policies and associated management systems to the Board of
Directors.
 During the period, ordinary meetings of the Board of Directors were held 13 times.
 The scope of matters to be resolved by the Board of Directors was limited to legal matters and fundamental mattersof the Company (disposal of important assets such as investments, corporate code of conduct, corporate philosophy,
code of conduct, establishment/revision of basic management policies and management plans, items related tocorporate governance, etc.). Other matters shall be delegated to corporate management meetings and executive
directors, and action shall be taken in accordance with rules. In regards to the executions of said actions, executive
directors shall report to the Board of Directors as necessary. Through these reports, the Board of Directors shallsupervise the decision-making and business operation of executive directors.
 Audit & Supervisory Board members perform accounting audits in important subsidiaries in Japan, and visit
important overseas subsidiaries for periodic audits.
 In accordance with the Internal Control Management Regulations, the Internal Control Committee meets four times
during the period. In order to evaluate the effectiveness of internal controls at the Company, the Internal Control
Committee considers the self-assessment results of self-inspection and the results of independent evaluation by the
Auditing Office. Results are reported to the COO.
 Representative Directors meet periodically with Audit & Supervisory Board members and Independent External
Directors in order to exchange opinions. Furthermore, separate meetings are held between Audit & Supervisory
Board members and Independent External Directors in order to exchange opinions.

23

Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETSanshin Electronics Co., Ltd.
As of March 31, 2024
Millions of yen
ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable–trade, andcontract assets
Electronically recorded monetary claims

8,793
32,012
2,472

Merchandise inventories

22,927

Partly-finished work1

Accrued income

103

Consumption taxes receivable

4,826

Others987

Allowance for doubtful accounts
Total current assets(28)
72,095

Non-current assets:
Property and equipment
Buildings and structures

1,182

Land

1,135
174
352

Leased assets
Construction in progress
Others77
2,921

Total property and equipment

301

Intangible assets:
Investments and other assets:
Investment securities
Deferred tax assets
Assets related to retirement benefits
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
TOTAL

3,288
83
79
170
(57)
3,564
6,788
78,884

Note: Figures are rounded down to the nearest million yen.

25

CONSOLIDATED BALANCE SHEETSanshin Electronics Co., Ltd.
As of March 31, 2024
Millions of yen
LIABILITIES AND NET ASSETS:
LIABILITIES:Current liabilities:
Notes and accounts payable–trade
Short-term loans payable
Lease obligations
Accrued corporate tax, etc.
Allowance for bonuses to employees
Allowance for bonuses to Directors and Audit &Supervisory Board members
OthersTotal current liabilities

1,621
39,949Non-current liabilities:
Lease obligations
Deferred tax liabilities
Allowance for stock compensation
OthersTotal non-current liabilities
Total liabilities

99
206
150
105
561
40,510

NET ASSETS:
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

14,811
16
26,266(8,758)32,335

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred hedge gains (losses)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
TOTAL

1,014
(63)
4,933
74
5,959
77
38,37378,884

Note: Figures are rounded down to the nearest million yen.

26

13,35023,959
80
364
517
56

CONSOLIDATED PROFIT AND LOSS STATEMENTSanshin Electronics Co., Ltd.
For the year ended March 31, 2024
Millions of yen
140,197
124,643
15,5539,804
5,748

Net sales
Cost of sales:
Gross profit on sales
Selling, general and administrative expenses:
Operating profit
Non-operating profit:
Interest income
Dividend income
OthersNon-operating expenses:
Interest expenses
Foreign exchange losses
OthersOrdinary profit
Extraordinary profits:
Gain on sales of investment securities
Extraordinary losses:
Loss on retirement of non-current assets
Loss on valuation of investment securities
Net profit before tax and other adjustments

114
38
77
963
1,077
29

14
11
26

Corporate, resident and enterprise taxes
Adjustment for corporate tax, etc.
Net profit
Net profit attributable to non-controlling interests
Net profit attributable to shareholders of parent company
Note: Figures are rounded down to the nearest million yen.

