Kaga Electronics Co., Ltd.
and Consolidated Subsidiaries
Consolidated Financial Statements for theYear Ended March 31, 2021
and Independent Auditor’s ReportKaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2021

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

Millions of Yen
2020
2021

Thousands of
U.S. Dollars(Note 1)2021

43,38485,4955,876
254
25,276
567
6,063
7,601
(188)
174,33145,636
103,773
4,621
302
29,727
1,280
6,940
9,921
(2,024)200,179$ 412,218
937,345
41,741
2,736
268,515
11,56462,694
89,615(18,288)
1,808,143¥

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

13,899(6,533)7,365

14,327(7,305)
7,021

129,412(65,988)
63,424

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

10,163(5,685)
4,477

11,496(6,853)
4,642

103,840(61,903)
41,937

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

5,092(4,032)
1,060

5,632
(4,254)
1,378

50,875(38,428)
12,447Land
Construction in progress
Total PROPERTY, PLANT AND EQUIPMENT

4,924
145
17,974

5,074
107
18,22545,836975
164,621INTANGIBLE ASSETS
Goodwill
Software
OthersTotal INTANGIBLE ASSETS

322
1,743
190
2,256

209
2,338
62
2,609

1,889
21,118561
23,570INVESTMENTS AND OTHER ASSETS:
Investment securities ※1
Deferred tax assets
Guarantee deposits
Insurance funds
OthersAllowance for doubtful accounts
Total INVESTMENTS AND OTHER ASSETS

8,502
1,584
857
894
1,791
(552)
13,075

10,771
2,252
931
910
1,629
(504)
15,99097,296
20,334
8,413
8,223
14,715(4,558)144,435

Total NONCURRENT ASSETS

33,30636,825

332,627¥ 207,638¥ 237,004$ 2,140,771

Total ASSETS-1-

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance SheetAt March 31, 2021

Millions of Yen
2020
2021

LIABILITIESCURRENT LIABILITIES:
Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Provision for directors' bonuses
OthersTotal CURRENT LIABILITIES¥ 70,188
6,540
5,739
1,884
101
9,201
93,655¥ 79,854
10,800
5,957
2,136
126
9,642
108,517$ 721,292
97,55853,80919,2981,141
87,097980,196

20,833
1,378
95
1,969
329
3,127
27,732

25,166
1,685
106
2,272
343
3,850
33,424

227,318
15,220960
20,5303,099
34,782301,912

121,388

141,942

1,282,109

12,133
13,87855,091(2,005)79,097

12,133
14,32764,568(1,984)89,045109,597
129,417583,224(17,923)804,315

0
28
(707)
(133)
(812)

1,378
50
470
21
1,921

12,454
457
4,252
191
17,354

7,965
86,250

4,095
95,062

36,992858,662¥ 207,638¥ 237,004$ 2,140,771

NONCURRENT LIABILITIES:Long-term loans payable
Deferred tax liabilities
Provision for directors' retirement benefits
Net defined benefit liabilities
Asset retirement obligations
OthersTotal NONCURRENT LIABILITIES
Total LIABILITIESNET ASSETS:SHAREHOLDERS’ EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total SHAREHOLDERS’ EQUITYACCUMULATED 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
Non-controlling interests
Total NET ASSETS
Total LIABILITIES AND NET ASSETS

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

-2-

Thousands of
U.S. Dollars(Note 1)2021

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Income and Comprehensive Income
For the Year Ended March 31, 2021

Millions of Yen
2020
2021
Net sales
Cost of sales ※2
Gross profit

Thousands of
U.S. Dollars(Note 1)2021

¥ 443,615
396,598
47,016¥ 422,365
374,428
47,936$ 3,815,063
3,382,068
432,994

Selling, general and administrative expenses ※1, 2
Operating income

37,001
10,01436,46911,467

329,416
103,578

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

269
199
228
275
126
385
1,485

135
197
168
116
539
1,158

1,227
1,782
1,524
1,056
4,876
10,467

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

308
905
149
1,362
10,137

317
627
359
80
1,384
11,241

2,866
5,664
3,248
725
12,504
101,541

61
135
12
498
1
709

2
128
7,963
7
20
8,122

24
1,164
71,93063
188
73,371

12
57
880
199
380
30
¥ 1,560

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

920
330
4,748
220
17,107
15,811
4,338
713
44,189EXTRAORDINARY INCOME
Gain on sales of property, plant and equipment ※3
Gain on sales of investment securities
Gain on bargain purchase
Gain on transfer of businessSettlement received
OthersTotal EXTRAORDINARY INCOMEEXTRAORDINARY LOSS
Loss on disposal of property, plant and equipment ※4
Loss on sales of investment securities
Loss on valuation of investment securities
Special retirement expenses
Impairment loss
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, 2021
Thousands of
U.S. Dollars(Note 1)
2021

Millions of Yen
2020
2021
Income before income taxes¥ 9,286¥ 14,472$ 130,722

3,054
(61)
2,992
6,293

3,207
(51)
3,156
11,31528,974(462)
28,511
102,210

5,852
441

11,399(84)

102,969(758)(1,018)26(1,260)
68

1,376
22
1,218
138

12,436205
11,004
1,254

(104)

42

381

(2,288)2,799

25,282¥ 4,005¥ 14,114$ 127,493¥ 3,708297¥ 14,10113$ 127,375
117

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

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, 2021
Fiscal year ended March 31, 2020

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 interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

Capital surplus

12,133¥Retained earnings

13,865

Total shareholders’equityTreasury stock¥ 51,297¥(2,024)¥(2,058)(2,058)

5,852
12

¥

－
12,133¥

12
13,87875,272

3,793¥ 55,091

¥

(0)
19

5,852
(0)
31

0

0

18
(2,005)¥

3,825
79,097

Millions of Yen
Accumulated other comprehensive income

Changes in
the fair valueof availablefor-salesecurities

Balance at the beginning ofcurrent period¥ 1,018
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(1,017)
Total changes of items
during period(1,017)
Total¥
0

