Note:
This English translation is made for reference purposes only, and in the event of any
discrepancies between the English version and the Japanese version, the Japanese version
prevails.

Commencement date of electronic provision measures: May 31, 2024

Notice of the Tenth Ordinary General Meeting of Shareholders (Items
Omitted from the Paper Copy)

Business Report
Share Subscription Rights and Others
Accounting Auditor
Systems to Ensure Appropriateness of Business and Operational Status of Such Systems

Consolidated Financial Statements
Consolidated Statement of Changes in Net Assets
Notes to the Consolidated Financial Statements

Non-consolidated Financial Statements
Non-consolidated Statement of Changes in Net Assets
Notes to the Non-consolidated Financial Statements

Pursuant to laws and regulations as well as the Articles of Incorporation of the Company, the above matters
are not stated in the documents to be delivered to shareholders who have requested delivery of documents(Electronic Provision of Matters).

Socionext Inc.

Share Subscription Rights and Others
Share subscription rights held by the Company’s officers as compensation for execution of duties as of the endof the fiscal year under review.
Date of resolution to issue
Number of rights issued
Type and number of shares to beissuedPayment amount for sharesubscription rights
Value of assets to be contributed
upon exercise of share subscription
rightsPeriod of exercise

Fourth issue of share subscription rights
July 25, 2018
38,560Sixth issue of share subscription rights
July 29, 2019
13,600Common stock
17,000 shares(For each share subscription right 1.25
shares)No payment is required in exchange for No payment is required in exchange forshare subscription rights
share subscription rights
For each share subscription right 641 yen For each share subscription right 641 yen(Per share
513 yen) (Per share
513 yen)From July 26, 2020
to July 25, 2028
Notes:

Conditions of exercise
Director
Number of rights issued(excluding Audit &Number of shares to be issued
Supervisory Committee
sharesMembers and Outside
Number of holders
Directors)
Shareacquisition Outside Director
Number of rights issued
rights held (excluding Audit &Number of shares to be issued
by officers Supervisory Committee
Number of holders
Members)
Director
Number of rights issued(Audit & Supervisory
Number of shares to be issued
Committee Member)
Number of holders

Date of resolution to issue
Number of rights issued
Type and number of shares to beissuedPayment amount for sharesubscription rights
Value of assets to be contributed
upon exercise of share subscription
rightsPeriod of exercise

From July 30, 2021
to July 29, 2029
Notes:
38,560 Number of rights issued
48,200 Number of shares to be issued
shares
1 Number of holders

13,60017,0000 Number of rights issued
0 Number of shares to be issued
0 Number of holders

000

0 Number of rights issued
0 Number of shares to be issued
0 Number of holders000Eighth issue of share subscription rights
March 24, 2021
18,300Common stock
22,875 shares(For each share subscription right 1.25
shares)No payment is required in exchange forshare subscription rights
For each share subscription right 641 yen(Per share
513 yen)From March 25, 2023
to March 24, 2031
Notes:

Conditions of exercise
Director
Number of rights issued(excluding Audit &Number of shares to be issued
Supervisory Committee
sharesMembers and Outside
Number of holders
Directors)
Shareacquisition Outside Director
Number of rights issued
rights held (excluding Audit &Number of shares to be issued
by officers Supervisory Committee
Number of holders
Members)
Director
Number of rights issued(Audit & Supervisory
Number of shares to be issued
Committee Member)
Number of holders-1-

18,30022,875
2
0
0
0
0
0
0

2

(Notes) 1. The main conditions for exercising share acquisition rights are as follows:i. At the time of exercise of share acquisition rights, a position of either director, executive
officer or employee (hereafter referred to as “Directors, etc.”) must be held in the Company
or any subsidiaries or affiliates of the Company, which are stipulated in “Regulations on
Terminology, Forms and Preparation Methods of Financial Statements, etc.” (hereafter, theCompany’s subsidiaries and affiliates will be collectively referred to as the “Affiliates”).
However, this shall not apply to the case of retirement or resignation from the position of
Directors, etc. of the Company or the Affiliates for the reasons described below.
1) Retirement or resignation due to reaching the age of retirement or completion of the termof office2) Retirement due to death3) A career change mediated by the Company
4) In the event that the Company determined by its reasonable discretion that the resignation
is voluntary due to illness or other unavoidable circumstancesii. Share subscription rights may be exercised not more than twice a year, provided that the
number of shares to be issued upon exercise is an integer multiple of the number of shares in
one unit of the Company. However, notwithstanding this provision, a holder of sharesubscription rights for which the number of shares underlying all the share subscription rights
he or she holds is less than an integer multiple of the number of shares in one unit of theCompany may exercise his or her share subscription rights for less than an integer multiple ofthe number of shares in one unit only when he or she exercises all of his or her sharesubscription rights for less than an integer multiple of the number of shares in one unit.
iii. Upon the death of a holder of share subscription rights, the holder may exercise his or her
share subscription rights only if one of his or her legal heirs inherits all of the sharesubscription rights. If the legal heir in question dies, the rights in question will be extinguished.
iv. If a holder of share subscription rights is subject to suspension from work or a pay cut at theCompany or the Affiliates, he or she may not exercise his or her share subscription rights for
one year from the issuance of such measure.
v. Share subscription rights may not be exercised if the holder of the share subscription rights isin dispute with the Company or the Affiliates.
vi. Even if the initial date of the period for exercise has arrived, share subscription rights may
not be exercised until six months after the listing of the Company’s Common Stock on afinancial instruments exchange.
vii. Even if the initial date of the period for exercise has arrived, share subscription rights may
not be exercised when the holder of the subscription rights is stationed overseas.
2. “Number of shares to be issued upon exercise of share acquisition rights” and the “Value of assets
to be contributed upon exercise of share subscription rights” have been adjusted in accordancewith a stock split at a ratio of 1 common stock to 5 shares implemented on January 1, 2024.