27

1,097
39

231

2,071
3,908
14

37
3,886
1,137
2,748
8
2,740

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITYSanshin Electronics Co., Ltd.
For the year ended March 31, 2024

Millions of yen

Shareholders’ equity
CapitalsurplusCapital stock
14,811

Balance as of April 1, 2023

16

Retainedearnings

Treasury stock

25,255(8,777)

Total
shareholders’equity31,305

Changes during the term
Dividends of surplus
Net profit attributable to shareholdersof parent company(1,729)(1,729)

2,740

2,740

Purchase of treasury stock

(0)

(0)

Disposal of treasury stock
Net changes of items other thanshareholders’ equity

19

19

Total changes during the term

－

－

1,010

18

1,029

Balance as of March 31, 2024

14,811

16

26,266(8,758)32,335

Accumulated other comprehensive income

Balance as of April 1, 2023

Valuationdifferenceonavailablefor-salesecurities
568

DeferredForeignhedge
currency
gains
translation(losses) adjustments
44

2,424

Remeasure
Total
NonTotal net
ments ofaccumulated
controlling
assetsdefinedotherinterests
benefitcomprehensive
plansincome
(160)

2,877

69

34,252

Changes during the term
(1,729)Dividends of surplus
Net profit attributable to2,740

shareholders of parent company
Purchase of treasury stock(0)

Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes during the term

19
445

(108)

2,509

235

3,082

8

3,090

445

(108)

2,509

235

3,082

8

4,120

Balance as of March 31, 2024

1,014

(63)

4,933

74

5,959

77

38,373

Note: Figures are rounded down to the nearest million yen.

28

Non-Consolidated Financial Statements
NON-CONSOLIDATED BALANCE SHEETSanshin Electronics Co., Ltd.
As of March 31, 2024
Millions of yen
ASSETS
Current assets:
Cash and deposits
Trade notes
Electronically recorded monetary claims
Accounts receivable–trade and contract assets
Merchandise inventories
Partly-finished work
Advance payment
Prepaid expenses
Short-term loans receivable from subsidiaries and associates
Accrued income
Consumption taxes receivable
OthersAllowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment:
Buildings
Structures
Tools and fixtures
Land

3,207
65
2,472
17,283
13,329
1
420
154
1,861
158
4,826
33
(0)
43,814

1,175
2
54
1,135
102
352
2,823

Leased assets
Construction in progress
Total property and equipment
Intangible assets:
Software
Others210
46
257

Total intangible assets
Investments and other assets:
Investment securities
Stocks of subsidiaries and affiliates
Guarantee money deposit
Prepaid pension costs
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
TOTAL

3,163
3,557
18
82
37
(12)
6,846
9,927
53,742

Note: Figures are rounded down to the nearest million yen.
29

NON-CONSOLIDATED BALANCE SHEETSanshin Electronics Co., Ltd.
As of March 31, 2024
Millions of yen
LIABILITIES AND NET ASSETS:
LIABILITIES:Current liabilities:
Trade notes
Accounts payable
Short-term loans payable
Lease obligations
Accounts payable - otherAccrued expenses
Accrued corporate tax, etc.
Advance received
Allowance for bonuses to employees
Allowance for bonuses to Officers
OthersTotal current liabilities

706
10,596
20,064
41
273
190
215
623
517
56
203
33,488Non-current liabilities:
Lease obligations
Deferred tax liabilities
Allowance for stock compensation
OthersTotal non-current liabilities
Total liabilities

61
136
150
105
453
33,942NET ASSETS:
Shareholders’ equity:
Capital stock
Capital surplus
Other capital surplus
Retained earnings
Retained surplus
Other retained earnings
Reserve for dividend payments
Retained earnings brought forward
Treasury stock
Total shareholders’ equity

14,81116
16
12,779394
12,385600
11,785(8,758)18,848Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Deferred hedge gains (losses)
Total valuation and translation adjustments
Total net assets
TOTAL

1,014
(63)
951
19,80053,742

Note: Figures are rounded down to the nearest million yen.