Deferred
gains orlosses onhedges¥Foreigncurrencytranslation
adjustment

2

¥

527

Remeasurement ofdefinedbenefitobligations

Total
accumulated
othercomprehen-sive income

Noncontrollinginterests

Total net
assets¥ (215 )¥ 1,332¥ 7,654¥ 84,259(2,058)
5,852
(0)
31
0

¥

26

(1,234)81

26
28(1,234)¥ (707)81¥ (133 )-5 -(2,144)310(1,834)(2,144)¥ (812) ¥

310
7,965

1,990
¥ 86,250

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2021
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 interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

¥

Capital surplus

12,133¥Retained earnings

13,878

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

11,39911,399
(1)
31

(1)
22

8
441

－
12,133¥¥449
14,32779,097441

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 interest ofparent 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

¥

-6 -

1,178
470

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, 2021
Fiscal year ended March 31, 2021

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 interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

Thousands of U.S. Dollars (Note 1)
Shareholders’ equity
Capital stock

Capital surplus$$

109,597

Retained earnings

125,356$

Treasury stock

497,615$

Total shareholders’equity(18,114 )$(17,362)(17,362)

102,969

102,969
(13)
280

(13)
205

74
3,985

－
109,597

$

$

4,059
129,417714,455

3,985$

85,608583,224$

192(17,923)$

89,860804,315

Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive income

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 interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Total

Changes in
the fair valueof availablefor-salesecurities$

1

Deferred
gains orlosses onhedges$ 257

Foreigncurrencytranslation
adjustment

Remeasurement ofdefinedbenefitobligations$ (6,390 ) $ (1,207 )Total
accumulated
othercomprehen-sive income

Noncontrollinginterests

Total net
assets$ (7,338) $ 71,945 $ 779,062(17,362)
102,969
(13)
280
3,985

$

12,452

199

10,664

1,398

24,692(34,953)

14,432

12,452

199

10,664

1,398

24,692(34,953)

104,292

12,454$ 457$ 4,252$ 191

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

-7 -$ 17,354 $ 36,992 $ 858,662

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2021

Millions of Yen
2020
2021
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
Settlement received
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
Settlement package received
Estimated loss of funds from U.S. subsidiary
Others, net
Net cash provided by (used in) operating activities-8 -¥ 9,286
2,754
380
98
8
(1)
30
0
(469)
308
905
(43)
12
(78)
880
(498)
9,086
7,658
(6,667)(1,149)384(1,431)
266
93
2,106
(350)
23,571481(316)(1,829)498
0¥ 22,406¥ 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

Thousands of
U.S. Dollars(Note 1)2021
$ 130,722
28,613
17,107
1,034
(48)
101
225
14,521(3,731)
2,866
5,664
(5)
920
(833)
4,748
(71,930)
4,338(38,870)
27,074
13,512
7,613(1,464)(3,154)(1,482)(3,589)(10,897)
1,179
124,236
3,095(2,910)(29,764)(4,338)$ 90,318

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2021

Millions of Yen
2020
2021
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
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 -

¥

(893)
2,924
(3,276)271(355)(2,180)
651

¥

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

Thousands of
U.S. Dollars(Note 1)2021$

(8,178)
6,803(22,713)260(9,571)(15,252)
6,539

(321)

(351 )(3,174)-

2,707

24,455

(551)
1
(2)
59
(34)
41
(96)
108
(3,651)

(0 )
(11)
58
(77)
63
(267)
87
(2,453)

1
(106)
530
(699)
573
(2,415)786(22,160)(24,038)
20,266(1,312)(0)(2,056)(4,608)5,000(1,279)(1)(1,922)(41,628)
45,163(11,558)(13)(17,363)-(3,441)(31,085)(402)(7,544)(597)(6,851)(5,399)(61,887)(748)
10,461
32,231¥ 42,693

945
1,639
42,693¥ 44,333

8,539
14,810385,633$ 400,444

Kaga Electronics Co., Ltd. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
For the Year Ended March 31, 2021
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 withaccounting 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 not necessarily
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 made at the rateof ¥110.71 to $1, the rate of exchange at March 31, 2021. 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 (53 in
2020 and 61 in 2021) (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 five 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 thosecompanies 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 (15 in 2020 and 21 in 2021) 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, allof 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 aremeasured at fair value, and the related unrealized gains and losses are included in earnings, and(2) available-for-sale securities, which are measured at fair value, with unrealized gains and losses, net of
applicable taxes, reported in a component of other comprehensive income.
Non-marketable available-for-sale securities are stated at cost as determined by the moving-average method.
For other than temporary declines in fair value, investment securities are reduced to net realizable value 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 iscomputed substantially by the declining-balance method at rates based on the estimated useful lives of theassets, 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 by 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.

i.

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

j.

Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide for doubtful accounts principally at an amountbased 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.
-11 -

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 charged 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 areused.
(4) Assessment of hedge effectivenessHedge effectiveness is assessed by comparing the changing ratio of cash flows arising from the hedged
items to the hedging instruments during the periods from the respective start dates of the hedges to theassessment dates. In addition, regarding interest rate swaps, the Company omits assessment of hedge
effectiveness based upon the fulfillment of the requirements for specific matching criteria.

o.

Accounting for consumption tax
Consumption tax on goods and services is not included in the revenue and expense amounts.

p.

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

q.

Application of tax effect accounting for the transition from a consolidated tax payment system to a groupsummation system
As for the items subject to review in conjunction with the transition to the combined group taxation systemand the transition to the combined group taxation 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 AccountingStandard for Tax Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018) were not applied, andtherefore the amount of deferred tax assets and deferred tax liabilities were treated in accordance with theprovisions of the tax law before the revision in accordance with paragraph 3 of “Treatment of Deferred Tax
Assets and Deferred Tax Liabilities” (PITF No. 39, March 31, 2020).

-12 -

r.