-2-

Accounting Auditor
1)

Name: Ernst & Young ShinNihon LLC

2)Amount of fees etc.
Fees for the Accounting Auditor for the Company’s fiscal year under review are as follows:
Categorya.

Fees for auditing services under Article 2, Paragraph 1 of theCertified Public Accountants Act

75 million yenb.

Total amount of cash and other property benefits payable by
the Company

98 million yen(Notes) 1.

2.

3)

4)

Amount paid

Reasons for the consent of the Audit & Supervisory Committee to the fee amount for theaccounting auditor
In addition to obtaining necessary materials and receiving reports from Directors, relevant
departments within the Company, and the accounting auditor, the Audit & Supervisory
Committee reviewed the execution of the audit plan and audit procedures, and theappropriateness of the estimated fees for the fiscal year under review. As a result, the Audit& Supervisory Committee determined and agreed that the fees for the accounting auditor
were at a reasonable level in order to maintain and improve the quality of audits.
The following significant subsidiaries have been audited by audit firms other than the said
accounting auditor.
*
Socionext America Inc.
*
Socionext Europe GmbH*
Socionext Technology Pacific Asia Ltd.
*
Socionext Technology(Shanghai)Co., Ltd.
*
Socionext Taiwan Inc.
*
Socionext Korea Ltd.

Non-audit services
The Company pays its accounting auditor for their non-audit work, which is writing comfort letters about
overseas offering of common stock.
Policy for determining dismissal or non-reappointment of accounting auditor
In the event any of the reasons stipulated in Article 340, Paragraph 1 of the Companies Act becomesapplicable to the accounting auditor, the Audit & Supervisory Committee shall dismiss the accounting
auditor based on the unanimous agreement of the Audit & Supervisory Committee Members as necessary.
In addition, other than the above, in the event that it is deemed difficult to conduct a proper audit due tothe occurrence of events that impair the qualifications and independence of the accounting auditor, theAudit & Supervisory Committee shall determine the content of proposals regarding the dismissal or nonreappointment of the accounting auditor to be submitted to the General Meeting of Shareholders.

-3-Systems to Ensure Appropriateness of Business and Operational Status of Such Systems

The Group's status of development and operation of internal control system is outlined below.
◆ Basic Policy on the Development of Internal
Control Systems◆ Overview of Operational Status

Pursuant to the Companies Act and theRegulations for Enforcement of the Companies
Act, the Company shall establish an internal
control system for a business group consisting of
the Company and its subsidiaries (hereinafterreferred to as “the Group”) in order to ensure theappropriateness of business operations.

An outline of the operational status of the system
to ensure the appropriateness of business
operations during the fiscal year under review is
as follows.

(1) Systems to ensure that the execution of the duties by officers and employees complies with laws and regulations
and the Articles of Incorporation◇ Systems
1) The Company shall be committed topromotingcompliance,
includingcompliance with laws and regulations andthe Articles of Incorporation, by establishinginternal rules, such as the CSR Policy andcompliance codes, and making officers andemployees of the Group fully understand andcomply with them.
2) The Company shall clarify laws andregulations pertaining to business activitiesof the Group, establish internal rules
necessary for compliance with them, conduct
education, and develop a monitoring system.
3)

4)

5)

◇ Outline of Operational Status･
We strive to comply with laws andregulations by ensuring that all officers andemployees are fully aware of our basic
philosophy, value, Action Guidelines, the
CSR Policy and compliance codes.

If an officer or employee of the Group
becomes aware of any facts that may
constitute a material breach of compliance inconnection with the conduct of businessactivities of the Group, he or she shallimmediately notify the Board of Directors
and Audit & Supervisory Committee of theCompany of such fact through the normalline of business.
In order to enable early detection ofcompliance issues, the Company shall set up
internal and external contact points forwhistleblowing from officers and employeesof the Group, while ensuring the system toprotect whistleblowers.
The Board of Directors of the Company shallreceive regular reports on the execution ofduties from the person performing the duties
in the Group and shall confirm that there isno non-compliance in the execution ofduties.

-4-･Specifically, we are strengthening ourcompliance system by appointing a Risk
Compliance Officer for each division under
the Risk Compliance Committee.

･

We use e-learning to provide all officers andemployees with various types of complianceeducation, including matters related to theprevention of insider trading, information
security, harassment and procurementtransactions.

･The Group's officers and employees who
become aware of potential non-complianceissues should report them to the line
manager, and the details should be reported
to the Board of Directors and the Audit andSupervisory Committee.

･

We are developing and expanding our global
Whistleblowing System and make the rules
for the usage known. In addition, we pursue
the prohibition of adverse treatment or
retaliation against the whistleblower as wellas the protection of the whistleblower.

･

The Board of Directors of the Company
receives regular reports on the execution ofduties from the person performing the duties
in the Group and confirms that there is nonon-compliance in the execution of duties.

6)

The Company shall conduct an internal audit
in order to confirm the status of businessexecution in the Group, ensure compliancewith laws and regulations and the Articles ofIncorporation, etc. and make improvements
in operational efficiency.