30

NON-CONSOLIDATED PROFIT AND LOSS STATEMENTSanshin Electronics Co., Ltd.
For the year ended March 31, 2024
Millions of yen
94,51385,966
8,547
7,054
1,493

Net sales
Cost of sales:
Gross profit on sales
Selling, general and administrative expenses:
Operating profit
Non-operating profit:
Interest and dividend income
Foreign exchange gains
Management consulting fees
OthersNon-operating expenses:
Interest expenses
OthersOrdinary profit
Extraordinary profits:
Gain on sales of investment securities
Extraordinary losses:
Loss on retirement of non-current assets
Loss on valuation of investment securities
Net profit before tax and other adjustments
Corporate, resident and enterprise taxes
Adjustment for corporate tax, etc.
Net profit

2,141
90
174
38
415
29

14
0
26
519
58

2,444

444
3,493
14

26
3,481
578
2,903

Note: Figures are rounded down to the nearest million yen.

31

NON-CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYSanshin Electronics Co., Ltd.
For the year ended March 31, 2024
Millions of yen
Shareholders’ equity
Capital surplus
Capital stock

Balance as of April 1,
2023

14,811Retained earnings
Other retained earnings

Other capitalsurplus

Total capitalsurplus16

Retained surplus

16

Reserve for
Retained earnings
dividend payments brought forward

221

600

Total retained
earnings

Treasury
stock

Total
shareholders’equity(8,777)

17,656

10,784

11,605(1,729)(1,729)(1,729)

(172)

－

－

2,903

2,903

2,903

Changes during the term
Dividends of surplus
Provision of retained
surplus1723

Net profit
Purchase of treasury
stock

(0)

(0)

Disposal of treasury
stock

19

19

Net changes of items
other thanshareholders’ equity
Total changes during the
term

－

-

-

172

－

1,001

1,174

18

1,192

Balance as of March 31,
2024

14,811

16

16

394

600

11,785

12,779(8,758)18,848Valuation and translation adjustments

Balance as of April 1, 2023

Valuation difference on
available-for-sale securities

Deferred hedge gains (losses)

Total valuation and translation
adjustments

568

44

613

Total net assets
18,269Changes during the term
Dividends of surplus(1,729)Provision of retained surplus－

Net profit

2,903

Purchase of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes during the term
Balance as of March 31, 2024

(0)
19
445

(108)

445

(108)

337

1,530

1,014

(63)

951

19,800Note: Figures are rounded down to the nearest million yen.

32

337

337

Audit Report
Report of the audit of the consolidated accounts by Accounting Auditors

Independent Auditor’s Report
May 10, 2024
To the Board of Directors of Sanshin Electronics Co., Ltd.:

Deloitte Touche Tohmatsu LLC, Tokyo Office
Hirotsugu Mizuno
Designated and Engagement Limited Partner
Certified Public Accountant
Akiko Fujiharu
Designated and Engagement Limited Partner
Certified Public Accountant

Auditors' opinions
Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the consolidated financial statements, which
consist of the consolidated balance sheet, consolidated profit and loss statement, consolidated statement of changes inshareholders’ equity and notes to consolidated financial statements, of Sanshin Electronics Co., Ltd., (the “Company”)
for the consolidated fiscal year from April 1, 2023 to March 31, 2024.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position and results of operations of the Company and its consolidated subsidiaries for the related consolidated fiscal
year, and the consolidated results of their operations and their cash flows for the years then ended in conformity withcorporate accounting standards generally accepted in Japan.
Basis for Auditors’ opinions
We have carried out the audit in compliance with auditing standards generally recognized as fair and appropriate inJapan. Our responsibilities under these standards are stated in the “Responsibilities of Auditors in the auditing of
consolidated financial statements.” In accordance with applicable regulations related to occupational ethics in Japan,
we are independent from the Company and its consolidated subsidiaries and fulfill all other ethical responsibilities as
Auditors. We believe that the audit evidence we have obtained is sufficient and appropriate, and provides a reasonablebasis for our opinions.
Other content
Other contents are the business report and its detailed statements. The Company’s management is responsible forpreparing and disclosing other content. Audit & Supervisory Board members and the Audit & Supervisory Board are
responsible for monitoring the Directors’ execution of their work operations concerning reporting process preparationand implementation for other content.
33