Significant Accounting Estimates
1.
Estimation of allowance for doubtful accounts for a significant outstanding balance due from acustomer(1) Amount recorded in the consolidated financial statements for this fiscal year

Millions of Yen

Thousands of
U.S. Dollars¥ 4,307
1,750
1,750

$ 38,910
15,811
15,811

Total receivables
Allowance for doubtful accounts
Provision for allowance for doubtful accounts(2) Information on the nature of significant accounting estimates for identified items
For these receivables, the estimated uncollectible amount is recorded as allowance for doubtful accounts
using the cash flow estimation method. The allowance is estimated by taking into consideration theestimated cash flow forecast of the customer. The estimated uncollectible amount may increase or decreasedepending on the cash flow trends of the customer.
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

Thousands of
U.S. Dollars¥ 1,367525$ 12,353
4,748

Investment securities
Loss on valuation of investment securities(2)

Information on the nature of significant accounting estimates for identified items

With respect to unlisted securities stocks, 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 a valuation
loss when the real value has declined significantly. In particular, investments in venture companies are
sometimes acquired at a higher price than the net asset value, reflecting future economic benefits arisingfrom the investee’s operations. In light of the recent performance by the investee compared to the mediumto-long term business plan obtained at the time of acquisition and the reasonableness of future projections, if
the projected future economic benefits are no longer expected, a valuation loss is recorded if the actual value
considering the reduction in projected future economic benefits has significantly declined. In the event thatthe actual value considering the reduction in projected future economic benefits needs to be reviewed due touncertain future changes in the corporate environment, etc., additional losses may be incurred in thesubsequent consolidated fiscal year.
s.

Standards and Guidance not yet adopted
The following standards and guidance were issued but not yet adopted.
・ Accounting Standard for Revenue Recognition (ASBJ Statement No.29, issued by the AccountingStandards Board of Japan on March 31, 2020)
・ Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance
No.30, issued by the Accounting Standards Board of Japan on March 26, 2021)
・ Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ
Guidance No.19, March 31, 2020)(1) Overview
The International Accounting Standards Board (IASB) and the U.S Financial Accounting Standards
Board (FASB), which jointly developed comprehensive accounting standards for revenue recognition,
announced in May 2014 the release of their respective new revenue standards, both of which are named-13 -Revenue from Contracts with Customers (IASB: International Financial Reporting Standard 15 (IFRS
15); FASB: Topic 606). IFRS 15 is effective from annual reporting periods beginning on or afterJanuary 1, 2018; FASB Topic 606 is effective from annual reporting periods beginning after December
15, 2017. In light of this development, the Accounting Standards Board of Japan (ASBJ) developed andissued a comprehensive accounting standard for revenue recognition and its implementation guidance.
In developing the accounting standard for revenue recognition, the ASBJ retained as its basic policy theobjective of ensuring the comparability of financial statements, and as such established the standard todrive consistency with IFRS 15, starting by incorporating the basic principles of IFRS 15 and providing
some further accounting treatment provisions pertinent to the Japanese business environment, to theextent that these do not impair comparability.
(2) Effective date
To be applied from the beginning of the fiscal year ending March 31, 2022
(3) The impact of the adoption of the standard
The Company and its consolidated domestic subsidiaries are currently in the process of determining theimpact of this new standard on the consolidated financial statements.
Accounting Standard for Fair Value Measurement (ASBJ Statement No.30, July 4, 2019)
Accounting Standard for Measurement of Inventories (ASBJ Statement No.9, July 4, 2019)
Accounting Standard for Financial Instruments (ASBJ Statement No.10, July 4, 2019)
Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance
No.31, July 4, 2019)・ Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ
Guidance No.19, March 31, 2020)
・・・・(1) Overview
Under the circumstances that IASB and FASB have similar detailed guidance about fair value
measurement IFRS 13-Fair Value Measurement in IFRS and Topic 820 in the Accounting Standards
Codification-Fair Value Measurement in U.S. GAAP), ASBJ has made efforts to make the Japanesestandards consistent with international accounting standards, mainly regarding the guidance anddisclosure of the fair value of financial instruments and has issued.
From the viewpoint of improving the comparability of financial statements between domestic andoverseas companies by using a uniform calculation method as a basic policy for the development ofaccounting standards for fair value measurement, ASBJ has basically incorporated all the provisions of
IFRS 13 and has stipulated other treatments for individual items to the extent that comparability
between financial statements is not significantly impaired considering the practices that have been
conducted in Japan.
(2) Effective date
To be applied from the beginning of the fiscal year ending March 31, 2022
(3) The impact of the adoption of the standard
The Company and its consolidated domestic subsidiaries are currently in the process of determining theimpact of this new standard on the consolidated financial statements.
t.

Changes in presentation(Adoption of “Accounting Standard of Disclosure of Accounting Estimates”)
The "Accounting Standard of Disclosure of Accounting Estimates" (ASBJ Statement No. 31, March 31,2020) has been applied to the consolidated financial statements for this fiscal year, and notes regarding
significant accounting estimates are included in the consolidated financial statements. However, in the notes
to the financial statements, in accordance with the transitional treatment prescribed in the proviso ofparagraph 11 of the said accounting standard, the details related to the previous consolidated fiscal year are-14 -not described.
(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 basedon 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
2020
2021
Capital stock※2.

¥ 1,061

Thousands of
U.S. Dollars
2021¥ 1,022$9,236

Contingent liabilities
Contingent liabilities for guaranteed employees' loans amounted to ¥18 million and ¥12 million(US$ 111 thousands) as of March 31, 2020 and 2021, respectively.

※3.

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
2020
2021
2021
Total limit of contract
Loan balances
Available amounts

4.
※1.

¥
¥

15,00015,000¥ 15,000¥
1,000¥ 14,000$135,489$ 9,032$126,456

NOTES TO CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
Selling, general and administrative expenses
Major items and the amounts under “Selling, general and administrative expenses” are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2020
2021
2021
Salaries and bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Provision for directors’ bonuses
Provision for doubtful accounts※2.