･

The Company conducts an internal audit by
the Audit Department in order to confirm thestatus of business execution in the Group,
ensures compliance with laws andregulations and the Articles of Incorporation,etc. and makes improvements in operational
efficiency.

7)

The Group shall take a firm stand against
antisocial forces, have no relationship withthem and deal with them systematically incoordination with external professionalorganizations.

･In order to prevent transactions with antisocial forces, we check the appropriatenessof transactions as an essential response in ourbusiness processes.

(2) Systems under which information regarding execution of duties by Directors shall be retained and managed◇
1)

Systems
The Company shall properly store andmanage documents related to the executionof duties by Directors and other important
information in accordance with the Important
Document Management Regulations, after
appointing a person in charge of retention.

2)

The Company shall establish a system inwhich Directors have access at all times todocuments to confirm the status of theexecution of their duties.

◇ Outline of Operational Status･In accordance with the Important Document
Management Regulations, minutes ofgeneral meetings of shareholders, minutes ofmeetings of the Board of Directors, minutesof meetings of Management Committee andthe approval documents, etc., as theCompany’s important documents andinformation, are properly stored andmanaged with a person responsible for the
storage and the method of storage specified.
･-5-

The Company has established a system inwhich Directors can view documents toconfirm the status of execution of duties at all
times.

(3) Regulations and other systems for the risk management of loss
◇
1)

2)

◇ Outline of Operational Status･In addition to the Board of Directors
Regulations and the Management Committee
Regulations, the Company has established
the Risk Management Code and has
developed a global risk management system.

Systems
The Company shall establish a risk
management system in accordance with the
Risk Management Code. Risk managementfor overall management shall be conductedby the Management Committee, and risk
managementfordisasters/accidents,
compliance, information security, etc. shallbe conducted by the Risk Compliance
Committee.
The Company shall systematically andcontinuously extract and evaluate risks that
could cause losses to the Group, appoint an
officer for each extracted risk item to clarify
a system of responsibility, and formulate andimplement measures. In addition, when risksmaterialize, the Company shall takenecessary measures to minimize losses
arising.

3)

Based on the Business Continuity Plan
(BCP)/Business Continuity Management(BCM) Code, the Company shall clarify asystem of responsibility, prepare for acontingency such as disasters in the Groupand its business partners, and conduct
activities to ensure business continuity of the
Group

4)

In accordance with the Information Security
Code, the Company shall clarify a system of
responsibility and implement specificmeasures for the Group's information
security.

5)

The Company shall regularly report to theBoard of Directors on the status of theGroup's risk management activities.

-6-･

We have established a risk management
process and regularly have a company-widerisk review conducted by the Management
Committee. Through this process, we
ascertain information on the latest risk status,
appoint an officer for each risk, develop
measures and countermeasures against risks,and check on the progress thereof.

･

The Risk Compliance Committee reports
information security incidents and cybersecurity and confirms the progress ofcountermeasures, and checks whether any
violations of laws or regulations haveoccurred.

･As part of the BCM/BCP initiative, we
continuously engage in activities such as
developing manuals and conducting BCP
drills based on our policies during normal
times. During the fiscal year under review,
we conducted a drill in anticipation of alarge-scale disaster, and reviewed the manual
based on the issues raised there.

･

The Information Security Promotion Office
was established to further strengthen theinformation security system. In addition topromoting the development of information
security rules throughout the Group, various
information security measures were
implemented, including the introduction ofmulti-factor authentication, information
security training for officers, and drills fortargeted e-mail attacks.

･The activities of the Management Committee
and the Risk Compliance Committee areregularly and occasionally reported to theBoard of Directors.

(4) Systems to ensure efficient execution of duties by Directors◇
1)◇ Outline of Operational Status･
Directors make important management
decisions promptly at the Board of Directors
meetings and supervise the execution ofduties. In addition, among the agenda
presented to the Board of Directors meetings,
important management issues are discussed
and reviewed in advance by the Management
Committee to enhance deliberations. In
addition, through the introduction of theexecutive officer system, the Company
endeavors to accelerate business execution.

Systems
The Company shall separate the supervisory
function from the executive function ofmanagement, and the Board of Directors of
the Company shall determine basic
management policies and important businessexecution etc., and supervise executivefunction. The Company shall introduce an
executive officer system, and CEO andexecutive officers are responsible for the
executive functions of the business. In
addition, the Management Committee shallbe established to efficiently conductmultifaceted reviews in the executivefunction, and deliberates and decides onimportant matters related to management
strategy and business execution.

･-7-

Specifically, we are improving efficiency inthe execution of duties by Directors throughthe following management, etc.
-

By clarifying the business model andthe business areas of Solution SoC andpromoting a business transformationand shift of resources to growth areas,
we are focusing on large-scale global
business
opportunities
anddevelopment for business expansion
and growth.

-

To enable efficient and quick
development, we are promoting
visualization of development resources
and building a system that enables
timely resource assignment.

-

We have been building andstrengthening a structure for executionof duties as a listed company, including
enhancement of public relations andinvestor relations functions and stockrelated legal functions. In addition, the
ESG Promotion Office was establishedto promote the construction, execution
and disclosure of ESG-related businessprocesses required internally andexternally.

2)

3)

4)

･

In accordance with the Management
Committee Regulations and the Socionext
Group Approval Authority and the Affiliate
Management Regulations, important mattersrelating to the business activities of theGroup are set forth and administered as
matters to be approved by and reported to theManagement Committee. In addition,
presidents of the Group Company makemonthly business reports to the Management
Committee members, etc.

