Kaga Electronics Co., Ltd.
and Consolidated Subsidiaries
Consolidated Financial Statements for theYear Ended March 31, 2022
and Independent Auditor’s ReportIndependent Auditor’s Report
To the Board of Directors of Kaga Electronics Co., Ltd.
OpinionWe have audited the consolidated financial statements of Kaga Electronics Co., Ltd. and its
subsidiaries (the “Group” or the “Company”), which comprise the consolidated statement of financial
position as of March 31, 2022, and the consolidated statement of income and comprehensive income,the consolidated statement of changes in net assets and the consolidated statement of cash flows forthe year then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as of March 31, 2022, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressedin the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers Aarata LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assuranceValuation of inventories related to transactions with EuroTec Japan, Inc. and estimation of allowancefor doubtful accounts(Notes to consolidated financial statements, 2.r. Significant Accounting Estimates)(Notes to consolidated financial statements, 4. Consolidated statement of income and comprehensive
income)Key audit matter description
How our audit addressed the key audit matter
As of March 31, 2022, the Company recorded
In order to evaluate the valuation of inventory for
inventory transactions with EuroTec Japan, Inc.
transactions from EuroTec and the estimated(“EuroTec”) related to the rotorcraft business ofallowance for doubtful accounts related to2,243 million yen (0.8% of total consolidated
receivables due from EuroTec, we performed theassets) and loss on valuation of inventory of 1,809 following principal audit procedures:
million yen on the consolidated balance sheet.
The Company has also recorded allowance for•
We obtained an understanding, evaluated the
doubtful accounts of 1,868 million yen against thedesign and implementation and tested theoutstanding receivables balance of 2,256 million
operating effectiveness of internal controls
yen (0.8% of total consolidated assets) related torelated to the valuation of inventory for
EuroTec.
rotorcrafts and the estimated allowance for
doubtful accounts.
The Company writes down the carrying value of•In order to evaluate the net selling price of
inventory when the net realizable value is lessrotorcrafts and the estimated amount ofthan its cost. EuroTec is undergoing legal
expected uncollectible receivables, we
proceedings under the Civil Rehabilitation Act,
performed the following principal audit
and sales orders previously placed by a customer
procedures:
were cancelled. The Company’s inventories for- We evaluated the competency of external
which the sales orders were cancelled wereappraisers used by management.
evaluated at net realizable value based on
We reviewed the appraisal reports usedappraised value that the appraiser calculates
by management to value the cancelled
under the market approach. For inventories
inventory transactions, and assessed thewithout any cancellation, net realizable value isinputs to appraisal value, the valuation
calculated based on the amount as stated inmethod used, and the process of its
contracts and the future cash flows of Euro Tec.
determination.
We compared the estimate of future
The Company recorded the estimateddemand and market trends for theuncollectible amount for EuroTec as allowance forrotorcrafts to the market distribution,
doubtful accounts using the financial condition
price trend of the pre-owned market
evaluation method.
using used-aircraft market price data
including rotorcrafts, and sales in the
The Company determined the net realizable value
pre-owned aircraft market.
of inventories and the estimated amount of bad- We inquired of the sales and corporate
debt by taking into consideration the futureplanning departments regarding thedemand forecast for rotorcraft, market trends,
delivery plan of the specific rotorcrafts
EuroTec's proposed business plan, and future
for EuroTec and confirmed that the plan
cash flow projections. These estimates are subject
was reported to the Board of Directors.
to a high degree of uncertainty, and may be- To evaluate the calculation of the net
subject to significant management judgment.
selling price of inventory and theTherefore, we determined that the matter is a key
estimated uncollectible receivables, we
audit matter.
compared the estimated selling price ofthe specific rotorcrafts for end
customers, which will be used for debt
payment, to the available information,
including the EuroTec’s business planand the prospective cash flows.

2 of 6

Valuation of unlisted securities shares including venture capital investments(Notes to consolidated financial statements, 2.r Significant Accounting Estimates)
Key audit matter description
How our audit addressed the key audit matter
The Group invests in newly formed companies in
In order to evaluate the investment securities
growth markets such as electronic devices forincluding unlisted securities, we performed thevehicles, environmentally friendly technology
following principal audit procedures:
solutions, communications and new markets suchas medical/healthcare to generate innovation.
•
We obtained an understanding, evaluated thedesign and implementation and tested the
As of March 31, 2022, the Group has recorded
operating effectiveness of internal controls
investment securities including unlisted securities
related to the process of the valuation ofof 1,179 million yen (0.4% of total consolidated
investments in venture companies including
assets) on the consolidated balance sheet, and a
the valuation loss of the excess earning
loss on valuation of investment securities of 260
capacity.
million yen (1.2% of income before income tax) on •We inquired of officers and management of
the consolidated statements of income andthe Company regarding the assessment
comprehensive income.
process of investments in venture companies
at the time of acquisition and the most recent
With respect to unlisted securities, investments infinancial status and operating results. We
venture companies may be acquired at a higher
inspected the results of the analysis
price than the net asset value, reflecting the future
conducted by the Company on future
economic benefits arising from the investee's
business environment forecasts and otheroperations. The recent performance of thefactors. In addition, we inquired about theinvestee is compared to the medium-to-long term
impact on the valuation of securities due tobusiness plan obtained at the time of acquisition.
estimates of the excess earning capacity of
If the projected future economic benefits haveinvestee companies.
significantly declined and are no longer expected•
In terms of stocks whose net asset value wasto be realized, a valuation loss is recorded. The
significantly lower than the acquisition cost,
Company and its consolidated subsidiaries
determined based on the most recent
recognize valuation losses only when the actual
financial information, we compared thevalue of the assets has declined significantly.
preliminary business plan and actual results,
and determined whether it was temporary
The assumptions used in the assessment ofthat the actual amount was less than theinvestment securities include unlisted securities
preliminary business plan. In addition, we
shares that involve management's judgment andverified whether the net asset value,
because of the high degree of estimationreflecting the excess earning capacity, has
uncertainty and the quantitative significance of
substantially decreased.
the investment securities balance, judgment is•
We obtained the assessment prepared byrequired for the evaluation. Therefore, wemanagement and considered whether thedetermined that this matter is a key audit matter.
Company should recognize any impairment.
In addition, we compared the forecasted
financial projections developed by theinvestees' management to the valuation of
the investments.
•
We inspected the evidence related to thevalue at the acquisition to verify the accuracyof the acquisition cost.

3 of 6Other Information
The other information comprises the information included in a document containing audited
consolidated financial statements, but does not include the consolidated financial statements and our
auditor’s report thereon. We have determined that there is no other information and thus have not
performed any work on other information.
Responsibilities of Management and Those Charged with Governance for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as applicable, matters related to going
concern.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that an audit conducted in accordance with auditing standards generally accepted inJapan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the consolidated
financial statement audit is not to express an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s

4 of 6

report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
• Evaluate whether the presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Convenience translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2022 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 1 to the consolidated financial statements.

5 of 6

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

Kensuke Koda
Designated Engagement Partner
Certified Public Accountant

Masaki Nitta
Designated Engagement Partner
Certified Public Accountant

PricewaterhouseCoopers Aarata LLC
September 9, 2022

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

6 of 6

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2022

Millions of Yen
2021
2022

Thousands of
U.S. Dollars(Note 1)
2022

45,636
103,773
4,621
302
29,727
1,280
6,940
9,921
(2,024)200,179

41,051
1,449
9,258
110,240
264
46,2302,363
14,0139,388(275)
233,984$ 355,415
11,84375,643
900,735
2,159
377,734
19,308114,496
76,712(2,252)
1,911,797

14,327(7,305)
7,021

15,033(8,108)
6,925

122,835(66,250)
56,584

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

11,496(6,853)
4,642

14,181(8,132)
6,048

115,868(66,445)
49,423Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

5,632(4,254)
1,378

5,697
(4,667)1,030

46,553(38,133)
8,420

Land
Construction in progress
Total PROPERTY, PLANT AND EQUIPMENT

5,074
107
18,2255,074
313
19,393

41,462
2,563
158,454

209
2,338
62
2,609

98
3,021
42
3,163

807
24,686349
25,843

10,771
2,252
931
910
1,629
(504)
15,990

10,313
2,189
1,068
915
3,466
(2,355)
15,59884,26817,8908,732
7,478
28,325(19,244)
127,450ASSETS
CURRENT ASSETS:
Cash and bank deposits
Notes and accounts receivable - trade
Notes receivable - trade
Electronically recorded monetary claims
Accounts receivable - trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total CURRENT ASSETS¥NONCURRENT ASSETS:PROPERTY, PLANT AND EQUIPMENT
Buildings and structures
Accumulated depreciation
Buildings and structures, net

INTANGIBLE ASSETS
Goodwill
Software
OthersTotal INTANGIBLE ASSETSINVESTMENTS AND OTHER ASSETS:
Investment securities ※1
Deferred tax assets
Guarantee deposits
Insurance funds
OthersAllowance for doubtful accounts
Total INVESTMENTS AND OTHER ASSETS-1-¥

Total NONCURRENT ASSETS
Total ASSETS

36,825

38,155

311,749¥ 237,004¥ 272,139$ 2,223,547

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2022

Millions of Yen
2021
2022

LIABILITIESThousands of
U.S. Dollars(Note 1)
2022

CURRENT LIABILITIES:
Notes and accounts payable - trade
Short-term loans payable
Accrued expenses
Income taxes payable
Provision for directors' bonuses
Others ※2
Total CURRENT LIABILITIES¥ 79,854
10,800
5,957
2,136
126
9,642
108,517¥ 86,493
23,858
7,138
2,834
301
12,291
132,918$ 706,707
194,939
58,324
23,162
2,464
100,425
1,086,023

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

25,166
1,685
106
2,272
343
3,850
33,42425,136
2,046
123
2,095
572
3,446
33,421

205,382
16,722
1,006
17,117
4,678
28,164
273,071

141,942

166,339

1,359,094

NET ASSETS:SHAREHOLDERS’ EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total SHAREHOLDERS’ EQUITY

12,133
14,32764,568(1,984)89,045

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

99,138121,072
632,597(46,107)806,700

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

1,378
50
470
21
1,921

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

10,618(20)
44,447
1,723
56,7694,095
95,062

120
105,800

981
864,452

Total LIABILITIES AND NET ASSETS¥ 237,004
The accompanying notes are an integral part of these financial statements.