Other content is not included in the Auditors’ opinion on the consolidated financial statements. We do not express an
opinion on the other content.
The responsibility of us in the audit of consolidated financial statements is to read through other content and, during theprocess of reading through, to examine whether there are any significant differences between other content and theconsolidated financial statements or the knowledge gained by us during the audit process, and to pay attention to any
other signs of significant error in other content other than those significant differences.
Based on the work performed, if we judge that there are significant errors in other content, we are required to report on
those facts.
There are no matters related to other content that require reporting by us.
Responsibilities of the Company’s management, Audit & Supervisory Board members, and the Audit & Supervisory
Board for preparation of consolidated financial statements
The Company's management is responsible for preparing and fairly presenting these consolidated financial statementsin accordance with corporate accounting standards generally accepted in Japan. This includes designing and operatinginternal controls judged by management as necessary to prepare and fairly present consolidated financial statements thatare free from material misstatements due to fraud or error.
In the course of drafting consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements based on the premise of a going concern and disclosing theapplicable information for matters related to said going concern when necessary based on corporate accounting
standards which are generally accepted in Japan.
The Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for monitoring the
Directors’ execution of their work operations concerning financial reporting process preparation and implementation.
Responsibilities of Auditors in the auditing of consolidated financial statements
For the audits they perform, Auditors are responsible for acquiring a reasonable guarantee based on the audits they
performed that there is no fraud or error within the consolidated financial statements as a whole which results in material
misstatements and expressing an opinion on the applicable consolidated financial statements from their independent
perspective within their audit report. Misstatements can occur as a result of fraud or error, and when these misstatements
can reasonably be considered to affect the decision-making of consolidated financial statement users either individuallyor in total, they are determined to be material.
Auditors carry out the following auditing process in compliance with auditing standards generally recognized as fair
and appropriate in Japan, using their professional and specialist judgment and maintaining a sense of professional
skepticism in their work.
・Auditors identify and evaluate the risk of material misstatements resulting from fraud or error. Auditors also propose
and implement auditing procedures for handling risks of these material misstatements. Selection and application ofauditing procedures are carried out at the discretion of the Auditor. In addition, Auditors acquire audit evidence thatis both sufficient and appropriate as a basis for stating their opinions.
・Expressing an opinion on the effectiveness of internal controls is not the purpose of auditing consolidated financial
statements. However, Auditors consider internal controls related to the audit as part of their risk evaluations in orderto formulate appropriate auditing procedures to fit the circumstances.
・Auditors evaluate the appropriateness of the accounting policy chosen by the management and the methods for its
application, as well as the reasonableness of accounting estimates carried out by management and the validity ofrelated explanatory notes.
・Auditors evaluate whether it is appropriate for the management to draft consolidated financial statements on thepremise of a going concern. They also come to a conclusion regarding whether major uncertainties can be recognized
related to matters or circumstances giving rise to serious doubts concerning the premise of a going concern based on34