¥

16,366
1,110
8
92
(39)

¥

16,682
1,172
12
128
90

$ 150,684
10,589
109
1,161
819

Research and development costs
Research and development costs charged to income are ¥185 million and ¥ 191million (US$ 1,728 thousands)
for the years ended March 31, 2020 and 2021, respectively.

-15 -

※3.

Gain on sales of property, plant and equipment
Details of gain on sales of property, plant and equipment are as follows:

Thousands of
U.S. Dollars
2021

Millions of Yen
2020
2021

※4.

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

¥

－
41
7
11

¥

－
0
2
－

$

－
3
21
－

Total

¥

61

¥

2

$

24

Loss on disposal of property, plant and equipment
Details of loss on disposal of property, plant and equipment are as follows:
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

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

¥

0
3
7
1

¥

63
15
10
12

$

569
138
97
114

Total

¥

12

¥

101

$

920

※5.
Impairment loss
For the year ended March 31, 2020
The description is not presented due to its insignificance.
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 Impairment losses
Segment(Millions of Yen)
(Thousands of
U.S. Dollars)
San Luis Potosi Business Buildings and structures468
4,228Electronic
Mexicoproperty
Machinery, equipment and vehicles
993
8,978Components
Tools, furniture and fixtures
24
217
Hung Yen
Business Buildings and structures
65
594Electronic
Province,
property
Machinery, equipment and vehicles
106962Components
VietnamTools, furniture and fixtures10
97
Construction in progress48
439
Software0
3
Other (Investments and other assets)49
448
Chiyoda-ku,
Business Tools, furniture and fixtures
13
124Electronic
Tokyo, Japan
property
Software53
484Components
Other (Intangible assets)
1
14
Other (Investments and other assets)
1
10
Chiyoda-ku,
Business Buildings and structures
37
340OtherTokyo, Japan
property
Tools, furniture and fixtures
15
140
Software1
15
Chiyoda-ku,
Idle
Tools, furniture and fixtures
0
4Electronic
Tokyo, Japan
property
Components

The Group recognizes impairment loss by grouping assets based on the company to which the asset belongs and-16 -by grouping idle assets by individual projects. The assets are imparied from the carrying amount to therecoverable amount when the profitability delines. 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.
※6.

Amount of reclassification and income tax effect associated with other comprehensive income
Millions of Yen
2020
2021
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
TaxDeferred 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

-17 -

¥

¥

(1,174)(115)(1,289)271¥

Thousands of
U.S. Dollars
2021

1,826
121
1,947
(570)

$

16,494
1,097
17,952(5,155 )(1,018)1,376

12,436

40
(2)
37
(11)
26

49
(40)
9
13
22

446
(362)
83
121
205

(1,260)(1,260)

1,205
12
1,218

10,889114
11,004

47
51
98
(30)
68

146
43
189
(50)
138

1,322
392
1,715
(460)
1,254

(104)
(2,288)

¥

42
2,799

$

381
25,282

5.

NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended March 31, 2020
1. Type and number of issued shares of common stock and treasury stock
Number of shares
as of April 1, 2019

Increase in thenumber of shares

Decrease in thenumber of shares

Number of shares
as of March 31, 2020

Number of outstanding shares
Common stock

28,702,118－－

28,702,118

1,254,924

358

12,003

1,243,279

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 fractional share repurchases: 358 shares
Decrease as a result of the disposition of fractional share: 42 shares
Decrease as a result of the payment of restricted stock to our directors: 11,900 sharesCompany's portion of treasury shares (shares of the company) held by an equity-method associate: 61 shares

2. Dividends(1) Dividends paid
Resolution

Type of share

General shareholders’meeting held on June Common stock27, 2019
Board of Directors'
meeting held on
Common stock
November 7, 2019

Amount of dividends(Millions of yen)

Dividend per share(Yen)

Record date

Effective date

March 31, 2019

June 28, 2019

1,235
(US$11,350 thousand)45(US$0.41)

823(US$7,566 thousand)30
September 30, 2019
(US$0.27)

December 6, 2019(2) Dividends whose effective date is after March 31, 2020 with record date during the year ended March 31,
2020.
Resolution

Generalshareholders’meeting held on
June 26, 2020

Type of share

Common stock

Amount of dividends(Millions of yen)

Source ofdividends

1,098 Retained(US$10,093 thousand)earnings-18 -Dividend per share(Yen)

Record date40
March 31, 2020
(US$0.36)

Effective dateJune 29, 2020

For 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

Number of outstanding shares
Common stock

28,702,118－－

28,702,118

1,243,279

698

14,1001,229,877

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 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

Type of share

General shareholders’meeting held on June Common stock
26, 2020
Board of Directors'
meeting held on
Common stock
November 5, 2020

Amount of dividends(Millions of yen)

Dividend per share(Yen)

Record date

Effective date

March 31, 2020

June 29, 2020

1,098
(US$9,921 thousand)40(US$0.36)

823(US$7,441 thousand)30
September 30, 2020
(US$0.27)

December 4, 2020

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

Generalshareholders’meeting held on
June 29, 2021

Type of share

Common stock

Amount of dividends(Millions of yen)

Source ofdividends

1,373 Retained(US$12,408 thousand)earnings-19 -Dividend per share(Yen)

Record date

50
March 31, 2021
(US$0.45)

Effective dateJune 30, 2021

6.

NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS※1. Cash and cash equivalents at March 31, 2020 and 2021 are reconciled to the accounts reported in the
consolidated balance sheet as follows:
Thousands ofMillions of Yen
U.S. Dollars
2020
2021
2021
Cash and bank deposits
Time deposits with a deposit period of more than 3 months¥ 43,384(691)¥ 45,636(1,303)$ 412,218(11,774)

Cash and cash equivalents¥ 42,693¥ 44,333$ 400,444※2.