･

In the Group Company, the Company
officers and employees are assigned to serve
as officers of the Group Company tostrengthen guidance, support and supervisionon the development of operational systems.
In addition, we establish the codes applicableto the entire Group Company to strengthen
the management system of the Group
Company.

The Company shall establish a system for theefficient and lawful conduct of the Group'sbusiness by establishing the business process
fundamentals for the business.

･

The Company establishes a system for theefficient and lawful conduct of the Group'sbusiness by establishing the business process
fundamentals for the business. In addition,
we conduct internal audits of businessprocesses and take corrective actions asnecessary, while continuously improving theprocesses.

The Company shall continuously promote
the development of internal control systems
and the reform of business processes in theGroup.

･

The Internal Audit Department conducts
internal audits of the Group as a whole toensure that the Group is performing its duties
in accordance with the Socionext Group
Approval Authority and the Affiliate
Management Regulations and the rules ofbusiness processes.

The Company shall clarify the duties of theGroup's officers and employees and thereporting obligations of its subsidiary
officers and employees to the Company inaccordance with the Socionext Group
Approval Authority and the Affiliates
Management
Regulations
andtheRegulations on Organization and Separationof Duties.

-8-

5)

･

The Company shall disseminate its
management policy throughout the Groupand formulate a business plan in March ofeach year that includes the next fiscal year
and beyond. At monthly meetings of theBoard of Directors, the Company shallmonitor and supervise the achievement ofmanagement objectives by reporting on
financial results and the status of businessexecution.

The Group formulates a business plan in
March every year that includes the following
fiscal year and years beyond. In addition toquarterly management, the Group strives tomanage management indicators and targets
over the course of multiple fiscal years.
Under this structure, we strive to confirm thefeasibility of design wins and sales plans,
promote comprehensive cost and grossmargin improvements, upgrade our market
strategy and check the validity of up-front
development investments when it comes todesign wins and lead generation, globalize
and improve the efficiency of SCM, andglobalize and improve the efficiency ofcorporate operations, while at the same timebuilding and strengthening the IT
infrastructure that supports our businessactivities. The status of these initiatives isreported to the Board of Directors monthly.

(5) Matters relating to Socionext Personnel assisting with the duties of the Audit & Supervisory Committee, mattersrelating to the independence of such personnel from Directors, and matters relating to ensuring the effectivenessof directions given to such personnel◇
1)

Systems
The Company shall have Socionext
Personnel to assist with the duties of the
Audit & Supervisory Committee of theCompany and shall assign appropriate
personnel with the abilities and knowledge
required by the Audit & Supervisory
Committee of the Company.

2)

In order to ensure the independence of theSocionext Personnel referred to in thepreceding item and the effectiveness of
directions given to such Socionext Personnel
by the Audit & Supervisory Committee of
the Company, the Company shall obtain theconsent of the Audit & Supervisory
Committee of the Company with respect tomatters relating to personnel, such asappointment, transfer and compensation ofsuch Socionext Personnel.
In principle, the Company shall not allow theSocionext Personnel described in 1) above toserve concurrently with any otherorganizations. However, when it becomes
necessary to have the Socionext Personnel
with special expertise concurrently serve at
the request of the Audit & Supervisory
Committee of the Company, consideration
shall be given to ensuring the independence
set forth in the preceding paragraph.

3)◇ Outline of Operational Status･
The Company has established an Audit &Supervisory Committee Secretariat tosupport the duties of the Audit & Supervisory
Committee
andassigns
appropriate
personnel.

-9-･

The Company obtains the consent of the
Audit & Supervisory Committee with respect
to appointment, transfer and compensation ofsuch personnel assisting with the Audit &Supervisory Committee･

Audit & Supervisory Committee Secretariat
is a full-time system and has no concurrent
staff.

(6) System for reporting to the Audit & Supervisory Committee◇
1)

Systems
Officers and employees of the Group shallperiodically report the performance of theirduties to the Audit & Supervisory Committeeof the Company and provide Audit andSupervisory Committee members with
opportunities to attend important meetings.

2)

Officers and employees of the Group shallimmediately report to the Audit &Supervisory Committee of the Company
when a risk affecting their management or
performance occurs or when they becomeaware of a fact that constitutes a material
breach of compliance with respect to the
conduct of their business activities.
The Group shall not treat any officers or
employees unfavorably for the reason of
making a report under the preceding two
items.

3)◇ Outline of Operational Status･
Audit & Supervisory Committee receives
reports on the status of the execution ofduties from the CEO and executive officers,etc. on a regular and occasional basis. In
addition, Audit & Supervisory Committee
Members attend important meetings such as
the Board of Directors, the Management
Committee, and meetings for performance
reporting, and conduct investigations andinterviews with each division and exchange
opinions with Directors of the Company.
･

Officers and employees of the Group
immediately report to the Audit &Supervisory Committee of the Company
when a risk affecting their management or
performance occurs or when they becomeaware of a fact that constitutes a material
breach of compliance with respect to the
conduct of their business activities.

･

The Group does not treat its officers andemployees who report to the Audit &Supervisory Committee unfavorably for thereason of having made a report under thepreceding two items.

(7) Other Systems for Ensuring Effectiveness of Audit by Audit & Supervisory Committee◇
1)

Systems
Officers and employees of the Group shallexchange information with the Audit andSupervisory Committee upon request fromthe Audit and Supervisory Committee.

2)

The Audit Department shall regularly report
the status and results of audits to the Audit
and Supervisory Committee. The Audit andSupervisory
Committee
may
give
instructions to the Audit Department as
necessary.