evidence acquired through the auditing process. If major uncertainties concerning the premise of a going concern canbe recognized, Auditors caution consolidated financial statement users on this point in their audit reports, calling forattention to the explanatory notes. In addition, if the explanatory notes in the consolidated financial statements related
to the applicable major uncertainty are not appropriate, Auditors are expected to indicate an exception in their opinion
statements on the consolidated financial statements. Although the conclusions of Auditors are based on the auditing
evidence they acquire up until the date of their audit report, there is still a possibility that a company will be unable
to continue its business as a going concern due to future events and circumstances.
・In addition to determining whether the indications and explanatory notes of the consolidated financial statements arein compliance with corporate accounting standards generally accepted in Japan, Auditors also evaluate whether theindications, structure, and content of consolidated financial statements and their related explanatory notes, as well as
the transactions and accounting matters on which these statements are based, are presented fairly.
・In order to express an opinion on consolidated financial statements, Auditors must acquire sufficient and appropriate
auditing evidence related to financial affairs of the Company and its consolidated subsidiaries. Auditors are
responsible for instructions, supervision, and implementation operations related to the auditing of consolidated
financial statements. Auditors are solely responsible for their audit opinions.
Auditors will report the planned auditing scope, implementation period, important findings from the auditing process(including major deficiencies identified related to the internal controls), and other matters required by the auditing
standards to the Company’s Audit & Supervisory Board members and Audit & Supervisory Board.
Auditors will report on their adherence to independence as required by Japan’s occupational ethics regulations, matterswhich could reasonably be considered to affect this independence, and the content of any safeguards measures
implemented for the removal or mitigation of obstructing factors to the Company’s Audit & Supervisory Board members
and Audit & Supervisory Board.
Interest relationships
There are no interest relationships between the Company or consolidated subsidiaries and the auditing firm or between
the Company or consolidated subsidiaries and the Designated and Engagement Limited Partners that are required to bereported according to the Certified Public Accountants Act.

35

Report of the audit of the accounts by Accounting Auditors

Independent Auditor’s Report
May 10, 2024
To the Board of Directors of Sanshin Electronics Co., Ltd.:

Deloitte Touche Tohmatsu LLC, Tokyo Office
Hirotsugu Mizuno
Designated and Engagement Limited Partner
Certified Public Accountant
Akiko Fujiharu
Designated and Engagement Limited Partner
Certified Public Accountant

Auditors' opinions
Pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the financial statements, which
consist of the balance sheet, profit and loss statement, statement of changes in shareholders’ equity, notes to nonconsolidated financial statements, and detailed statements thereof (“financial statements”), of Sanshin Electronics Co.,
Ltd., (the “Company”) for the 73rd fiscal year from April 1, 2023 to March 31, 2024.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position
and results of operations for the related fiscal year in conformity with corporate accounting standards generally acceptedin Japan.
Basis for Auditors’ opinions
We have carried out the audit in compliance with auditing standards generally recognized as fair and appropriate inJapan. Our responsibilities under these standards are stated in the “Responsibilities of Auditors in the auditing offinancial statements.” In accordance with applicable regulations related to occupational ethics in Japan, we are
independent from the Company and fulfill all other ethical responsibilities as Auditors. We believe that the audit
evidence we have obtained is sufficient and appropriate, and provides a reasonable basis for our opinions.
Other content
Other contents are the business report and its detailed statements. The Company’s management is responsible forpreparing and disclosing other content. Audit & Supervisory Board members and the Audit & Supervisory Board are
responsible for monitoring the Directors’ execution of their work operations concerning reporting process preparationand implementation for other content.
Other content is not included in the Auditors’ opinion on the financial statements. We do not express an opinion on theother content.
The responsibility of us in the audit of financial statements is to read through other content and, during the process ofreading through, to examine whether there are any significant differences between other content and the financial
statements or the knowledge gained by us during the audit process, and to pay attention to any other signs of significant
36