¥ 272,139$ 2,223,547

Total LIABILITIES

Non-controlling interests
Total NET ASSETS-2-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2022

Millions of Yen
2021
2022

Thousands of
U.S. Dollars(Note 1)2022

¥ 422,365
374,428
47,936¥ 495,827
435,280
60,547$ 4,051,210
3,556,500
494,710

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

36,46911,467

39,632
20,915323,817
170,893

NON-OPERATING INCOME
Interest income
Dividend income
Commission fee
Foreign exchange gains
House rent income
OthersTotal NON-OPERATING INCOME

135
197
168
116
539
1,158

135
195
183
252
104
572
1,443

1,105
1,594
1,502
2,063
851
4,678
11,795

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

317
627
359
80
1,384
11,241

315
472
114
902
21,456

2,580
3,864
932
7,377
175,311EXTRAORDINARY INCOME
Gain on sales of property, plant and equipment ※5
Gain on sales of investment securities
Gain on bargain purchase
Gain on transfer of business
Gain on reversal of estimated loss of funds from U.S. subsidiary
OthersTotal EXTRAORDINARY INCOME

2
128
7,963
7
20
8,122

15
363
7
176
34
596

123
2,967
57
1,443
285
4,877

1,893
101
36
525
24
1,750
480
78
¥ 4,892

93
13
2
260
175
129
29
¥ 705

761
113
20
2,130
1,430
1,060
244
$ 5,761

Net sales ※1
Cost of sales ※2, 4
Gross profit

EXTRAORDINARY LOSS
Impairment loss ※7
Loss on disposal of property, plant and equipment ※6
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on liquidation of subsidiaries and associates
Special retirement expenses
Provision of allowance for doubtful accounts
Estimated loss of funds from U.S. subsidiary
OthersTotal EXTRAORDINARY LOSS

-3-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2022
Thousands of
U.S. Dollars(Note 1)
2022

Millions of Yen
2021
2022
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Profit attributable to owners of the parent
Profit attributable to non-controlling interests
OTHER COMPREHENSIVE INCOME
Changes in the fair value of available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit obligations, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total OTHER COMPREHENSIVE INCOME ※5
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥ 14,472¥ 21,348$ 174,427

3,207
(51)
3,156
11,315

5,071
606
5,678
15,66941,4384,956
46,395
128,031

11,399(84)

15,401
268

125,841
2,190

1,376
22
1,218
138

(78)
(52)
4,922
188

(640)
(432)
40,220
1,541

42

95

780

2,799

5,075

41,470¥ 14,114¥ 20,745$ 169,502¥ 14,10113¥ 20,428
316$ 166,912
2,589

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

-4-Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2022
Fiscal year ended March 31, 2021
Millions of Yen
Shareholders’ equity
Capital stock

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

¥

Capital surplus

12,133Retained earnings¥ 13,878

Total shareholders’equityTreasury stock¥ 55,091¥(2,005)¥(1,922)(1,922)

11,39911,399
(1)
31

(1)
22

8

441

¥

－
12,133449¥ 14,327

79,097441

9,477¥ 64,568¥

21(1,984)¥

9,948
89,045

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

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

0

Deferred
gains orlosses onhedges¥Foreigncurrencytranslation
adjustment28¥ (707)

Remeasurement ofdefinedbenefitobligations¥ (133 )Total
accumulated
othercomprehen-sive income

Noncontrollinginterests¥ (812) ¥ 7,965

Total net
assets¥ 86,250(1,922)
11,399
(1)
31

441
1,378
1,378
1,378

¥

22

1,178

22
50

1,178
¥ 470

-5 -

154

¥

154
21

2,733

(3,869)(1,135)

2,733(3,869)8,812¥ 1,921 ¥ 4,095 ¥ 95,062

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

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

¥

Capital surplus

Retained earnings

12,133¥ 14,327¥ 64,568

12,133

14,327

7
64,576

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

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

15,401

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

8

481

¥

－
12,133490¥ 14,818

89,045481

12,847¥ 77,423¥(3,658)(5,643)¥

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

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

1,378

Deferred
gains orlosses onhedges¥1,378

Foreigncurrencytranslation
adjustment

50

¥ 470

50

470

Remeasurement ofdefinedbenefitobligations

¥

21

21

Total
accumulated
othercomprehen-sive income

Noncontrollinginterests

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

1

8
95,071

1,921

4,096

(2,554)
15,401(3,681)
30

481
(79)
(79)
1,299

¥

(53)

4,969

189

5,026

(53)
(2)

4,969
¥ 5,439

189
¥ 210

5,026
¥ 6,948-6 -(3,976)¥

1,050(3,976)
10,728120 ¥ 105,800

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2022
Fiscal year ended March 31, 2022
Thousands of U.S. Dollars (Note 1)
Shareholders’ equity
Balance at the beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

Capital stock

Capital surplus

Retained earnings$

99,138$ 117,066$ 527,565

99,138117,06661
527,627

Total shareholders’equityTreasury stock$(16,213 )$ 727,557(16,213)61
727,618(20,872)(20,872)

125,841

125,841(30,076)253(30,076)
182

71

3,934

$

－
99,1384,005$ 121,072

3,934

104,970$ 632,597$(29,894)(46,107)79,081$ 806,700

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

Balance at the beginning ofcurrent period$ 11,265
Cumulative effects of changes
in accounting policies
Restated balance
11,265
Changes of items during period
Dividends from surplus
Profit attributable to owners of
the parent
Purchase of treasury stock
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders’ equity(647)
Total changes of items
during period(647)

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment$413$ 3,846

413

3,846

Remeasurement ofdefinedbenefitobligations

$

172

172

Total
accumulated
othercomprehen-sive income

Noncontrollinginterests

Total net
assets$ 15,698 $ 33,461 $ 776,712

15,69810
33,472

72
776,790(20,872)
125,841(30,076)
253

3,934
(433)

40,601

1,550

41,071(32,490)

8,580

(433)

40,601

1,550

41,071(32,490)

87,662

Total$ 10,618$ (20) $ 44,447 $ 1,723
The accompanying notes are an integral part of these financial statements.

$ 56,769-7 -$981 $ 864,452

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2022

Millions of Yen
2021
2022
NET CASH PROVIDED BY OPERATING ACTIVITIESIncome before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill(Decrease) Increase in net defined benefit liability(Decrease) Increase in provision for directors' retirement benefits(Decrease) Increase in provision for directors' bonuses
Increase in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of profit of entities accounted for using equity method
Gain on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Gain on sales of investment securities
Loss on valuation of investment securities
Gain on negative goodwill
Gain on reversal of estimated loss of funds from U.S. subsidiary
Estimated loss of funds from U.S. subsidiary(Increase) Decrease in notes and accounts receivable-trade(Increase) Decrease in inventories
Decrease in notes and accounts payable-trade
Increase in accounts receivable-other
Increase in accrued expenses
Decrease (Increase) in advance payments(Increase) Decrease in consumption taxes refund receivable(Increase) Decrease in other current assets
Increase in other current liabilities
Others, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Estimated loss of funds from U.S. subsidiary
Others, net
Net cash provided by (used in) operating activities-8 -¥ 14,472
3,167
1,893
114
(5)
11
25
1,607
(413)
317
627
(0)
101
(92)
525
(7,963)480(4,303)
2,997
1,495
842
(162)
(349)
(164)
(397)
(1,206)130
13,754342(322)(3,295)(480)¥ 9,999¥ 21,348
3,738
93
110
16
16
175
92
(403)
315
472
(14)
13
(360)
260
(187)
(7,889)(22,088)
2,451
583
887
1,349
(822)
(264)
2,030
797
2,723
124
(315)
(4,263)175¥ (1,554)

Thousands of
U.S. Dollars(Note 1)2022

$ 174,427
30,547
761
901
134
137
1,432
756
(3,299)
2,580
3,864
(117)
113
(2,946)2,130(1,534)(64,462)(180,479)
20,033
4,769
7,254
11,023(6,720)(2,161)
16,592
6,515
22,252
1,019(2,578)(34,834)
1,435$ (12,705)

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2022
Thousands of
U.S. Dollars(Note 1)
2022

Millions of Yen
2021
2022
NET CASH USED IN INVESTING ACTIVITIESPayments for time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Proceeds from purchase of shares of subsidiaries resulting in change
in scope of consolidation
Payments of short-term loans receivableCollection of short-term loans receivable
Payments of long-term loans receivable
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash used in investing activities

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

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

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

-9 -

¥

(905)
753
(2,514)28(1,059)(1,688)
723

¥

(856)
474
(3,276)32(1,377)(1,085)834$(6,999)3,873(26,774)265(11,253)(8,865)
6,814

(351)

-

-

2,707

-

-

0
(166)
(11)
58
(77)
63
(100)
87
(2,453)(388)(1,180)
(4)
(28)
65
(174)
194
(6,772)(3,175)(9,642)
(36)
(234)
531
(1,425)
1,590(55,332)(4,608)5,000(1,279)(1)(1,922)

7,636
5,000
(668)
(3,681)(2,551)

62,39340,853(5,463)(30,076)(20,850)(3,441)(3,811)(31,145)(597)(6,851)

(767)
1,155

(6,269)
9,440

945
1,639
42,693¥ 44,333

2,079(5,092)44,333¥ 39,240

16,989(41,608)362,228$ 320,620

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
For the Year Ended March 31, 2022
1.

BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting regulations, and in conformity
with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain
respects as to application and disclosure requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Kaga
Electronics Co., Ltd. (the "Company") is incorporated and operates. Amounts less than ¥1 million have been
omitted. As a result, the total shown in the consolidated financial statements and notes thereto do notnecessarily agree with the sum of the individual account balances. The translations of Japanese yen amounts
into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥122.39 to $1, the rate of exchange at March 31, 2022. Such translations should not be
construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation
The consolidated financial statements include accounts of the Company and all of its subsidiaries (61 in
2021 and 58 in 2022) (together, the "Group").
Under the control and influence concept, those companies in which the Company, directly or indirectly, isable to exercise control over operations are fully consolidated, and those companies over which theCompany has the ability to exercise significant influence are accounted for by the equity method.
There are four equity method affiliates. For those companies accounted for under the equity method
whose fiscal year end date differs from the consolidated fiscal year end date, the financial statements of
those companies for their respective fiscal years are used.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profits and losses included in assets resulting from transactions within the Group is eliminated.
The fiscal year end date of some of the Company's consolidated subsidiaries (21 in 2021 and 19 in 2022) is
December 31. The consolidated financial statements incorporate accounts of these companies withadjustments for significant intercompany transactions arising during the period from January 1 to March
31.

b.

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

c.

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

-10 -

d.

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

e.

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

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

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

g.

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

5 years
3 yearsh.

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

i.

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

j.

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

k.

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

l.

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

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

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

o.

Application of Consolidated Taxation System
The Company has adopted the consolidated taxation system.

p.

Application of tax effect accounting for the transition from the Consolidated Taxation System to theGroup Tax Sharing System
The Company and some of its domestic subsidiaries will transition from the Consolidated Taxation Regime
to the Group Tax Sharing System from the next fiscal year. However, as for the items subject to review inconjunction with the transition to the Group Tax Sharing System and the transition to the Group Tax-12 -Sharing System established in the Act for Partial Revision of the Income Tax Act, etc. (Act No. 8 of 2020),
the provisions in paragraph 44 of ”Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ
Guidance No. 28, February 16, 2018) were not applied, and therefore the amount of deferred tax assets
and deferred tax liabilities were treated in accordance with the provisions of the tax law before the revisionin accordance with paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for theTransition from the Consolidated Taxation System to the Group Tax Sharing System” (PITF No. 39, March
31, 2020). From the beginning of next fiscal year, accounting treatment and disclosure of corporation tax,
local corporation tax and deferred tax accounting are conducted pursuant to “the Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (PTIF No.42, August 12, 2021).
q.

Recognition of significant revenue and expense
The Group consists of four segments, Electronic Components, Information Equipment, Software and other.
The Company and its subsidiaries recognize their revenue when goods are transferred to customers since
the ownership of the good, significant risks and economic values of goods are transferred when goods aretransferred, and performance obligations are satisfied. For the sales of some goods, revenue is recognizedwhen the goods are shipped. For those sales of goods for which the Company or its subsidiaries are
qualified as an agent, the net amount deducting cost from revenue is recognized as revenue. For contracts
with some customers in Information Equipment segment, which include rebates and other variableconsideration, revenue is recognized in the amount of the consideration promised with customers, net ofrebates and other variable consideration. The estimation of rebates is based on past transactions. The
consideration of transactions is received within one year after satisfaction of performance obligations andany significant financing components are not included.

r.

Significant Accounting Estimates
1. Valuation of inventories related to transactions with EuroTec Japan, Inc. and estimation of allowancefor doubtful accounts(1) Amount recorded in the consolidated financial statements for the fiscal years ended
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Inventories
Loss on valuation of inventories
Total receivables
Allowance for doubtful accounts
Provision for allowance for doubtful accounts

¥ 1
4,307
1,750
1,750

¥ 2,243
1,809
2,256
1,868
117

$ 18,332
14,78318,44015,264962(2) Information on the nature of significant accounting estimates for identified items
In previous fiscal year, the Company recorded allowance for doubtful accounts for receivable fromEuro Tec Japan, Inc (“EuroTec”) since receivables for them appeared uncollectible. In this fiscal year,
Euro Tec files for the initiation of civil rehabilitation proceedings. In consideration of thecircumstances, the Company recorded the following accounting estimates for not only receivablesfrom Euro Tec but inventories related to transactions with Euro Tec.
(a) It is necessary to evaluate inventories carefully since that is related to the rotorcraft businessand the number of market participants is limited. EuroTec is undergoing legal proceedings under
the Civil Rehabilitation Act, and sales orders previously placed by a customer were cancelled. The
Company’s inventories for which the sales orders were cancelled were evaluated at net realized
value based on future demand estimates or appraised value that the appraiser calculates under themarket approach. For inventories without any cancellation, net realizable value is calculated basedon the amount as stated in contracts and future cash flows of Euro Tec.
(b) For receivables, the estimated uncollectible amount is recorded as allowance for doubtful
accounts, using cash flow estimation method in previous fiscal year, and using the financial
condition evaluation method in this fiscal year. The estimated uncollectible amount is estimatedunder consideration of their business plan and prospect of their cash flow.
For net realizable value and estimated uncollectible amount, additional loss may occur in the next
fiscal year or after based on rotorcraft business trend, EuroTec’s business plan or their cash flow.
-13 -2. Valuation of unlisted securities shares, including venture capital investments(1) Amount recorded in the consolidated financial statements for this fiscal year

Millions of Yen
2021
2022
Investment securities
Loss on valuation of investment securities¥ 1,367525¥ 1,179
260

Thousands of
U.S. Dollars
2022$ 9,6372,130(2) Information on the nature of significant accounting estimates for identified items
With respect to unlisted securities, the Company calculates the actual value based on the net asset
value per share, based on the latest financial statements available from the investees, and records avaluation loss when the real value has declined significantly. In particular, investments in venturecompanies may be acquired at a higher price than the net asset value, reflecting future economic
benefits arising from the investee’s operations. The recent performance of the investee iscompared to the medium-to-long term business plan obtained at the time of acquisition. If the
projected future economic benefits have significantly declined and are no longer expected to berealized, a valuation loss is recorded. In the event that the actual value considering the reduction inprojected future economic benefits needs to be reviewed due to uncertain future changes in thecorporate environment, etc., additional losses may be incurred in the subsequent consolidated
fiscal year.
s.

Changes in accounting policies(Application of the Accounting Standard for Revenue Recognition)
The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29,
March 31, 2020) effective from the beginning of the consolidated fiscal year ended on March 31, 2022,
and it recognizes revenue as the amount expected to be received in exchange for goods or services whencontrol over the promised goods or services transfers to the customer.
As a result, in the case of a performance obligation in which the promise with the customer involves the
supply of goods or services provided by another party, the net amount received as the agent is recognized
as revenue.
The adoption of the Accounting Standard for Revenue Recognition is in accordance with the transitional
treatment provided in the provision of Paragraph 84 of the Accounting Standard for Revenue Recognition.
The cumulative effect of the retrospective application, assuming the new accounting policy had been
applied to periods prior to the beginning of the consolidated fiscal year ended March 31, 2022, was added
to or subtracted from the balance of retained earnings at the beginning of the consolidated fiscal year
ended March 31, 2022, and thus new accounting policy was applied from the beginning balance of fiscal
year ended March 31, 2022.However, the method provided for Paragraph in 86 of the AccountingStandard for Revenue Recognition was applied so that the new accounting policy was not retrospectively
applied to contracts where recognition of nearly all the revenue amounts for periods prior to thebeginning of the consolidated fiscal year ended on March 31,2022.
Furthermore, “Notes and accounts receivable –trade”, which was presented under “Current assets” in the
consolidated balance sheet for the previous consolidated fiscal year, has been included under ”Notes
receivable – trade” , “Accounts receivable – trade” and others starting from the consolidated fiscal year
ended on March 31,2022. However, in accordance with the transitional treatment provided in Paragraph89-2 of the Accounting Standard for Revenue Recognition, the above financial statement line items for theprevious fiscal year were not reclassified according to the new format.
As a result, compared to the previous method, in the consolidated fiscal year ended on March 31, 2022,
net sales decreased by ¥6,060 million (US$ 49,519 thousands), and the impact on operating income,ordinary income, and profit before income taxes was minimal. The impact of retained earnings on thebalance at the beginning of the period was also minimal.
The impact on per-share information is described in the corresponding section.
In accordance with the transitional treatment provided in Paragraph 89-3 of the Accounting Standard for-14 -Revenue Recognition, notes related to “Accounting Standard for Revenue Recognition” on previous fiscal
year are not included.
(Application of Accounting Standards for Fair Value Measurement)
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.30, July 4 2019) was adopted
from the beginning of this consolidated fiscal year, and in accordance with the transitional treatment set
forth in Article 19 of “Accounting Standard for Fair Value Measurement” and Article 44-2 of “AccountingStandard for Financial Instruments” (ASBJ Statement No.10, July 4, 2019), the Company will continue toapply new accounting policies prescribed by “Accounting Standard for Fair Value Measurement” and otherstandards in the future. The impact of this adoption on these consolidated financial statements isimmaterial.

-15 -

t.

Standards and Guidance not yet adopted
The following standards and guidance were issued but not yet adopted.

・Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance
No.31, June 17, 2021)(1) Overview
When “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No.31, July 4, 2019) was released on July 4 2019, it is stated that examining the “fair value
calculation on investment trust” and “investment in entities and shares recorded on balance
sheet ” takes approximately one year . On June 17, 2021, “Implementation Guidance on AccountingStandard for Fair Value Measurement” (ASBJ Guidance No.31, July 4, 2019) was updated andreleased.
(2) Effective date
To be applied from the beginning of the fiscal year ending March 31, 2023
(3) The impact of the adoption of the standard
The Company and its consolidated domestic subsidiaries are currently in the process of determining
the impact of this new standard on the consolidated financial statements.
u.

Changes in presentation(Adoption of “Accounting Standard for Fair Value Management”)
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.30, July 4 2019) was applied
from the beginning of this consolidated fiscal year, and in accordance with the transitional treatment set
forth in Article 19 of “Accounting Standard for Fair Value Measurement” and Article 44-2 of “AccountingStandard for Financial Instruments” (ASBJ Statement No.10, July 4, 2019), the Company will continue toapply new accounting policies prescribed by “Accounting Standard for Fair Value Measurement” and otherstandards in the future and to disclose the details of market value levels for each financial instrument in“financial instrument and related disclosure” section in this annual report. Subject to the transitional
treatment provided for in Paragraph 7-4 of the ASBJ Guidance No.19, notes related to “AccountingStandard for Fair Value Measurement” on previous fiscal year are not included.
(Additional information)(Accounting Estimate for the spread of COVID-19)
Accounting estimates such as impairment of fixed assets and recoverability of deferred tax assets are
based on information available as of the end of the current consolidated fiscal year, and there are no
significant changes from what was stated in the Annual Securities Report for the previous consolidated
fiscal year.