3)

The Audit and Supervisory Committee shallreceive reports from accounting auditors onplans and results of accounting audits fromtime to time, and periodically exchange
information with accounting auditors.

4)

Expenses incurred in the performance of theduties of the Audit & Supervisory
Committee of the Company shall be inaccordance with Article 399-2, Paragraph 4of the Companies Act, and the Company
shall establish procedures for the requests inthe same paragraph.

◇ Outline of Operational Status･
Officers and employees of the Groupexchange information with the Audit &Supervisory Committee upon request fromthe Audit & Supervisory Committee.

- 10 -･

The Audit & Supervisory Committee works
closely with the Internal Audit Department,
which is the internal audit division, toimprove effectiveness and efficiency ofaudits by exchanging information andopinions with each other on a regular basis
and when necessary.

･

The Audit & Supervisory Committee
receives periodic and occasional reports fromaccounting
auditors
andexchanges
information and opinions.

･

Expenses of the Audit & Supervisory
Committee are properly settled in response torequests from Audit & Supervisory
Committee Members.

Consolidated Statement of Changes in Net Assets (April 1, 2023 to March 31, 2024)(Million yen)
Shareholders’ equity
Commonstock
Balance as of April 1, 2023

Deposits forsubscriptionsof shares

CapitalsurplusRetainedearnings

30,200-30,200

2,456

85

2,456

48,630Total
shareholders’equityTreasurystock-

109,030

Changes during the fiscal year
Issuance of new shares

4,997

Dividends of surplus(11,160)(11,160)

Profit attributable to owners ofparent26,134

26,134

Acquisition of treasury stock(3)

Net changes in items other thanthose in shareholders’ equity
during the fiscal year

(3)-

Total changes during the fiscal
year

2,456

85

2,456

14,974(3)

19,968

Balance as of March 31, 2024

32,65685

32,656

63,604(3)

128,998

Accumulated othercomprehensive income
Total
Foreignaccumulated
currency
othertranslation
comprehensive
adjustments
incomeSharesubscription
rightsBalance as of April 1, 2023

822

822

Total net
assets12

109,864

Changes during the fiscal year
Issuance of new shares

4,997

Dividends of surplus(11,160)

Profit attributable to owners ofparent26,134

Acquisition of treasury stock
Net changes in items other thanthose in shareholders’ equity
during the fiscal year
Total changes during the fiscal
year
Balance as of March 31, 2024

(3)
1,200

1,200

(12)

1,188

1,200

1,200

(12)

21,156

2,022

2,022

-

131,020(Note) Monetary amounts are rounded to the nearest million yen.

- 11 -

Notes to the Consolidated Financial Statements
1.

Note to the Significant Matters as the Basis for the Preparation of the Consolidated Financial
Statements
Consolidated Financial statements are prepared in accordance with the Regulations on Corporate Accounting(Ministry of Justice Order No. 13 of February 7, 2006, as last amended Ministry of Justice Order No. 12 ofMarch 27, 2024).
(1)
Scope of Consolidation
Number of consolidated subsidiaries and names of consolidated subsidiaries
The consolidated financial statements consolidate all six subsidiaries.
(Names of consolidated subsidiaries)
Socionext America Inc.
Socionext Europe GmbH
Socionext Technology Pacific Asia Ltd.
Socionext Technology(Shanghai)Co., Ltd.
Socionext Taiwan Inc.
Socionext Korea Ltd.
(2)
Application of equity method
Number and names of affiliates accounted for by the equity method(Affiliate)
Trinity Semiconductor Research LLC(3)
Fiscal years and other matters of consolidated subsidiaries
Among the consolidated subsidiaries, Socionext Technology (Shanghai) Co., Ltd., whose account closing dateis December 31, has been consolidated using the financial statements provisionally closed as of the closing
date of the consolidated financial statements.
(4)
Accounting Policies
1)
Basis and method for valuation of assetsa.
Securities
Other securities:*
Other than stocks with no market valueMarket value method based on market prices as of the
fiscal year-end
Method of processing the difference between acquisition
cost and market value... All changes in unrealized holding
gain or loss, net of the applicable income taxes, areincluded directly in net assets
Method of determining cost of sale at time of sale... Cost
method using moving average method*
Stocks etc. with no market value
Cost method using the moving average methodb.
Derivatives
Market valuec.
Inventories
Inventories held for ordinary sale*
Finished goods
Cost method using the gross average method*
Work in process
Cost method using the gross average method
Inventories with reduced profitability have been written down in book value.
2)
Methods of depreciation and amortization for non-current assetsa.
Property, plant and equipment (excluding leased assets)
Depreciation is calculated by the straight-line method.
The useful lives are estimated as follows, reflecting the collection period according to the actual situation.
Buildings and structures, net
2 to 20 years
Machinery and equipment, net
3 to 5 years
Tools, furniture and fixtures
3 to 10 yearsb.
Intangible assets
Depreciation is calculated by the straight-line method.
Among all, technology assets and internal-use software are amortized using the straight-line method over their- 12 -

estimated useful lives (up to five years) for internal use.
c.
Leased assets
Leased assets under finance leases that do not transfer ownership of the leased assets are calculated using thestraight-line method with the lease term as the useful life and a residual value of zero.
3)
Basis of recording revenues and expenses
With respect to the sale of semiconductor products, the Company recognizes revenue at the time of delivery of
the product (or at the time of deemed arrival of the product if the lead time of transportation can be measured)
because the Company judges that the Company’s performance obligation is fulfilled when the customer gains
control over the product at the time of delivery of the product.
2.
Notes to Changes in Presentation Methods
Interest income, which was included in “Other income” of Non-operating income in the previous fiscal year
(141 million yen in the previous fiscal year), is presented as “Interest income” in the current consolidated
fiscal year due to its increased materiality.
3.
Notes on recognition of revenues(1)
Detailed information of revenues from contracts with customers
Net sales of finished goods
NRE Sales
Other
Revenues from contracts with customers
Sales to external customers