Major breakdown of assets and liabilities of a company that became a new consolidated subsidiary due to theacquisition of shares in the current fiscal year.
Breakdown of assets and liabilities at the start of consolidation as a result of the consolidation of Excel Co.,
Ltd. (hereinafter “Excel”) as well as the relationship between the acquisition price of Excel shares and the net
expenditures for the acquisition of Excel is as follows.

Current Assets
Non Current Assets
Current Liabilities
Non Current Liabilities
Negative goodwill
Acquisition cost of Excel
Cash and cash equivalents of Excel
Deduction: Purchase of shares of Excel

7.

Millionsof YenThousands of
U.S. Dollars¥ 24,358
1,636(17,281)(361)(7,963)389(3,096)2,707$ 220,023
14,781(156,097)(3,261)(71,930)
3,516(27,971)
24,455LEASES
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, 2020 and 2021 were as follows:
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Due within one year
Due after one year

¥

19
23

¥

17
7

$

155
65

Total

¥

42

¥

24

$

220

-20 -

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) 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.
Cash and cash equivalents, receivables and payables, short-term bank loans, accrued expenses, income
taxes payables
The carrying value of the above accounts approximate fair value because of their short maturities.
Guarantee deposits
The fair value of guaranteed deposits is calculated by the contract amount the supplier presented or
calculated from past experience and discounted at a risk free rate.
Marketable and investment securities
The fair values of marketable and investment securities are measured at the quoted market price for theequity instruments, and at the quoted price obtained from the financial institution for certain debt
instruments. The information of the fair value for the marketable and investment securities by classification
is included in Note 9.
Long-term loans payable
The fair value of long-term loans payable is determined by discounting the cash flows related to the debt at
the Group's assumed corporate borrowing rate.
Derivatives
The information of the fair value for derivatives is included in Note 10.
-21 -(a) Fair Value of Financial Instruments
Carrying
AmountMarch 31, 2020
Cash and bank deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※1

Millions of Yen
Fair
Value

Unrealized
Loss¥¥ 43,384

Short-term investment securities
Investment securities
Guarantee deposits¥ 43,384
85,4955,876(188)
91,183
254
6,449
529

91,183
254
6,449
365

－
－
－
(164 )

Total¥141,801¥141,637¥ (164 )Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Long-term loans payable¥ 70,188
6,540
5,739
1,884
20,833¥ 70,188
6,540
5,739
1,884
20,882¥

Total¥105,186¥105,235¥ (49 )

Derivatives ※2

¥

¥

¥

34

34

－

－
－
－
－
(49 )

－

※1 Allowance for doubtful accounts is deducted from Notes and accounts receivable - trade andelectronically recorded monetary claims.
※2 The value of assets and liabilities arising from derivatives is shown at net value.
Millions of Yen
Carrying
Fair
Unrealized
March 31, 2021
AmountValue
Loss
Cash and bank deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※1¥¥ 45,636

Short-term investment securities
Investment securities
Guarantee deposits¥ 45,636
103,773
4,621(2,024)
106,370
302
8,229
517

106,370
302
8,229
359

－
－
－
(157 )

Total¥161,056¥160,898¥ (157 )Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Long-term loans payable¥ 79,854
10,8005,957
2,136
25,166¥ 79,854
10,8005,957
2,136
25,158

¥

－
－
－
－
7

Total

¥123,915¥123,907¥

7

Derivatives ※2

¥

¥

¥

－

27

27

－

※1 Allowance for doubtful accounts is deducted from Notes and accounts receivable-trade andelectronically recorded monetary claims.
※2 The value of assets and liabilities arising from derivatives is shown at net value.
Thousands of U.S. Dollars
Carrying
Fair
Unrealized
Amount
Value
Loss
-22 -

Cash and bank deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims
Allowance for doubtful accounts ※1$

Short-term investment securities
Investment securities
Guarantee deposits

412,218
937,345
41,741(18,288)960,799
2,736
74,331
4,670$$

412,218－

960,799
2,736
74,331
3,251－－－(1,418)

Total$ 1,454,755$ 1,453,337$ (1,418)

Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Long-term loans payable$$

721,292
97,55853,80919,298227,251

$

－
－
－
－
67

Total

$ 1,119,277$ 1,119,209$

67

Derivatives ※2

$

$

$

－

721,292
97,55853,80919,298227,318252

252※1 Allowance for doubtful accounts is deducted from Notes and accounts receivable-trade andelectronically recorded monetary claims.
※2 The value of assets and liabilities arising from derivatives is shown at net value.
(b) Financial Instruments whose Fair Value cannot be reliably determined
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2020
2021
2021
Shares of subsidiaries and related companies
Investments in equity instruments that
do not have a quoted market price inan active market
Guarantee deposits that do not have aquoted market price in an active market(5)¥ 1,061¥ 1,022

$

9,236

¥

991

¥ 1,519

13,728

327

414

3,742

Redemption Schedule of Monetary Assets and Securities with Contractual Maturities
March 31, 2020

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¥
43,384－－－
Notes and accounts receivable-trade85,495
Electronically recorded monetary－－－claims5,876－－
Investment securities with maturities
16
107
Guarantee deposits
38
134
1
191
Total

¥

134,811

-23 -

¥

241

¥

1

¥

191

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

¥

¥

248

－

¥

191

Thousands of U.S. Dollars
Over 1 year
Over 5 years
Within 1 year within 5 years within 10 years Over 10 years
$
－
$
－
$
－
Cash and bank deposits$ 412,218－－－
Notes and accounts receivable-trade937,345
Electronically recorded monetary－－－claims41,741－－
Investment securities with maturities
150
1,034
－
Guarantee deposits
341
1,211
1,725
Total
(6)

$ 1,391,796

$

$

2,245

－

$

1,725

The payment schedule for bonds, long-term loans, lease obligations and other interest-bearing
liabilities by payment due date at March 31, 2020 and 2021 is as follows:

March 31, 2020
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable
Total

Millions of Yen

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years¥ 5,260 ¥

－ ¥

－ ¥

－ ¥

1,279
¥ 6,540 ¥

668
668 ¥

5,032
5,032 ¥

5,032
5,032 ¥March 31, 2021
Within1 yearShort-term loans
Long-term loans
Including current portion of longterm loans payable
Total

－ ¥

－ ¥

668
¥ 10,800 ¥

5,033
5,033 ¥

5,033
5,033 ¥

5,100
5,100 ¥

Over
5 years－ ¥Thousands of U.S. Dollars

－ $

－ $

Over
5 years

Short-term loans
Long-term loans
Including current portion of longterm loans payable$ 91,518 $
6,040

45,46345,46346,06645,16345,163

Total$ 97,558 $

45,463 $45,463 $46,066 $45,163 $45,163

-24 -

－ $

－

5,000
5,000
5,000 ¥ 5,000

Over 1 year Over 2 years Over 3 years Over 4 years
within 2 years within 3 years within 4 years within 5 years

－ $

－

5,100
5,000
5,100 ¥ 5,000

Millions of Yen－ ¥Within1 year－ ¥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 ¥Over
5 years－

9.

MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of March 31, 2020 and 2021 consisted of the following:(1) Current-Marketable equity securities

Unrealized gains included in net income forthe year

2020¥

Millions of Yen

Thousands of
U.S. Dollars
2021

2021

(7)

¥

48

$

441)

(2) Investment securities with a readily determinable fair value
March 31, 2020

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¥ 2,480
10160¥ 2,651¥ 1,18010149¥ 1,339

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

2,874
97
825
¥ 3,797¥ 6,449

Total

Difference

¥
¥

1,300
0
10
1,311

3,597
102
997
¥ 4,697

¥

(722)
(4)
(172)
(899)

¥ 6,037

¥

411

Note:
Non-marketable equity securities of ¥838 million, Investments in associated companies of ¥152 million, andShares of subsidiaries and related companies of ¥ 1,061 million are not included in the above due to difficultyin estimating fair value as market price is not available.
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

-25 -

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

2,425

3,224

Difference

¥
¥

2,591
2
387
2,980

(799)

－

－

－

339
¥ 2,764356¥ 3,580

¥

(17)
(816)

¥ 8,229¥ 6,064¥

2,164

Thousands of
U.S. Dollars
Acquisition
cost

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

Difference$ 38,269
1,034
10,057$ 49,361$ 14,864
1,015
6,555
$ 22,435$ 23,405
18
3,502$ 26,926

21,90629,127(7,220)

－

－

－

3,062
$ 24,969

3,216$ 32,343$(153)(7,374)$ 74,331$ 54,779$ 19,552

Note:
Non-marketable equity securities of ¥1,367 million (US$ 12,353 thousands), Investments in associatedcompanies of ¥152 million (US$ 1,375 thousands), and Shares of subsidiaries and related companies of¥ 1,022 million (US$ 9,236 thousands) are not included in the above due to difficulty in estimating fair value
as market price is not available.
(3) Investment securities sold during 2020 and 2021
March 31, 2020

Millions of Yen
Amounts soldInvestment securities
Government and corporate bonds
Others
Total¥

Gains on sales
218
－
294
513

¥

March 31, 2021

135
－
－
135

¥

¥

(39)
－
(17)
(57)

¥

Millions of Yen
Amounts soldInvestment securities
Government and corporate bonds
Others
Total¥

Loss on sales¥

Gains on sales
235
－
273
509

¥

¥

Loss on sales
128
－
－
128

¥

¥

－
－
(36)
(36)

¥

Thousands of
U.S. Dollars
Amounts soldInvestment securities
Government and corporate bonds
Others
Total$$

Gains on sales

2,124
－
2,474
4,599

$

$

Loss on sales
$

1,164
－
－
1,164

$

(4) Impairment losses recognized on Investment securities are as follows:

Thousands of
U.S. Dollars

Millions of Yen
2020

2021
¥

-26 -

880

－
－
(330)
(330)

2021
¥

525

$

4,748

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

March 31, 2020

Hedged Item

Millions of Yen
Contract
AmountContract
Due after
AmountOne Year

Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying CNY

Receivables
Receivables
PayablesPayables¥ 2,788
36
2,551
1

¥

－
－
－
－

¥

(10)
(0)
45
(0)

¥ 5,377

¥

－

¥

34

Total

Fair
Value

March 31, 2021

Hedged Item

Millions of Yen
Contract
AmountContract
Due after
AmountOne Year

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

Total

Foreign currency forward contracts:
Selling USD
Selling CNY
Buying USD
Buying CNY
Buying EUR

Fair
Value

Hedged Item

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

Receivables
Receivables
PayablesPayablesPayables$ 40,735
1,078
20,612
4
2

$

－
－
－
－
－

$ (550)
(43)
918
0
(0)

$ 62,434

$

－

$

Total

324

The fair value of derivative transactions is measured at the quoted price obtained from the financial institutions.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group's exposure to credit or market risk.

-27 -(2) Interest related transactions
For the year ended March 31, 2020
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

Fair
Value

¥

¥

(Note)

13,481

13,093

Note:
Specific matching criteria for interest rate swap is accounted for together with long-term loans payable designatedas 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, 2021
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
Fair
Due after
AmountOne YearValue¥ 13,093($ 118,270)¥ 12,900($ 116,520)(Note)

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

-28 -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, 2020 and 2021 (excluding
plans applying the simplified method) are as follows:
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Retirement benefit obligation at the beginning of the year
Increase from newly consolidated subsidiary
Service cost
Interest cost
Actuarial gains (losses)
Benefits paid
Others¥ 6,760
－
452
24
(75)
(216)
26

¥ 6,971
879
482
40
(61)
(330)
4

$ 62,967
7,941
4,361
370
(557)
(2,986)39

Retirement benefit obligation at the end of the year

¥ 6,971¥ 7,987$ 72,144(b) Changes in the plan assets for the years ended March 31, 2020 and 2021 (excluding plans applying thesimplified method) are as follows:
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