3.
※1.

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

Millions of Yen
2021
2022
Capital stock¥ 1,022

-16 -

¥

699

Thousands of
U.S. Dollars
2022$ 5,714

※2.

Contract liabilities
Others include the following contract liabilities.

Contract liabilities※3.

Millions of Yen
2022

Thousands of
U.S. Dollars
2022¥ 4,180$ 34,159

Contingent liabilities
Contingent liabilities for guaranteed employees' loans amounted to ¥12 million and ¥9 million(US$ 75 thousands) as of March 31, 2021 and 2022, respectively.

※4.

Commitment line contract
The Company has entered into commitment line contracts with four banks for effective fund-raising:Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Total limit of contract
Loan balances
Available amounts

4.

¥ 15,000
1,000
14,000¥ 15,000
5,000
10,000$122,559
40,85381,706NOTES TO CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME※1. Revenue recognized from contracts with customers
In terms of net sales, revenue recognized from contracts with customers and other revenue are not statedseparately. Disaggregated information of revenue recognized from contracts with customers is described in
Note13.1.
※2.

Merchandise and finished goods at the end of fiscal year is described the amount after write-down to bookvalue accompanying with declining profitability.
Loss on valuation of inventories which is included in cost of sales is ¥218 million and ¥1,989million(US$ 16,256 thousands)for the years ended March 31,2021 and 2022, respectively.

※3.

Selling, general and administrative expenses
Major items and the amounts under “Selling, general and administrative expenses” are as follows:
ThousandsofMillions of Yen
U.S. Dollars
2021
2022
2022
Salaries and bonuses
Retirement benefit expenses
Provision for directors’ bonuses
Provision for doubtful accounts※4.

¥ 16,682
1,172
128
90

¥ 18,595
1,055
304
(106)

$ 151,937
8,626
2,485
(868)

Research and development costs
Research and development costs charged to income are ¥191 million and ¥ 272million (US$ 2,225 thousands)
for the years ended March 31, 2021 and 2022, respectively.
-17 -

※5.

Gain on sales of property, plant and equipment
Details of gain on sales of property, plant and equipment are as follows:
Millions of Yen
2021
2022
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land

0
2
－

Total

※6.

¥

Thousands of
U.S. Dollars
2022

7
8
－

2

¥

15

58
65
－
$

123

Loss on disposal of property, plant and equipment
Details of loss on disposal of property, plant and equipment are as follows:
Millions of Yen
2021
2022

Thousands of
U.S. Dollars
2022

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Software

¥

63
15
10
12

¥

8
0
4
－

$

72
3
36
－

Total

¥

101

¥

13

$

113

※7.
Impairment loss
For the year ended March 31, 2021
The Group has recorded impairment loss for the following assets group.
Area

Major
uses

Ledger accounts

Impairment
losses(Millions of Yen)

San Luis Potosi
MexicoBusiness
propertyHung Yen
Province,
VietnamBusiness
property

Chiyoda-ku,
Tokyo, Japan

Business
property

Chiyoda-ku,
Tokyo, Japan

Business
property

Chiyoda-ku,
Tokyo, Japan

Idle
property

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Construction in progress
Software
Other (Investments and otherassets)Tools, furniture and fixtures
Software
Other (Intangible assets)
Other (Investments and otherassets)Buildings and structures
Tools, furniture and fixtures
SoftwareTools, furniture and fixtures

-18 -

468
993
24
65
106
10
48
0
49

Impairment
losses(Thousands of
U.S. Dollars)
4,228
8,978
217
594
962
97
439
3
448

Segment

13
53
1
1

124
484
14
10

Electronic
Components

37
15
1
0

340
140
15
4

Other

Electronic
Components
Electronic
Components

Electronic
Components

The Group recognizes impairment loss by grouping assets based on the company to which the asset belongs
and by grouping idle assets by individual projects. The assets are impaired from carrying amount to therecoverable amount when the profitability declines. The recoverable amount is measured at net selling price orvalue in use. Value in use is measured based on the amount of future cash flow. In addition, the recoverable
amount is regarded as zero when future cash flow is less than zero. Furthermore, estimates of future cash flows
include assumptions for future sales forecasts and operating profit, which are estimated based on information
impacted by factors external to the Group, such as the market environment and sales strategies.
For the year ended March 31,2022
The description is not presented due to its insignificance.

※8.

Amount of reclassification and income tax effect associated with other comprehensive income
Thousands of
U.S. Dollars
2022

Millions of Yen
2021
2022
Net unrealized gain or loss on securities
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effectNet unrealized gain or loss on securities, net of Tax
Deferred gains or losses on hedges
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment
Amount arising during the period
Amount of reclassification
Foreign currency translation adjustment
Remeasurements of defined benefit obligations
Amount arising during the period
Amount of reclassification
Net gain before income tax effect
Income tax effectRemeasurements of defined benefit obligations
Share of other comprehensive income of entities
accounted for using equity method
Amount arising during the period
Total other comprehensive income

5.

¥ 1,826
121
1,947
(570)
1,376

¥

¥

32
(348)
(316)
237
(78)

$

261
(2,843)(2,582)(1,942)
(640)

49
(40)
9
13
22

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

(26)
(404)
(430)
(1)
(432)

1,205
12
1,218

4,774
147
4,922

39,013
1,206
40,220

146
43
189
(50)
138

239
28
268
(79)
188

1,958
231
2,190
(648)
1,541

42
2,799

95
¥ 5,075$

780
41,470NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended March 31, 2021
1. Type and number of issued shares of common stock and treasury stock
Number of shares
as of April 1, 2020

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2021

28,702,118－－

28,702,118

1,243,279

698

14,1001,229,877

Number of outstanding shares
Common stock
Number of treasury stocks
Common stock (Note)-19 -Note:The breakdown of the increase and decrease of common stock is as follows:
Increase as a result of fractional share repurchases: 698 shares
Decrease as a result of the payment of restricted stock to the directors: 14,100 shares
2. Dividends(1) Dividends paid
Resolution

Generalshareholders’meeting held on
June 26, 2020
Board of Directors'
meeting held on
November 5, 2020

Type of share

Amount of dividends(Millions of yen)

Commonstock

1,098(US$9,921 thousands)

Commonstock

823(US$7,441 thousands)

Dividend per share(Yen)

Record date

Effective date40
(US$0.36)

March 31, 2020

June 29, 2020

30
(US$0.27)

September 30,
2020

December 4, 2020

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

Type of share

Generalshareholders’meeting heldon June 29,
2021

Common stock

Amount of dividends(Millions of yen)

Source ofdividends

Dividend pershare (Yen)1,373(US$12,408 thousands)

Retainedearnings

50(US$0.45)

Record date

Effective date

March 31, 2021

June 30,2021

For the year ended March 31, 2022
1. Type and number of issued shares of common stock and treasury stock
Number of shares
as of April 1, 2021

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2022

28,702,118－－

28,702,118

1,229,877

1,233,985

9,700

2,454,162

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

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

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

Type of share

Amount of dividends(Millions of yen)

Commonstock

1,373(US$11,224 thousands)

Commonstock

1,180(US$9,648 thousands)

Dividend per share(Yen)

Record date

Effective date50
(US$0.40)

March 31, 2021

June 30, 2021

45
(US$0.36)

September 30,
2021

December 3, 2021

(2) Dividends whose effective date is after March 31, 2022 with a record date during the year ended March 31,-20 -2022.
Resolution

Type of share

Generalshareholders’meeting heldon June 29,
2022

Common stock

Amount of dividends(Millions of yen)

Source ofdividends

Dividend pershare (Yen)

1,968(US$16,085 thousands)

Retainedearnings

75(US$0.61)-21 -Record date

Effective date

March 31, 2022

June 30,
2022

6.

NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS※1. Cash and cash equivalents at March 31, 2021 and 2022 are reconciled to the accounts reported in the
consolidated balance sheet as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022

7.

Cash and bank deposits
Time deposits with a deposit period of more than 3 months¥ 45,636(1,303)¥ 41,051(1,810)$ 335,415(14,795)

Cash and cash equivalents¥ 44,333¥ 39,240$ 320,620

LEASES
Finance leases that do not transfer ownership of the leased assets to lessees.
Leased assets:
The Group leases buildings, machinery, equipment and vehicles and other assets.
As described in Note 2.i, the lease accounting standard requires that all finance lease transactions should becapitalized to recognize lease assets and lease obligations in the balance sheet.
Future lease payments under non-cancelable operating leases at March 31, 2021 and 2022 were as follows:
Thousands of
U.S. Dollars
2022

Millions of Yen
2021
2022
Due within one year
Due after one year

¥

17
7

¥

9
3

$

73
28

Total

¥

24

¥

12

$

101

-22 -

8.

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

(a) Fair Value of Financial Instruments
Carrying
AmountMarch 31, 2021
Notes and accounts receivable - trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※2

Millions of Yen
Fair
Value

Unrealized
Loss

Short-term investment securities
Investment securities
Guarantee deposits¥103,773
4,621(2,024)
106,370
302
8,229
517

106,370
302
8,229
359

－
－
－
(157 )

Total¥ 115,419¥ 115,262¥ (157 )Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable¥ 79,854
10,8005,957
2,136¥ 79,854
10,800
5,957
2,136

¥

-23 -

－
－
－
－

Long-term loans payable

25,16625,158

Total¥123,915¥123,907¥

7

Derivatives ※4

¥

¥

¥

－

27

27

7

※1 As for “Cash and bank deposits” is omitted since “Cash and bank deposit” is settled in cash in ashort term.
※2 Allowance for doubtful accounts is deducted from Notes and accounts receivable - trade andelectronically recorded monetary claims.
※3 Following financial instruments which do not have quoted fair value are not included in“Investment securities” or “Guarantee deposits”. The amount recorded on the consolidatedbalance sheet of the relevant financial instrument is as follows.
Millions of Yen
2021
1,022
1,367
152
414

Financial instruments
Shares of subsidiaries and related companies
Unlisted shares
Investment partnerships
Guarantee deposits for transactions※4 The value of assets and liabilities arising from derivatives is shown at net value.