error in other content other than those significant differences.
Based on the work performed, if we judge that there are significant errors in other content, we are required to report on
those facts.
There are no matters related to other content that require reporting by us.
Responsibilities of the Company’s management, Audit & Supervisory Board members, and the Audit & Supervisory
Board for preparation of financial statements
The Company's management is responsible for preparing and fairly presenting these financial statements in accordancewith corporate accounting standards generally accepted in Japan. This includes designing and operating internal controls
judged by management as necessary to prepare and fairly present financial statements that are free from material
misstatements due to fraud or error.
In the course of drafting financial statements, management is responsible for assessing whether it is appropriate toprepare the financial statements based on the premise of a going concern and disclosing the applicable information formatters related to said going concern when necessary based on corporate accounting standards which are generally
accepted in Japan.
The Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for monitoring the
Directors’ execution of their work operations concerning financial reporting process preparation and implementation.
Responsibilities of Auditors in the auditing of financial statements
For the audits they perform, Auditors are responsible for acquiring a reasonable guarantee based on the audits they
performed that there is no fraud or error within the financial statements as a whole which results in material
misstatements and expressing an opinion on the applicable financial statements from their independent perspective
within their audit report. Misstatements can occur as a result of fraud or error, and when these misstatements canreasonably be considered to affect the decision-making of financial statement users either individually or in total, they
are determined to be material.
Auditors carry out the following auditing process in compliance with auditing standards generally recognized as fair
and appropriate in Japan, using their professional and specialist judgment and maintaining a sense of professional
skepticism in their work.
・Auditors identify and evaluate the risk of material misstatements resulting from fraud or error. Auditors also propose
and implement auditing procedures for handling risks of these material misstatements. Selection and application ofauditing procedures are carried out at the discretion of the Auditor. In addition, Auditors acquire audit evidence thatis both sufficient and appropriate as a basis for stating their opinions.
・Expressing an opinion on the effectiveness of internal controls is not the purpose of auditing financial statements.
However, Auditors consider internal controls related to the audit as part of their risk evaluations in order to formulate
appropriate auditing procedures to fit the circumstances.
・Auditors evaluate the appropriateness of the accounting policy chosen by the management and the methods for its
application, as well as the reasonableness of accounting estimates carried out by management and the validity ofrelated explanatory notes.
・Auditors evaluate whether it is appropriate for the management to draft financial statements on the premise of a going
concern. They also come to a conclusion regarding whether major uncertainties can be recognized related to mattersor circumstances giving rise to serious doubts concerning the premise of a going concern based on evidence acquired
through the auditing process. If major uncertainties concerning the premise of a going concern can be recognized,
Auditors caution financial statement users on this point in their audit reports, calling for attention to the explanatory
notes. In addition, if the explanatory notes in the financial statements related to the applicable major uncertainty are
not appropriate, Auditors are expected to indicate an exception in their opinion statements on the financial statements.
Although the conclusions of Auditors are based on the auditing evidence they acquire up until the date of their audit
37

report, there is still a possibility that a company will be unable to continue its business as a going concern due tofuture events and circumstances.
・In addition to determining whether the indications and explanatory notes of the financial statements are in compliancewith corporate accounting standards generally accepted in Japan, Auditors also evaluate whether the indications,structure, and content of financial statements and their related explanatory notes, as well as the transactions andaccounting matters on which these statements are based, are presented fairly.
Auditors will report the planned auditing scope, implementation period, important findings from the auditing process(including major deficiencies identified related to the internal controls), and other matters required by the auditing
standards to the Company’s Audit & Supervisory Board members and Audit & Supervisory Board.
Auditors will report on their adherence to independence as required by Japan’s occupational ethics regulations, matterswhich could reasonably be considered to affect this independence, and the content of any safeguards measures
implemented for the removal or mitigation of obstructing factors to the Company’s Audit & Supervisory Board members
and Audit & Supervisory Board.
Interest relationships
There are no interest relationships between the Company and the auditing firm or between the Company and the
Designated and Engagement Limited Partners that are required to be reported according to the Certified Public
Accountants Act.