182,876 million yen
37,609 million yen
761 million yen
221,246 million yen
221,246 million yen(2)
Information that is the basis for understanding the revenues generated by contracts with customers
The Group Company is engaged in research, design and development, manufacturing, sales and service ofsemiconductor products, with revenues primarily from the sales of semiconductor products.
With respect to product sales, we recognize revenues when control of the product is transferred to thecustomer, that is, when the product is delivered to the customer, the legal ownership, physical possession andsignificant risks and economic value associated with the ownership of the product are transferred to thecustomer, and we gain the right to receive payment from the customer.
With respect to NRE sales, we recognize revenue when the products developed are delivered to the customer
and the customer confirms receipt and evaluation of the deliverables, as significant risk and economic value
are transferred to the customer and we gain the right to receive payment from the customer.
Revenues from these product sales and NRE sales are measured at transaction prices associated with thecontract with customers.
The consideration for the transaction is received within one year after the fulfillment of the performanceobligation and does not include any material financial factor.
(3)
Information on the relationship between fulfillment of performance obligations under contracts withcustomers and cash flows arising from such contracts, and the amount and timing of revenues expected to berecognized in the following fiscal year and thereafter from contracts with customers existing at the end of the
fiscal year under review
1)Balance of contract assets and contract liabilities
Balance as of April 1, 2023
Balance as of March 31, 2024
Contract liabilities
824 million yen
504 million yen
Contract liabilities primarily relate to advances received under contracts with customers before fulfilling
performance obligations. Contract liabilities are reversed as revenues are recognized. Contract liabilities areincluded in “Other” in the consolidated balance sheet.
2)
Transaction price allocated to the outstanding performance obligation
Statement of the Group’s transaction price allocated to the outstanding performance obligation is omitted due
to practical expedients as there is no material contract with a duration of more than one year that is initiallyestimated.

- 13 -

4.
Notes on Accounting Estimates
Items whose amounts are recorded in the consolidated financial statements for the fiscal year under review
based on accounting estimates and which may have a material impact on the consolidated financial statements
for the following fiscal year are as follows:* Recoverability of deferred tax assets(1)

Amount recorded in the consolidated financial statements for the fiscal year under review
Deferred tax assets 6,740 million yen(2)
Information on the content of significant accounting estimates for identified items
Deferred tax assets are recognized only for tax credits and deductible temporary differences that are more
likely to be applicable to future taxable income. The timing and amount of taxable income may be affected by
future changes in uncertain economic conditions, and if the timing and amount of taxable income differ fromthe estimates, it may have a material impact on the amount recognized in the consolidated financial statements
for the following fiscal year and thereafter.
5.
*

Notes to the Consolidated Balance Sheet
Accumulated Depreciation of Property, Plant and Equipment
Buildings and structures, net
Machinery and equipment, net
Tools, furniture and fixtures
Total

6.
(1)

2,910 million yen
102 million yen
33,879 million yen
36,891 million yen

Notes to Consolidated Statement of Changes in Net Assets
Type and total number of issued shares at the end of the fiscal year under review
Common stock
178,687,405 shares(2)

Number of shares in terms of treasury stock at the end of the fiscal year under review
Common stock
788 shares(3)

Matters related to dividends of surplus for the fiscal year under review

Date of resolution

Type ofshares

Source ofdividend

Total amount Amount ofof dividend dividend per Record date(million yen) share (yen)Date to come into
effectMay 19, 2023
Common Retained
March 31,
Board of Directors
7,070
210
June 7, 2023
stock
earnings2023
meetings
October 31, 2023
Common Retained
September 30,
Board of Directors
4,090
115
November 28, 2023
stock
earnings2023
meetings(Note) The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares.
The amount of dividend per share is the amount before the stock split.
(4)

Matters related to dividends of surplus distributed after the end of the fiscal year under review
Total amount Per share
Type of Source ofDate to come into
Resolution scheduleof dividend
Dividend Record datesharesdividend
effect(Million yen)
(Yen)
May 17, 2024
Common Retained
March 31,
Board of Directors
4,467
25
June 5, 2024
stock
earnings2024
meetings(5)
Type and number of shares subject to share subscription rights (excluding those for which the firstday of the exercise period has not yet arrived) at the end of the fiscal year under review
Common stock
2,634,350 shares- 14 -