March 31, 2022

Carrying
AmountMillions of Yen
Fair
Value

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

¥110,240
264
6,669
885

－
－
(183 )

Total¥118,243¥118,060¥ (183 )Notes and accounts payable-tradeLong-term loans payable¥ 86,493
25,136¥ 86,493
25,072

¥

－
64

Total

¥111,630¥111,566¥

64

Derivatives ※4

¥

¥

¥

－

(21)

(21)

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

Shares of related companies
Non-marketable equity securities

Millions of Yen
¥ 699
1,179

※3 The description of investment in partnerships and other similar business entities that record
the amount equivalent to their equity in the consolidated balance sheet in net amount isomitted. The amount recorded on the consolidated balance sheet of the investment is 277
million yen.
-24 -

※4 The value of assets and liabilities arising from derivatives is shown at net value.

Carrying
AmountThousands of U.S. Dollars
Fair
Unrealized
Value
Loss
－
－
－
(1,499)Accounts receivable-trade
Short-term investment securities
Investment securities ※2
Guarantee deposits$ 900,735
2,159
54,4958,732$ 900,735
2,159
54,495
7,232

$

Total

$ 966,121$ 964,622$ (1,499)

Notes and accounts payable-tradeLong-term loans payable$ 706,707
205,382$ 706,707
204,854

$

－
527

Total

$ 912,089$ 911,562$

527

Derivatives ※4

$

$

$

－

(177)

(177)

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

Shares of related companies
Non-marketable equity securities

Thousands of
U.S. Dollars$ 5,7149,637※3 The description of investment in partnerships and other similar business entities that record
the amount equivalent to their equity in the consolidated balance sheet in net amount isomitted. The amount recorded on the consolidated balance sheet of the investment is 2,265
thousand of U.S. Dollars.
※4 The value of assets and liabilities arising from derivatives is shown at net value.
Note 1. Redemption Schedule of Monetary Assets and Securities with Contractual Maturities
March 31, 2021
Millions of Yen
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
¥
－
¥
－
¥
－
Cash and bank deposits¥ 45,636－－－
Notes and accounts receivable-trade103,773
Electronically recorded monetary－－－claims4,621
Investment securities with－－maturities
16
114－
Guarantee deposits
37
134
191
Total

¥ 154,085

-25 -

¥

248

¥

－

¥

191

March 31, 2022

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

Millions of Yen
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
¥
－
¥
－
¥
－
¥ 41,051
－
－
－
1,449
－
－
－
110,240

Total

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

9,258

－

－

－

－
45

10
126

－
742

－
－

¥ 162,045

¥

136

¥

742

－

¥

Thousands of U.S. Dollars
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
$
－
$
－
$
－
$ 335,415－－－
11,843－－－
900,735

Total

75,643

－

－

－

－
370

82
1,035

－
6,067

－
－

$ 1,324,006

$

1,117

$

6,067

－

$

Note 2. The payment schedule for bonds, long-term loans, lease obligations and other interest-bearing
liabilities by payment due date of March 31, 2021 and 2022 is as follows:
March 31, 2021
Millions of Yen
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable
Total

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years¥ 10,131 ¥

－ ¥

－ ¥

－ ¥

668
¥ 10,800 ¥

5,033
5,033 ¥

5,033
5,033 ¥

5,100
5,100 ¥

Over
5 years

－ ¥

－

5,000
5,000
5,000 ¥ 5,000

March 31, 2022
Millions of Yen
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable
Total

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

－ ¥

－ ¥

－ ¥

5,036
¥ 23,858 ¥

5,036
5,036 ¥

5,100
5,100 ¥

5,000
5,000 ¥

-26 -

Over
5 years

－ ¥

－

5,000
5,000
5,000 ¥ 5,000

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

－ $
－ $
－ $
－ $
－
Short-term loans$ 153,786 $Long-term loans
Including current portion of longterm loans payable
41,153
41,153
41,67040,85340,85340,853Total$ 194,939 $ 41,153 $ 41,670 $ 40,853 $ 40,853 $ 40,853(b) Matters concerning the breakdown of financial instruments by fair value measurement
The fair value of financial instruments is classified into the following three levels according to theobservability and importance of the input related to the calculation of the fair value.
Level 1: The fair value calculated based on the fair value of the asset or liability formed in the active
market and subject to the calculation of the market price among the inputs related to the calculationof the observable fair value.
Level 2: The fair value calculated using the inputs related to the calculation of fair value other than thelevel 1 input among the inputs related to the calculation of the observable fair value.
Level 3: Fair value calculated using inputs related to the calculation of unobservable fair value.
When multiple inputs that have a significant influence on the fair value calculation are used, the fairvalue is classified into the lowest level in the fair value calculation among the levels to which those
inputs belong.
(1) Financial instruments recorded on the consolidated balance sheet at fair value
March 31, 2022
Market price (Millions of Yen)
Level 1
Level 2
Level 3
Total
Short-term investment securities－－ ¥ 264
Marketable equity securities¥ 264
Investment securities－－
Marketable equity securities
6,659
6,659
－
－
Government bonds
10
10¥ 6,923 ¥10－¥ 6,934

Derivatives
Currency related transactions

－ ¥

21

－

¥

21

Total

－ ¥

21

－

¥

21

Total

March 31, 2022
Market price (Thousands of U.S. Dollars)
Level 1
Level 2
Level 3
Total
Short-term investment securities
Marketable equity securities
Investment securities
Marketable equity securities
Government bonds
Total
Derivatives
Currency related transactions
Total$ 2,159－－$ 2,159

54,413
－

－
82

－
－

54,41382$ 56,573 $82－ $ 56,655

－ $

177

－

$

177

－ $
-27 -

177

－

$

177

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

－ ¥ 111,126－ ¥ 111,126

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

March 31, 2022

Accounts receivable-trade
Guarantee deposits

Market price (Thousands of U.S. Dollars)
Level 1
Level 2
Level 3Total
－ $ 900,735－ $ 900,735
－
－
7,232
7,232

Total

－ $ 907,967－ $ 907,967

Notes and accounts payable-tradeLong-term loans payable－ $ 706,707－
204,854－ $ 706,707－ 204,854

Total－ $ 911,561－ $ 911,561

Note. Explanation of the valuation technique used to calculate the fair value and the inputs related tothe calculation of the fair value
Short-term investment securities, investment securities
Listed stocks are evaluated using market prices and are traded in active markets. Therefore, theirfair value is classified as Level 1. On the other hand, Government bonds are evaluated based on thereference value of trading statistics and are classified as Level 2.
Derivative
The fair value of exchange contracts is calculated by the discounted present value method using
observable inputs such as exchange rates, and is classified as Level 2. Since the allocation of forward
exchange contracts is treated together with the receivables and payables (accounts receivabletrade, notes and accounts payable-trade) that are hedged items the fair value is included in the fairvalue of the receivables and payables. In addition, since the special treatment of interest rate swaps
is treated together with long-term borrowings that are hedged items the fair value is included in thefair value of the long-term borrowings (Refer to “Long-term loans payable.).
Accounts receivable-trade
Since the fair value of accounts receivable-trade is settled in a short period of time, the fair value isclose to the book value, so it is classified as Level 2 based on the book value.
Guarantee deposits
The fair value of the guarantee deposits is calculated by the discounted present value method
based on the refund amount presented by the recipient or the interest rate that takes the past
performance and credit risks into account, and is classified as a level 2.
Notes and accounts payable-trade
Since these fair value are settled in a short period of time, the fair value is close to the book value.
-28 -Therefore it is based on the book value and is classified as Level 2.
Long-term loans payable
The fair value of long-term loans payable is calculated by the discounted present value method
based on the total amount of principal and interest, the remaining period of the debt and theinterest rate that takes credit risks into account, and is classified as Level 2. Some long-term loans
payable with floating interest rates are subject to special treatment of interest rate swaps (see“Derivatives”) and is calculated using the total amount of principal and interest that is treated
together with the interest rate swaps.

9.

MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of March 31, 2021 and 2022 consisted of the following:(1) Current-Marketable equity securities
Thousands of
U.S. Dollars
2022

Millions of Yen
2021
Unrealized gains included in net income forthe year

¥

2022
48

¥

(38)

$

(315))(2) Investment securities with a readily determinable fair value
March 31, 2021
Millions of Yen
Acquisition
cost

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

Difference¥ 4,236
114
1,113¥ 5,464¥ 1,645112725¥ 2,483

¥

2,425

3,224

－

－

－

339
¥ 2,764356¥ 3,580

¥

(17)
(816)

¥ 8,229¥ 6,064

¥

2,164

¥

2,591
2
387
2,980

(799)

Note:
Non-marketable equity securities of ¥1,367 million, Investments in associated companies of ¥152 million,
and Shares of subsidiaries and related companies of ¥ 1,022 million are not included in the above due todifficulty in estimating fair value as market price is not available.
March 31, 2022
Carrying
amountSecurities for which the carrying
amount exceeds the acquisition costs
Non-current:
Marketable equity securities
Government and corporate bonds¥ 5,826
10-29 -Millions of Yen
Acquisitioncost¥ 3,87010Difference

¥

1,955
0

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

1,177
¥ 7,014752¥ 4,633

832

1,166

－

－

－

310
¥ 1,143348¥ 1,515

(38)
(371)

¥ 8,157¥ 6,149

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

(333)

¥
¥

Thousands of
U.S. Dollars
Acquisition
cost

Carrying
amount

424
2,380

¥

2,008

Difference$ 47,607
82
9,618$ 57,308$ 31,628
81
6,151$ 37,861$ 15,979
03,466$ 19,447

6,805

9,528

(2,723)