38

Report of the Audit & Supervisory Board

Audit & Supervisory Board Members’ Report
The Audit & Supervisory Board (the “Board”), having deliberated on the audit reports prepared by the Audit &Supervisory Board members on the performance of the duties of Directors for the 73rd fiscal year from April 1, 2023 toMarch 31, 2024 hereby reports on its audit findings as follows:
1. Method and Content of the Audit by Audit & Supervisory Board Members and the Board(1) The Board established the audit policy and allocation of duties, etc., received reports from Audit & Supervisory
Board members on the status of the execution and results of their audits, received reports from Directors and the
Accounting Auditors on the status of execution of their duties and requested explanations as needed.
(2) In compliance with the auditing standards set by the Audit & Supervisory Board and based on the audit policy,
assigned duties, etc., each Audit & Supervisory Board member maintained proper communication with Directors,
internal audit staff and other employees, and strove to create an environment that supports the collection and audit
of information, as well as they conducted audit by the following methods.
1) Attended meetings of the Board of Directors and other important gatherings, received reports from Directors andemployees on the status of the execution of their duties, requested explanations as necessary, and examined thesituation of the operations and assets of the head office and principal offices. In addition, the Audit & Supervisory
Board members also maintained appropriate communication and exchanged information with Directors and Audit& Supervisory Board members of subsidiaries, and received reports about operations from subsidiaries whennecessary.
2) In order to ensure the system guaranteeing that the performance of the work of the Directors stipulated in thebusiness reporting is in accordance with laws and ordinances and the Articles of Incorporation, and also to ensure
appropriateness of all the other business processes that are required in a group comprising a joint stock company andits subsidiaries, regarding the corporate resolutions on the creation of a system in accordance with Article 100,
Paragraphs 1 and 3 of the Enforcement of the Companies Act, as well as regarding the system (internal control
system) currently maintained based on the contents of the corporate resolutions concerned, the Audit & Supervisory
Board members regularly received reports from Directors, employees, etc., on the current situation of theestablishment and the implementation of such system, requested explanations as necessary, and expressed theiropinions.
3) In addition, the Audit & Supervisory Board members monitored and verified whether the Accounting Auditors
maintained their independence and implemented appropriate audits and received reports from the Accounting
Auditors on the status of execution of their duties, and requested explanations as needed. In addition, Audit &Supervisory Board members were informed by the Accounting Auditors that they were developing the “structureand system to ensure that their duties would be executed in a proper manner” (items prescribed in Article 131 of the
Corporate Calculation Regulations) in accordance with “Quality Control Standards for Auditing” (BusinessAccounting Council), and requested explanations as needed.
Based on the aforementioned methods, the Audit & Supervisory Board members examined the Company’s business
report and its detailed statements, financial statements (non-consolidated balance sheets, non-consolidated profit andloss statement, non-consolidated statement of changes in shareholders’ equity and notes to the non-consolidated
financial statements), their detailed statements, and consolidated financial statements (consolidated balance sheets,
consolidated profit and loss statement, consolidated statement of changes in shareholders’ equity and notes toconsolidated financial statements) for the fiscal year under review.
392. Results of the Audit(1) Results of the audit of the business report and its detailed statements(a) The business report and its detailed statements present fairly the status of the Company in conformity with therelevant laws and Articles of Incorporation.
(b) No misconduct or material fact running counter to the relevant laws or Articles of Incorporation has been foundwith respect to the execution of Directors’ duties.
(c) The content of the resolutions of the Board of Directors on the internal control system are fair and reasonable.
No item worthy of special mention has been found with respect to the contents of the business report and theexecution of Directors’ duties concerning the relevant internal control system.
(2) Results of the audit of financial statements and their detailed statements
The audit methods adopted and the results of the audit conducted by Deloitte Touche Tohmatsu, Accounting
Auditors, are appropriate.
(3) Results of the audit of consolidated financial statements
The audit methods adopted and the results of the audit conducted by Deloitte Touche Tohmatsu, Accounting
Auditors, are appropriate.
May 10, 2024
Audit & Supervisory Board
Sanshin Electronics Co., Ltd.
Akio Misono, Full-time Audit & Supervisory Board member
Shin-ichi Miura, Full-time Audit & Supervisory Board member
Shohei Yamamoto, External Audit & Supervisory Board member
Kuniharu Kezuka, External Audit & Supervisory Board member

40