7.
Notes on Financial Instruments(1)
Matters concerning financial instruments
1)
Policy for financial instruments
The Group Company invests in financial assets with a higher degree of safety after securing the liquidity
necessary for its business activities.
Our policy is to use derivatives to avoid the risk of foreign exchange fluctuations in trade receivables andpayables and not to engage in speculative transactions.
2)
Details of financial instruments and related risks
Accounts receivable-trade, our trade receivables, are exposed to customer credit risk. In addition, someforeign currency-denominated trade receivables are exposed to foreign exchange risk, but except for those notexceeding the balance of the same foreign currency-denominated accounts payable-trade, we hedge themusing forward foreign exchange contracts.
Accounts payable-trade, our trade payables, are mostly due within two months. Certain foreign currencydenominated balances are exposed to foreign exchange risk, but are continuously within the range of the same
foreign currency-denominated accounts receivable balance.
3)
Risk management system relating to financial instrumentsa.
Management of credit risk (default risk of customers)
In accordance with the receivables management rules, the Company regularly monitors the businessconditions of its business partners and manages the due dates and balances of each partner in order to identify
concerns for collection at an early stage and mitigate risks.
b.
Management of market risks (fluctuation risks in foreign exchange rates, interest rates, etc.)
The Company uses forward foreign exchange contracts to hedge foreign currency-denominated tradereceivables and payables against the fluctuation risks in foreign exchange that are managed by currency andby due dates.
c.
Management of liquidity risk in financing activities (our payment default risk)
In the Company, a department in charge prepares and updates cash flow plans in a timely manner based onreports from each department, and manages risks by maintaining liquidity on hand.
4)
Supplementary explanation of matters relating to fair value of financial instruments
As fair value measurement of financial instruments incorporates variable factors, adopting different
assumptions could result in different values.
(2)
Fair value of financial instruments“Cash on hand and in banks” is omitted because it is cash, and the market values of “Deposits,” “Accounts
receivable-trade,” “Accounts receivable-other,” “Accounts payable-trade,” “Accounts payable-other,” and“Accrued expenses” are omitted too, as they are close to their book values, being settled in a short period of
time.
(3)
1)
2)

Items related to breakdown by level of market value of financial instruments
Financial instruments which are reported at market value on the consolidated balance sheet
Not applicable
Financial instruments which are not reported at market value on the consolidated balance sheet
Descriptions are omitted due to lack of significance.

8.
Notes to Per-share Information(1)
Net assets per share
732.76 yen(2)Profit per share for the fiscal year under review
148.39 yen
The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. Profit
per share is computed based on the assumption that the stock split was implemented at the beginning of the
fiscal year under review.

- 15 -

Non-Consolidated Statement of Changes in Net Assets (April 1, 2023 to March 31, 2024)(Million yen)
Shareholders’ equity
Capital surplus
Deposits for
Common stock subscriptions ofsharesBalance as of April 1, 2023

Legal capitalsurplusRetained earnings

Total capitalsurplus30,200-30,20030,200

2,456

85

2,456

2,456

Other retained
earnings
Retainedearnings brought
forward

Total retained
earnings

42,93942,939Dividends of surplus(11,160)(11,160)

Profit26,311

26,311

Changes during the fiscal year
Issuance of new shares

Acquisition of treasury stock
Net changes in items other thanthose in shareholders’ equity
during the fiscal year
Total changes during the fiscal year

2,456

85

2,456

2,456

15,151

15,151

Balance as of March 31, 2024

32,65685

32,65632,65658,09058,090Shareholders’ equity
Treasury stock
Balance as of April 1, 2023

-

Share
subscription
rightsTotalshareholders’equity103,339

Total net assets

12

103,351

Changes during the fiscal year
Issuance of new shares

4,997

4,997

Dividends of surplus(11,160)(11,160)

Profit26,311

26,311(2)(2)

Acquisition of treasury stock(2)

Net changes in items other thanthose in shareholders’ equity
during the fiscal year

-

(12)

(12)

Total changes during the fiscal year(2)

20,146(12)

20,134

Balance as of March 31, 2024

(2)

123,485-

123,485(Note) Monetary amounts are rounded down to the nearest million yen.

- 16 -

Notes to the Non-consolidated Financial Statements
1.
Notes to Significant Accounting Policies(1) Non-consolidated financial statements are prepared in accordance with the Regulations on Corporate
Accounting (Ministry of Justice Order No. 13 of February 7, 2006, as last amended Ministry of Justice
Order No. 12 of March 27, 2024).
(2) Basis and method for valuation of assets
1) Securities
a. Shares of subsidiaries and affiliates: Cost method using the moving-average methodb. Other securities:* Other than stocks with no market valueMarket value method based on market prices as of the fiscal
year-end
Method of processing the difference between acquisition costand market value... All changes in unrealized holding gain or
loss, net of the applicable income taxes, are included directlyin net assets
Method of determining cost of sale at time of sale... Cost
method using moving average method* Stocks etc. with no market value
Cost method using the moving average method
2)*

Derivatives, etc.
Derivatives

3)

Inventories
Inventories held for ordinary sale
Finished goods
Cost method using the gross average method
Work in process
Cost method using the gross average method
Inventories with reduced profitability have been written down in book value.

**

Market value(3) Methods of depreciation and amortization for non-current assets
1) Property, plant and equipment (excluding leased assets)
Depreciation is calculated by the straight-line method.
The useful lives are estimated as follows, reflecting the collection period according to the actual situation.
Buildings and structures, net
3 to 20 years
Machinery and equipment, net
3 to 5 years
Tools, furniture and fixtures
3 to 10 years
2) Intangible assets
Depreciation is calculated by the straight-line method.
Among all, technology assets and internal-use software are amortized using the straight-line method over theirestimated useful lives (up to five years) for internal use.
3) Leased assets
Leased assets under finance leases that do not transfer ownership of the leased assets are calculated using thestraight-line method with the lease term as the useful life and a residual value of zero.
(4) Basis of recording revenues and expenses
With respect to the sale of semiconductor products, the Company recognizes the revenue at the time of deliveryof the product (or at the time of deemed arrival of the product if the lead time of transportation can be measured)
because the Company judges that the Company’s performance obligation is fulfilled when the customer gains
control over the product at the time of delivery of the product.