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¥ 5,918
－
112
(25)
443
(216)
41

¥ 6,274
611
125
129
406
(238)
2

$ 56,673
5,519
1,137
1,165
3,674
(2,156)22

Plan assets at fair value at the end of the year

¥ 6,274¥ 7,310$ 66,036(c) Changes in net defined benefit liabilities for plans which applied the simplified method for the years
ended March 31, 2020 and 2021 are as follows:
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

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¥ 1,155
46
175
(110)
(14)
－

¥ 1,252
254
247
(91)
(90)
(7)

$ 11,313
2.302
2,239
(828)
(815)
(68)

Net defined benefit liabilities at the end of the year

¥ 1,252¥ 1,565$ 14,143-29 -(d) Reconciliation between the funded status of the plans (retirement benefit obligation and plan assets) and theamounts recognized in the consolidated balance sheet (net defined benefit liabilities and net defined benefit
assets) as of March 31, 2020 and 2021 are as follows:
Millions of Yen
2020
2021
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

Thousands of
U.S. Dollars
2021¥ 7,452(6,409)1,042
906¥ 9,166(8,090)
1,076
1,166

$ 82,798(73,078)
9,720
10,532¥ 1,949¥ 2,242$ 20,252

1,949

2,242

20,252¥ 1,949¥ 2,242$ 20,252(e) Components of retirement benefit expenses for the years ended March 31, 2020 and 2021 are as follows:
Millions of Yen
2020
2021
Service cost
¥ 452
Interest cost
24
Expected return on plan assets(112)
Amortization of actuarial loss
48
Redundancy pay
15
Retirement benefit expenses calculated based on the simplified
method175
Others26¥

Retirement benefit expenses for defined benefit pension plans ¥

¥

630

488
40
(125)
43
21

Thousands of
U.S. Dollars
2021
$

4,415
370
(1,134)
394
192

247
9
727

2,239
82
$

6,567

(f) Remeasurements of defined benefit plans, net of tax for the years ended March 31, 2020 and 2021 are as
follows:
Components of remeasurements of defined benefit obligations, net of tax before income tax effectadjustment
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Prior service cost
Actuarial gains and losses

¥

－
98

¥

－
189

$

Total

¥

98

¥

189

$ 1,715

-30 -

－
1,715

(g) Remeasurements of defined benefit obligations as of March 31, 2020 and 2021 are as follows:
Components of remeasurements of accumulated defined benefit obligations before income tax effectadjustment
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Unrecognized prior service cost
Unrecognized actuarial gains or losses

¥

－
211

¥

－
18

$

－
166

Total

¥

211

¥

18

$

166

(h) Items for plan assets
Components of plan assets
Ratio of primary components to total plan assets

2020

2021

General accounts
Other

78.02%
21.98%

79.39%
20.61%

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
2020
2021
0.42～0.46%
0.46～0.67%
Discount rate
1.20～2.50%
0.87～2.50%
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
2020
2021
2021
¥

-31 -

609

¥

610

$ 5,514

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, 2020 and 2021 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2020
2021
2021
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

¥

750
29
401
206
758
588
1,582
337
256
105
1,748
6,765
(1,149)(2,629)(3,778)

¥

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

$

7,659
299
3,624
6,534
6,899
6,419
22,783
2,533
7,269
962
20,04685,033(10,530)(35,225)(45,756 )Deferred tax assets—total

2,986

4,348

39,277

Deferred tax liabilities:
Undistributed earnings of overseas subsidiaries
Unrealized gain on property and equipment
Unrealized gain on available-for-sale securities
Advanced depreciation on fixed assets
Others(2,018 )(116 )(402 )(187 )(55 )(2,267 )(101 )(972 )(179 )(258 )(20,480)(921)(8,788)(1,623)(2,339)Deferred tax liabilities—total(2,780 )(3,781 )(34,153)

Net deferred tax assets

¥

205

¥

567

$

5,124

(Note)
1. Tax loss carryforwards and the amount of deferred tax assets by carry forward
March 31, 2020

Tax loss carryforwards※
Less valuation allowance
Deferred tax assets

Within1 year

¥

17
(17)
－

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 1 year
within 2 years

Over 2 years
within 3 years

¥

102
(102)
－

¥

118
(111)
6

March 31, 2021

Tax loss carryforwards※
Less valuation allowance
Deferred tax assets

Within1 year

¥

102
(102)
－

¥

118
(112)
6

¥

124
(71)
53

Millions of Yen
Over 3 years
within 4 years

¥

155
(75)
80

Millions of Yen
Over 3 years
within 4 years

¥

92
(71)
21

Over 4 years
within 5 years

¥

171
(131)
39

Over 4 years
within 5 years

¥

135
(109)
25

Over
5 years

¥

1,017
(710)
307

Over
5 years

¥

1,948
(698)
1,249

¥

¥

Total

1,582
(1,149)
433

Total

2,522
(1,165)
1,356

Thousands of U.S. Dollars
WithinOver 1 year

Over 2 years-32 -Over 3 years

Over 4 years

Over

Total

1 yearwithin 2 years

within 3 years

within 4 years

Tax loss carryforwards※
$
924 $
1,073
$
1,128
$
837
Less valuation allowance(924)(1,018)
(647)
(641)
－
Deferred tax assets
55
481
195
※Tax loss carryforwards are multiplied by the effective statutory tax rate.

within 5 years

$

1,221
(988)
233

5 years$

17,598(6,311)
11,286$(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, 2020 and 2021 is asfollows:
2020

2021

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%
1.4
0.1
(9.1)

30.6%
0.3
7.5
(4.9)

2.5
4.8
3.0
－
(1.1)

2.2
(0.4)
1.3
(16.8)
2.0

Actual effective tax rate

32.2

21.8

13.

BUSINESS COMBINATIONS

1.
2.