－

－

－

2,537
$ 9,3422,851$ 12,379$(313)(3,036)$ 66,651$ 50,241$ 16,410

Note:
Non-marketable equity securities of ¥1,179 million (US$ 9,637 thousands) and Shares of subsidiaries andrelated companies of ¥ 699 million (US$ 5,714 thousands) are not included in the above due to stocks withno market price. In addition, investments in unions and other similar business entities that record theamount equivalent to their equity in the consolidated balance sheet in net amount of ¥277 million(US$ 2,265 thousands) is omitted.
(3) Investment securities sold during 2021 and 2022
March 31, 2021
Millions of Yen

Investment securities
Government and corporate bonds
OthersTotal

Amounts sold

Gains on sales

Loss on sales

¥

¥

¥

¥

235
－
273
509

¥

128
－
－
128

¥

－
－
(36)
(36)

－

March 31, 2022
Millions of Yen

Investment securities
Government and corporate bonds
OthersTotal

Amounts sold

Gains on sales

Loss on sales

¥

¥

¥

¥

-30 -

734
－
202
937

¥

361
－
2
363

¥

(1)
－
(1)
(2)

－

Thousands of
U.S. Dollars

Investment securities
Government and corporate bonds
OthersTotal

Amounts sold

Gains on sales

Loss on sales

$

$

$

$

6,004
－
1,658
7,662

$

2,951
－
16
2,967

(12)
－
(8)
(20)

$

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

Millions of Yen
2021
¥

2022
525

¥

2022
260

$

2,130

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

March 31, 2021

Hedged Item

Millions of Yen
Contract
AmountContract
Due after
AmountOne YearPrinciple processing method:
Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying CNY
Buying EUR

Receivables
Receivables
PayablesPayablesPayables¥ 4,509
119
2,282
0
0

¥

－
－
－
－

¥

(60)
(4)
101
0
(0)

¥ 6,912

¥

－

¥

35

¥ 5,453
250

¥

－
－
－

¥

－

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

Receivables
Receivables
Receivablesother
PayablesPayablesPayables

Total

1
4,163
3
1
¥ 9,874

-31 -

¥

－
－
－
－
－

Fair
Value

March 31, 2022

Hedged Item

Millions of Yen
Contract
AmountContract
Due after
AmountOne YearPrinciple processing method:
Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying EUR

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

¥

－
－
－

¥ (140)(5)
141
0¥ 6,483

¥

－

¥

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

Fair
Value

(5)

March 31, 2022

Hedged Item

－
－
－
－
－
－
¥ －
¥ －
¥ 11,149
Thousands of U.S. Dollars
Contract
AmountContract
Due after
Fair
AmountOne Year
Value

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

Receivables
Receivables
PayablesPayables$ 29,521
628
22,8260$－－－$ (1,149)
(48)
1,155
0

$ 52,975

$

－

$

(42)

$ 56,106450
36,95631
6$$ 93,549

$

－
－
－
－
－
－
－

$

－

Receivables
Receivables
PayablesPayablesPayables

Total

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

Receivables
Receivables
PayablesPayablesPayablesTotal¥ 6,866
55
4,523
3
0

¥

Note:
Allocation of forward exchange contracts is accounted for as an integral part of monetary receivables andpayables denominated in foreign currencies that are hedged items. Therefore, their fair value is included in thefair value of the foreign currency-denominated receivables and payables that are hedged items.
-32 -(2) Interest related transactions
For the year ended March 31, 2021

Hedge
Accounting
MethodSpecialtreatment
for interest
rate swap

Type ofTransaction
Interest rate
swap
Receivefloating,
pay fixed

Hedged Item
Long-termloans payable

Contract
AmountMillions of Yen
Contract
AmountDue after
One Year¥ 13,093¥ 12,900

Fair
Value
(Note)

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

For the year ended March 31, 2022

Hedge
Accounting
MethodSpecialtreatment
for interest
rate swap

Type ofTransaction
Interest rate
swap
Receivefloating,
pay fixed

Hedged Item
Long-termloans payable

Millions of Yen, Thousands of U.S.
Dollars
Contract
AmountContract
Due after
Fair
AmountOne YearValue¥ 12,900($ 105,400)¥ 8,600($ 70,267)(Note)

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

-33 -11. RETIREMENT BENEFITS(1) Outline of retirement benefits plans
Under the pension plans, employees terminating their employment are, in most circumstances, entitled topension payments based on their average pay during their employment, length of service and certain otherfactors. The defined benefit plans and lump-sum payment plans of some of the consolidated subsidiaries arecalculated using simplified methods.
(2) Defined benefit pension plans(a) Changes in the retirement benefit obligation for the years ended March 31, 2021 and 2022 (excluding
plans applying the simplified method) are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Retirement benefit obligation at the beginning of the year
Increase from newly consolidated subsidiary
Service cost
Interest cost
Actuarial gains (losses)
Benefits paid
Prior service cost
Others¥ 6,971
879
482
40
(61)
(330)
－
4

¥ 7,987
－
518
40
(197)
(504)
(17)
6

$ 65,259
－
4,239
327
(1,612)(4,119)(146)
51

Retirement benefit obligation at the end of the year

¥ 7,987¥ 7,823$ 63,925(b) Changes in the plan assets for the years ended March 31, 2021 and 2022 (excluding plans applying thesimplified method) are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Plan assets at fair value at the beginning of the year
Increase from newly consolidated subsidiary
Expected return on plan assets
Actuarial gains (losses)
Contributions by the employer
Benefits paid
Others¥ 6,274
611
125
129
406
(238)
2

¥ 7,310
－
124
23
426
(466)
55

$ 59,734
－
1,017
188
3,484
(3,807)450

Plan assets at fair value at the end of the year

¥ 7,310¥ 7,473$ 61,067(c) Changes in net defined benefit liabilities for plans which applied the simplified method for the years
ended March 31, 2021 and 2022 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Net defined benefit liabilities at the beginning of the year
Increase from newly consolidated subsidiary
Retirement benefit expenses
Retirement benefits paid
Contributions to plan
Others-34 -¥ 1,252
254
247
(91)
(90)
(7)

¥ 1,565
－
296
(100)
(117)
(2)

$ 12,794
－
2,418
(820)
(960)
(17)

Net defined benefit liabilities at the end of the year

¥ 1,565¥ 1,641$ 13,415(d) Reconciliation between the funded status of the plans (retirement benefit obligation and plan assets) andthe amounts recognized in the consolidated balance sheet (net defined benefit liabilities and net defined
benefit assets) as of March 31, 2021 and 2022 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Retirement benefit obligation of funded plans
Plan assets
Retirement benefit obligation of unfunded plans
Net liabilities recorded in the consolidatedbalance sheet
Net defined benefit liabilities
Net liabilities recorded in the consolidatedbalance sheet¥ 9,166(8,090)
1,076
1,166

¥ 7,673(7,473)199
1,800$ 62,699(61,067)
1,632
14,707¥ 2,242¥ 1,999$ 16,340

2,242

1,999

16,340¥ 2,242¥ 1,999$ 16,340(e) Components of retirement benefit expenses for the years ended March 31, 2021 and 2022 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Prior service cost
Redundancy pay
Retirement benefit expenses calculated based on thesimplified method
Others

¥ 488
40
(125)
43
－
21

¥ 424
40
(124)
33
(1)
7

$ 3,465327(1,017)
272
(12)
61

247
9

337
12

2,761
105

Retirement benefit expenses for defined benefit pension plans ¥ 727¥ 730$ 5,965(f) Remeasurements of defined benefit plans, net of tax for the years ended March 31, 2021 and 2022 are as
follows:
Components of remeasurements of defined benefit obligations, net of tax before income tax effectadjustment
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
－
189

Prior service cost
Actuarial gains and losses

¥

Total

¥ 189

-35 -

¥

16
252

¥ 269

$

133
2,065

$ 2,199

(g) Remeasurements of defined benefit obligations as of March 31, 2021 and 2022 are as follows:
Components of remeasurements of accumulated defined benefit obligations before income tax effectadjustment
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Unrecognized prior service cost
Unrecognized actuarial gains or losses

¥

－
18

¥

Total

¥

18

¥ 288

16
272

$

133
2,225

$ 2,359(h) Items for plan assets
Components of plan assets
Ratio of primary components to total plan assets
2021

2022

General accounts
Other

79.39%
20.61%

73.25%
26.75%

Total

100.00%100.00%

Determining expected long-term rate of return
In determining the long-term rate of return for plan assets, the Company considers the current andprojected asset allocations, as well as the current and expected long-term investment returns from thevarious assets that constitute the plan assets.
(i) Items related to the basis of actuarial calculation
Items that form the primary basis for actuarial calculations using the weighted average method
2021
2022
0.46～0.67%
0.43～0.67%
Discount rate
0.87～2.50%
1.50～2.50%
Expected long-term rate of return(3) Defined contribution pension plans
Contributions to defined contribution pension plans by the Company and its consolidated subsidiaries
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
¥ 610

-36 -

¥ 522

$ 4,265

12.