- 17 -

2.
Notes on Accounting Estimates
Items whose amounts are recorded in the non-consolidated financial statements for the fiscal year under review
based on accounting estimates and which may have a material impact on the non-consolidated financial
statements for the following fiscal year are as follows:* Recoverability of deferred tax assets(1) Amount recorded in the non-consolidated financial statements for the fiscal year under review
Deferred tax assets
6,551 million yen(2) Information on the content of significant accounting estimates for identified items
Deferred tax assets are recognized only for tax credits and deductible temporary differences that are more likely
to be applicable to future taxable income. The timing and amount of taxable income may be affected by futurechanges in uncertain economic conditions, and if the timing and amount of taxable income differ from theestimates, it may have a material impact on the amount recognized in the non-consolidated financial statements
for the following fiscal year and thereafter.
3.
Notes to the Non-consolidated Statement of Financial Position(1) Accumulated Depreciation of Property, Plant and Equipment
Buildings and structures, net
1,842 million yen
Machinery and equipment, net
68 million yen
Tools, furniture and fixtures
32,090 million yen
Total
34,001 million yen(2) Monetary receivables from and monetary payables to the affiliates
Short-term monetary receivables
22,995 million yen
Short-term monetary payables
1,184 million yen
4.

5.

Notes to Non-consolidated Statement of Income
Transaction with the affiliates
Operating transactions
Net sales
Purchases
Non-operating transactions
Dividend income
Asset Purchases

131,314 million yen
14,666 million yen
1,345 million yen
16 million yen

Notes to Non-consolidated Statement of Changes in Net Assets
Number of treasury stock at the end of the fiscal
year under review
Common stock- 18 -

788 shares

6.

Notes to Tax-Effect Accounting
Breakdown of Major Factors for Deferred Tax Assets and Deferred Tax Liabilities
Deferred tax assets
Provision for bonus
1,355 million yen
Accrued social insurance expenses
202 million yen
Loss on valuation of inventories
2,785 million yen
Loss on valuation of non-current assets
1,104 million yen
Accrued enterprise taxes
686 million yen
Lump-sum depreciable assets
88 million yen
Asset retirement obligations
169 million yen
Loss on valuation of investment securities
68 million yen
Other
204 million yen
Subtotal of deferred tax assets
6,666 million yen
Valuation allowance(68) million yen
Total deferred tax assets
6,597 million yen
Deferred tax liabilities
Asset retirement obligations(46) million yen
Total deferred tax liabilities(46) million yen
Deferred tax assets, net
6,551 million yen- 19 -

7.

Notes to Transaction with Related Parties

Type

Subsidiaries

Subsidiaries

Officer

Officer

Officer

Officer

OfficerName ofcompanies andothersSocionext
Technology
Pacific Asia Ltd.

Socionext America
Inc.

Masahiro Koezuka

Koichi Otsuki

Noriaki Kubo

Yutaka Yoneyama

Hisato Yoshida

Percentage ofvoting rights held(owned)Ownership
Direct 100.0%

Ownership
Direct 100.0%

Direct 0.0%

Direct 0.0%

Direct 0.0%

Direct 0.0%

Direct 0.0%

Relationshipwith relatedparties

Sales of theCompany’s
products andoutsourcing ofoperations, etc.

Sales of theCompany’s
products andoutsourcing ofoperations, etc.

Director

Director

Director

Director

Director

Balance asof March
31, 2024(Millionyen)

Details oftransactions

Transactio
n amount(Millionyen)

Sales ofproducts, etc.

87,014

Accounts
receivabletrade, net

15,252

Outsourcing ofoperations, etc.

797

Accounts
receivableother

209

Sales support,
etc.

3,480

Accounts
payabletrade

346

Sales ofproducts, etc.

33,038

Accounts
receivabletrade, net

5,802

Outsourcing ofoperations, etc.

-

Accounts
receivableother5

Outsourcing ofdevelopment,
etc.

6,694

Accounts
payabletrade383

Exercise of shareacquisition rights(Note 2)23--

In-kindcontribution ofmonetary
compensation
claims (Note 3)

23

Exercise of shareacquisition rights(Note 2)22--

In-kindcontribution ofmonetary
compensation
claims (Note 3)

16

Exercise of shareacquisition rights(Note 2)22--

In-kindcontribution ofmonetary
compensation
claims (Note 3)

16

In-kindcontribution ofmonetary
compensation
claims (Note 3)

10

-

-

In-kindcontribution ofmonetary
compensation
claims (Note 3)

10

-

-

Item

Notes: 1. Prices, among the transaction terms with the aforementioned companies, are established throughnegotiations, following the same procedures with other entities.
2. Exercising of share acquisition rights, which are granted pursuant to a resolution of the Board of
Directors, during the fiscal year under review is shown.
The transaction amount indicates the amount paid by means of the exercising of share acquisitionrights during the fiscal year under review.
3. This is due to an in-kind contribution of monetary compensation claims associated with theperformance-based restricted stock compensation system.

- 20 -

8.
(1)
(2)

Notes to Per-share Information
Net assets per share
Profit per share for the fiscal year under review

690.60 yen
149.40 yen

The Company implemented a stock split on January 1, 2024 at a ratio of 1 common stock to 5 shares. Profit per
share is computed based on the assumption that the stock split was implemented at the beginning of the fiscal
year under review.

- 21 -