INCOME TAXES(1) The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred
tax assets and liabilities at March 31, 2021 and 2022 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2022
2022
Deferred tax assets:
Loss on revaluation of investment securities
Retirement benefits for directors and corporate auditors
Retirement benefits for directors (and other officers)
Allowance for doubtful accounts
Accrued bonuses
Net defined benefit liability
Tax loss carryforwards
Devaluation of inventories
Impairment loss
Deferred tax assets of the planned liquidation company
OthersSub-total
Valuation allowance on tax loss carryforwards
Valuation allowance on deductible temporary differences
Less valuation allowance—total

¥

847
33
401
723
763
710
2,522
280
804
106
2,219
9,414
(1,165)(3,899)(5,065)

¥

862
38
401
728
972
619
1,794
806
851
－
2,379
9,453
(944 )(4,164 )(5,109)$ 7,043
314
3,278
5,954
7,944
5,058
14,659
6,588
6,955
－
19,444
77,241(7,720)(34,023)(41,743 )Deferred tax assets—total

4,348

4,344

35,498Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries
Unrealized gain on property and equipment
Unrealized gain on available-for-sale securities
Advanced depreciation on fixed assets
Others(2,267 )(101 )(972 )(179 )(258 )(2,845 )(95 )(734 )(171 )(354 )(23,246)(777)(6,004)(1,403)(2,898)Deferred tax liabilities—total(3,781 )(4,201 )(34,330)142$ 1,167

Net deferred tax assets

¥

567

¥

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

March 31, 2021
Millions of Yen
Within1 yearTax loss carryforwards※
Less valuation allowance
Deferred tax assets

¥

102
(102)
－

Over 1 year
within 2 years

¥

118
(112)
6

Over 2 years
within 3 years

¥

124
(71)
53

Over 3 years
within 4 years

¥

92
(71)
21

Over 4 years
within 5 years

¥

135
(109)
25

Over
5 years

¥

1,948
(698)
1,249

Total

¥

2,522
(1,165)
1,356

March 31, 2022
Millions of Yen
Within1 yearTax loss carryforwards※
Less valuation allowance

¥

114
(114)

Over 1 year
within 2 years

¥

96
(48)

Over 2 years
within 3 years

¥

93
(54)
-37 -

Over 3 years
within 4 years

¥

118
(79)

Over 4 years
within 5 years

¥

101
(94)

Over
5 years

¥

1,269
(552)

Total

¥

1,794
(944)

－

Deferred tax assets

47

38

39

6

716

849

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

Over 2 years
within 3 years

Over 3 years
within 4 years

Tax loss carryforwards※
$ 939
$ 786
$
764
$
969
Less valuation allowance
(939)
(397)
(447)
(646)
－
Deferred tax assets
388
316
322
※Tax loss carryforwards are multiplied by the effective statutory tax rate.

Over 4 years
within 5 years

$

827
(775)
52

Over
5 years$

Total

10,371(4,513)
5,857$(2) A reconciliation between the effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statements of operations for the years ended March 31, 2021 and 2022 is asfollows:
2021

2022

Effective statutory tax rate
Expenses not deductible for income tax purposesTax benefits not recognized on operating losses of subsidiaries
Difference in tax rates of foreign subsidiaries
Dividends from overseas subsidiaries and deferred income taxes
on retained profits of overseas subsidiaries
Change in valuation allowance
Share of loss of entities accounted for using equity method
Gain on bargain purchase
Others, net

30.6%
0.3
7.5
(4.9)

30.6%
0.2
(0.3)
(5.6)

2.2
(0.4)
1.3
(16.8)
2.0

3.0
(0.3)
0.7
－
(1.7)

Actual effective tax rate

21.8

26.6

-38 -

14,659(7,720)
6,938

13.

REVENUE RECOGNITION

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

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

Millions of Yen
Reportable Segment
Information
SoftEquipment
Ware

Other

Total

¥ 201,861
34,062
16,840
181,037¥ 38,946－－1¥ 2,75017－－¥ 18,675
22
33305¥ 262,233
34,101
16,874
181,344433,801
51

38,948
668

2,767
－

19,036553

494,553
1,273

433,852

39,616

2,767

18,590495,827

Thousands of U.S. Dollars

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

Reportable Segment
Information
SoftEquipment
Ware

Other

Total

$ 1,649,329$ 318,219$ 22,472$ 152,587$ 2,142,607

278,307
137,593
1,479,188

－
－
13

141
－
－

182
277
2,493

278,630
137,870
1,481,694

3,544,417
422

318,232
5,462

22,613－

155,5394,524

4,040,801
10,4083,544,839

323,694

22,613160,063

4,051,210

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

Receivables from contracts with customers(At the beginning of this fiscal year)
Receivables from contracts with customers(At the end of this fiscal year)
Contract liabilities(At the beginning of this fiscal year)-39 -Millions of Yen
2022

Thousands of
U.S. Dollars
2022¥ 108,329$ 885,113

120,806

987,061

3,419

27,935

Contract liabilities(At the end of this fiscal year)

4,180

34,159Contract liabilities mainly consists of compensation from customers based on payment terms before goods orservices are transferred to customers and contract liabilities are reversed with recognition of revenue. Contract
liabilities are included in “Others” in current liabilities. The amount of revenue recognized in this fiscal year that was
included in the contract liabilities at the beginning of this fiscal year is ¥1,149 million ($9,390 thousand).
(b) Transaction price allocated to the remaining performance obligations
The Company and its subsidiaries apply simplified method in note of transaction price allocated to the remaining
performance obligations, and therefore the contracts that have an original expected duration of one year or less are
not included. The performance obligation is related to all business manufacturing and sales. The total transaction
price allocated to the remaining performance obligations and the expected period of revenue recognition are as
follows.

Within 1 year
More than 1 year and Within 2 year
More than 2 year and Within 3 year
More than 3 year
Total

14.

Millions of Yen
2022

Thousands of
U.S. Dollars
2022

¥ 79
76
66
162
385

$ 652
623
544
1,328
3,149

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

-40 -(3) Information about sales, profit (loss), assets and other items is as follows:
Millions of Yen
2021
Reportable Segment
Electronic
Components
Sales:
Sales toexternal customers
Inter segment sales
or transfers¥ 353,454

Total sales¥ 356,476

Segment profit (loss)¥
8,151
Segment assets
215,323
Others:Depreciation
2,273
Increase inproperty,plant and equipment
and intangible assets
3,139

Information
Equipment

Software

Other

Total

Reconciliations(Note 1)

Consolidated(Note 2)－

¥ 422,365

13,166(13,166)－¥

52,640 ¥ 4,111 ¥ 22,303 ¥ 435,532¥ (13,166)¥ 422,365¥

2,482 ¥ 263 ¥474
18,3682,076
11,142

¥

¥

¥

3,022

48,389 ¥ 2,932 ¥ 17,589 ¥ 422,365
4,251

1,178

4,714

¥

11,371
246,911¥95(9,906)

11,467
237,004

51

56

156

2,537

(7)

2,530

281

93

183

3,698

(124)

3,574

Millions of Yen
2022
Reportable Segment
Electronic
Components
Sales:
Sales toexternal customers
Inter segment sales
or transfers¥ 433,852

Total sales¥ 436,586

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

Information
Equipment

Software

Other

Total

Reconciliations(Note 1)

Consolidated(Note 2)－¥ 495,827

15,257(15,257)－¥

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

2,085
20,435

¥

¥

¥

2,733

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

855

¥

6,265

(26) ¥
626
1,612
11,707¥

20,792284,214¥122(12,074)

20,915272,139

54

53

136

2,481

(10)

2,471

121

24

146

4,654

－

4,654

-41 -

Thousands of U.S. Dollars
2022
Reportable Segment
Electronic
Components

Information
Equipment

Software

Other

Reconciliations(Note 1)

Total

Consolidated(Note 2)

Sales:
Sales toexternal customers
Inter segment sales
or transfers$ 3,544,839 $ 323,694 $ 22,613 $ 160,063 $ 4,051,210 $(124,664)－

Total sales$ 3,567,176 $ 367,837 $ 29,605 $ 211,255 $ 4,175,875 $ (124,664)$ 4,051,210

22,337

Segment profit (loss)$ 147,952
Segment assets
2,046,409
Others:Depreciation
18,281
Increase in-property,
plant and equipment
and intangible assets
35,644

44,143$

6,992

51,191

124,664

17,039 $ (218 ) $ 5,116 $ 169,889
166,966 13,173
95,6552,322,205－$$ 4,051,210

1,003(98,658)$ 170,893
2,223,547

445

434

1,118

20,279(85)

20,193

988

201

1,193

38,028－38,028

Note: 1. The adjustment for segment operating income is as follows:(1) Segment income
Millions of Yen
2021
2022
Elimination of inter-segment trade
Amortization of goodwill
Total

¥

Thousands of
U.S. Dollars
2022

¥ 95
－

¥ 122
－

$

1,003
－

95

¥ 122

$

1,003

(2) Segment assets
Millions of Yen
2021
2022

Thousands of
U.S. Dollars
2022

Elimination of inter-segment trade
Reconciliations¥ (12,168)
2,261¥ (14,176)
2,101$ (115,826)
17,168Total¥ (9,906 )¥ (12,074 )$(98,658)

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

-42 -(3) Depreciation and amortization
Millions of Yen
2021
2022

Thousands of
U.S. Dollars
2022

Elimination of inter-segment trade¥ (7)¥ (10)$ (85)

Total

¥ (7)

¥ (10)$ (85)(4) Increase amount of tangible and intangible fixed assets
Millions of Yen
2021
2022

Thousands of
U.S. Dollars
2022

Elimination of inter-segment trade¥ (124)

¥ －

$

－

Total

¥ (124)¥ －$－2. Segment income is adjusted for operating income in the consolidated statement of income andcomprehensive income.
Associated Information
For the year ended March 31, 2021
(1) Information about individual products and services
This information is not presented because the Group prepares reports in accordance with a management
approach based on individual products and services.
(2) Geographic information(a) Sales

Japan

North America

Millions of Yen
2021
Europe¥ 240,240¥ 22,698¥ 13,622

Asia

Total

¥ 145,804¥ 422,365

Note: Sales are classified in countries or regions based on the location of customers.
(b)

Property, plant and equipment
Millions of Yen
2021
Japan

North
America

EuropeAsia¥11,688

¥ 114

¥ 158

¥

-43 -

Total
6,263

¥ 18,225

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

the United States, the United Mexican States
United Kingdom, Federal Republic of Germany, Czech Republic,
Russia and Republic of Turkey
Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand,
India, Indonesia and Vietnam(3) Information about major customers
This information is not presented because no sales to any individual customer were more than 10% ofconsolidated sales.

-44 -For the year ended March 31, 2022
(1) Information about individual products and services
This information is not presented because the Group prepares reports in accordance with a management
approach based on individual products and services.
(2) Geographic information(a) Sales

Japan

North America

Millions of Yen
2022
Europe¥ 263,415¥ 34,101¥ 16,874

Asia

Total

¥ 181,436¥ 495,827

Asia

Total

$ 1,482,445$ 4,051,210

Thousands of U.S. Dollars
2022
North America
EuropeJapan$ 2,152,262$ 278,631$ 137,871

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

Japan

North America¥11,336

¥ 415

Japan

North America

Millions of Yen
2022
Europe¥ 129
Thousands of U.S. Dollars
2022
Europe

Asia
¥

Total

7,512

¥ 19,393

Asia

Total

$ 3,39$ 92,6291$ 1,054$ 61,380
Notes: 1. Countries and regions are classified according to geographical proximity.

$ 158,454

2. Countries and regions outside Japan are broken down into the following geographicalareas:(1) North America:(2) Europe:(3) Asia:

the United States, the United Mexican States
United Kingdom, Federal Republic of Germany, Czech Republic,
Russia and Republic of Turkey
Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand,
India, Indonesia and Vietnam(3) Information about major customers
This information is not presented because no sales to any individual customer were more than 10% ofconsolidated sales.

-45 -Information of impairment loss on fixed assets of reportable segments
For the year ended March 31, 2021

Impairment loss

Millions of Yen
2021
Reportable Segment
Information
SoftEquipment
ware
¥ －
¥ －

Other
¥ 55

Total
¥ 1,893

Electronic
Components¥ 45

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

Other
¥ 47

Total
¥ 93

Electronic
Components$ 373

Thousands of U.S. Dollars
2022
Reportable Segment
Information
SoftEquipment
ware
Other
$ －
$ －
$ 387

Total
$ 761

Electronic
Components¥ 1,838

For the year ended March 31, 2022

Impairment loss

Impairment loss

Information of amortization of goodwill and balance of goodwill of reportable segments
For the year ended March 31, 2021
Millions of Yen
Reportable Segment

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

Information
Equipment

¥ 114

¥ －

209

－

Other

Total

Reconciliation
s

¥ －

¥ －

¥ 114

¥ －

¥ 114

－

－

209

－

209

SoftwareConsolidated

For the year ended March 31, 2022

Electronic
Components
Amortization of goodwill
for fiscal year
¥ 110
Balance of goodwill at theend of fiscal year
98

Millions of Yen
Reportable Segment
Information
SoftEquipment
Ware
Other

Reconciliations

Total

Consolidated

¥ －

¥ －

¥ －

¥ 110

¥ －

¥ 110

－

－

－

98

－

98

-46 -

Electronic
Components
Amortization of goodwill
for fiscal year
$ 901
Balance of goodwill at theend of fiscal year
807

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

Reconciliations

Consolidated

$ －

$ －

$ －

$ 901

$ －

$ 901

－

－

－

807

－

807

Information of gain on negative goodwill by reportable segments
For the year ended March 31, 2021
The Company recognized a gain on bargain purchase of ¥7,963 million (US$71,930 thousands) in the Electric
Components segment, when the Company acquired of EXCEL Co., Ltd share on April 1, 2020

For the year ended March 31, 2022
No significant items to be reported.
15. RELATED PARTY TRANSACTIONS(1) Principal transactions between the Company and its related party
For the year ended March 31, 2021
The description is not presented due to its insignificance.
For the year ended March 31, 2022
Principal transactions between the Company and its related party for the year ended March 31, 2022 aresummarized as follows:(Amount unit: Millions of yen, Thousands of U.S. dollars)TypeCompany
Name

Head
OfficeMajor
stockholder

SankyoCo., Ltd.

Shibuyaku,
Tokyo

CapitalStockBusiness
Activities

Percentage
forPossession of
Voting Rights¥14,840

Manufacturing andsales ofgame
machines

Owned
directly
9.24%

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

Title of
Account

Amount asof March
31, 2020－

Acquisitionof ownshares (Note)¥3,674－－

Note:
Treasury shares have been repurchased through Tokyo Stock Exchange Trading Network Off Auction Own Share
Repurchase Trading System (ToSTNeT-3) on August 5,2021,at the price of ¥2,983, based on Board of Directors
Resolution on August .5, 2021. As a result of the acquisition of treasury shares, Sankyo Co., Ltd. is removed
from the major shareholders of the Company and is no longer a related party.

-47 -(2) Principal transactions between the Company’s director and its related party
For the year ended March 31, 2021
Principal transactions between the Company’s director and its related party for the year ended March 31, 2021
are summarized as follows:(Amount unit: Millions of yen)Type

Company
Name orDirector
Name

Head
OfficeMajority
owned
company
by adirectorand thedirector’s
relatives

KGF CO.,LTD.

Chiyoda-ku,
Tokyo

CapitalStockBusiness
Activities or
Occupation¥10

Managementof restaurant
andconvenience
store

Percentage
forPossession of
Voting Rights

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

Title of
Account

Amount asof March
31, 2021－

Interlocking
directorate

Purchasing
goods,
Purchasing
gifts(Note)¥24－－

Note: The Company concluded the contract transaction at a price equivalent to market price.
For the year ended March 31, 2022
Principal transactions between the Company’s director and its related party for the year ended March 31,
20221 are summarized as follows:(Amount unit: Millions of yen, Thousands of U.S. dollars)Type
Majority
owned
company
by adirectorand thedirector’s
relatives

Company
Name orDirector
Name

Head
OfficeKGF CO.,LTD.

Chiyoda-ku,
Tokyo

CapitalStockBusiness
Activities or
Occupation

¥10
($81)

Managementof restaurant
andconvenience
store

Percentage
forPossession of
Voting Rights－

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

Title of
Account

Amount asof March
31, 2022

Interlocking
directorate

Purchasing
goods,
Purchasing
gifts(Note)

¥8
($69)

－

－

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

-48 -

16.

PER SHARE INFORMATION
Yen

U.S. Dollars
2022

2021

2022

Net assets per share¥ 3,311.24¥ 4,026.22$ 32.89

Net income per share

415.07576.45

4.70

Notes 1. Diluted net income per share has not been disclosed because there were no potentially dilutive
shares.
2. The basis for computation of net income per share is as follows:
Thousands of
U.S. Dollars
2022

Millions of Yen
2021
Net income per share
Profit attributable to owners of theparent
Net income unallocated to common
stockProfit attributable to owners of theparent allocated to common stock
Average number of common stock
outstanding during the fiscal year
(Share)¥2022

11,39915,401$ 125,841－－－

11,39915,401

125,841

27,465,021

26,717,972－－

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

¥

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

Net assets per share
Total net assets
Amount deducted from total net assets(Non-controlling interests)
Net assets corresponding to common stockat the end of the fiscal year
Number of common stock shares used forthe calculation of net assets per share(Share)Thousands of
U.S. Dollars
2022

2021

2022

¥ 95,062
4,095(4,095)¥ 105,800
120
(120)

$ 864,452
981
(981)

90,967

105,680

863,470

27,472,241

26,247,956

-49 -

17.

SIGNIFICANT SUBSEQUENT EVENTS(Issuance of Unsecured Corporate Bonds)
The Company, based on Directors’ Resolution in Board of Directors Meeting on April 28,2022, determined theterms of issuance on June 17,2022, and issued 1st and 2nd of unsecured corporate bonds. An overview of the
Unsecured Corporate Bond is presented below.
Kaga Electronics Co., Ltd. 1st Unsecured Corporate Bonds(Subject to a designated inter-bond pari passu clause)
1. Total amount of issue
5,000 million yen
2. Face value each unsecured corporate bond
100 million yen
3. Interest rate
0.400% per annum
4. Issue price
100 yen per 100 yen of each
5. Issue dateJune 23, 2022
6. Redemption deadline
June 23, 2025
7. Redemption method
Redemption in a lump sum at maturity
8. Collateral and guarantees
These unsecured corporate bonds are not secured by any collateral or guarantees, and no assets have beenretained specifically to secure them.
9.Purpose of issue
Reimbursement of borrowing
Kaga Electronics Co., Ltd. 2nd Unsecured Corporate Bonds(Subject to a designated inter-bond pari passu clause)
1. Total amount of issue
5,000 million yen
2. Face value each unsecured corporate bond
100 million yen
3. Interest rate
0.500% per annum
4. Issue price
100 yen per 100 yen of each
5. Issue dateJune 23, 2022
6. Redemption deadline
June 23, 2027
7. Redemption method
Redemption in a lump sum at maturity
8. Collateral and guarantees
These unsecured corporate bonds are not secured by any collateral or guarantees, and no assets have beenretained specifically to secure them.
9.Purpose of issue
Reimbursement of borrowing

-50 -

18.

CONSOLIDATED SUPPLEMENTARY SCHEDULE(1) Schedule of bonds
Not applicable.
(2) Schedule of loans
Millions of Yen
Category
Short-term loans
payableCurrent portion of
long-term loans
payableCurrent portion oflease obligations
Long-term loans
payable(excluding current
portion)Lease obligations(excluding current
portion)
Other interestbearing debt
Total

Thousands of
U.S. Dollars
2022Interest
rate (%)

Maturity

2021

2022

¥ 10,131¥ 18,821$ 153,786

0.86%

－

668

5,036

41,153

0.46%

－

699

733

5,997

2.71%

－

25,16625,136205,3820.5%2023 to 2027

1,594

1,442

11,7852.21%2023 to 2026

－

－

－

－

¥ 38,261¥ 51,171$ 418,103－

Notes:
1. Interest rates are stated at weighted average interest rates based on the average balance of borrowings for the year.
2. The repayment schedule of long-term loans payable and lease obligations (excluding current portion) per year for 5 years
subsequent to March 31, 2021 is summarized as follow

Category
Long-term loans payable
Lease obligations
Total

Category
Long-term loans payable
Lease obligations
Total

Over 1 year
within 2 years¥ 5,036625¥ 5,662

Millions of Yen
Over 2 years
within 3 years¥ 5,100
397¥ 5,497

Over 3 years
within 4 years¥ 5,000
181¥ 5,181Over 4 years
within 5 years¥ 5,000102¥ 5,102

Over 1 year
within 2 years$ 41,153
5,114$ 46,267

Thousands of U.S. Dollars
Over 2 years
within 3 years$ 41,670
3,250$ 44,921

Over 3 years
within 4 years$ 40,853
1,486$ 42,339

Over 4 years
within 5 years$ 40,853
839$ 41,692(3) Schedule of asset retirement obligations
According to the Article 92-2 of the “Regulations for Consolidated Financial Statements,” schedule of asset
retirement obligations is not presented, as the amount of asset retirement obligations is less than 1 percent of thetotal amount of liabilities and net assets.

-51 -