Overview of Business Combination(1) Name of Acquired Company and Description of its Business
Name of Acquired Company: Excel Co., Ltd.
Description of its Business: Sales, import and export of liquid-crystal display (“LCD”) devices, ICs,
semiconductor devices, or other electronic components and devices etc.
(2) Reason for the business combination
Since our establishment, our business has expanded to respond to the various needs of our customers
based on the “Everything we do is for our customers” business philosophy. The business domain
includes the sale of electronic components and semiconductors as an independent electronics general
trading company, and the Electronic Manufacturing Services (EMS) business that specializes in a wide
variety of high mix and low volume products as well as the information equipment business. We offer avariety of services both domestically and abroad.
On the other hand, the electronic trading companies are in a business environment where on the supplierside, the semiconductor and devices makers are consolidating and restructuring their business by
rebuilding the policy of their distribution agents, while on the customer side, the set makers aretransferring their manufacturing plants of finished goods assembly to overseas, impacted by the treaty
policy between the US and China and other uncertainties of the world economy, such as the changes indomestic and overseas demands, frequent price fluctuations, and the shortened life cycle of products due
to technology innovation. Furthermore, with accelerated changes of the business environment andnumerous competitors in the industry, the Company realized that the competition to survive becomesincreasingly severe. .
Under these circumstances, the Company formulated “Mid-term Business Plan 2021” (announced on
November 6, 2018), and featured “To become ‘Japan’s No.1 corporate group in the industry” andfurthermore “To aim to become a competitive world class company” as mid-and long term management
vision by establishing “profit-oriented management”. We are working to strengthen our revenue base,stabilize our management base and create new businesses. InJanuary. 2019, we acquired FujitsuElectronics, the core trading company of Fujitsu Group and expanded our trading company business. In
addition, we acquired Towada Pioneer Corporation (Now Kaga EMS Towada CO.,LTD.) to strengthen
the manufacturing business. Recently, we decided to acquire Excel CO., LTD based on the stocktransfer contract with City Index Eleventh Co., to execute our growth strategy. Excel Co., LTD’
-33 -22,783(10,530)
12,252

suppliers in Japan and overseas, where they have strength in the field of LCD devices, and its customers
in China contributed to the development of our growth strategy.
By welcoming Excel, who deals with electronic devices including LCD, semiconductors and integrated
circuits, to our group, we expect the following merits:(a) Expansion of share in the electronic components and semiconductor business
By complementing our trading products and sales channels, we expect synergies and aim tostrengthen our ability to respond to customer needs and expand our share in the electronic
components and semiconductor markets. Specifically, we can sell to our customers more LCD
products where Excel has its strength or we can sell our products to Excel’s customers in China.
(b) Expansion of EMS business scale
By sharing our global network of EMS bases and expanding it to Excel’s customers, we aim to makeour EMS business more profitable.
(c) Acquisition of new business.
By taking in Excel Co. LTD’s promising business such as business related to EV, we accelerate tocommercialize these businesses with our group’s overall competitiveness.
(d) Further improvement of management efficiency associated with business collaboration between thetwo companies
We will improve the profitability of both companies by optimizing the sales-related functions of theCompany and Excel and maximizing the mutual utilization.
Through the acquisition of these shares, we now solidified its position as “Japan’s No. 1 corporate group in
the industry” as targeted in the medium-term management plan. We will continue to improve the scale andquality of our management group in order to grow further as a “global-class company” that can compete withthe trillion-yen competitors from overseas.
(3) Business combination date
April 1, 2020
(4) Legal form of business combination
Acquisition of shares for cash consideration(5) Name of company after combination
EXCEL CO., LTD.
(6) Ratio of voting rights acquired
100.0%(7) Main reasons for deciding on the acquirer
Because the Company acquired shares for cash
3.
4.
5.
6.

Period of performance of acquired company included in consolidated financial statements
From April 1, 2020 to March 31, 2021
Breakdown of acquisition costs and types of consideration for acquired company
Acquisition price Cash ￥389 million (US$ 3,516 thousands)
Content and amount of major acquisition-related expenses
Remuneration, fee, etc. for Advisory ￥176 million (US$ 1,596 thousands)
Amount and cause of gain on bargain purchase(1) Amount of gain on bargain purchase￥7,963 million (US$ 71,930 thousands)
The Company recorded an adjustment to the provisional amounts by the end of this fiscal year. Therefore,
the provisional gain on bargain purchase of ¥8,007 million ($72,331 thousand) was reduced by ¥44 million($401 thousand) to ¥7,963 million ($71,930 thousand).
(2) Reason of occurrence
As the market value of net assets at the time of acquisition of shares exceeded the acquisition cost, thedifference was recognized as gain on bargain purchase.

7.

Amount of assets acquired and liabilities assumed on business combination date and main breakdown
Current assets￥24,358 million (US$ 220,023 thousands)
Noncurrent assets
1,636 million (14,781 thousands)-34 -Total assets
Current liabilities
Noncurrent Liabilities
Total Liabilities
14.

25,995 million (17,281 million (361 million (17,642 million (234,805 thousands)
156,097 thousands)
3,261 thousands)
159,358 thousands)

SEGMENT INFORMATION(1) Description of reportable segments
The Group's reportable segments are those for which separate financial information is available and regular
evaluation by the Company's management is being performed in order to decide how resources areallocated 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 of semiconductors, generalelectronic components and other products, the electronics manufacturing service (EMS), and otheractivities. The information equipment segment includes sales of PCs, PC peripherals, photograph andimaging 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".
(3)

Information about sales, profit (loss), assets and other items is as follows:
Millions of Yen
2020
Reportable Segment

Sales:
Sales toexternal customers
Inter segment sales
or transfers
Total sales

Electronic
Components
¥

Other

Total

Reconciliations(Note 1)

43,466 ¥ 2,778 ¥

19,781 ¥443,615

¥

1,745

3,514

8,362

Information
Equipment

377,587 ¥2,337

Software765－

Consolidated(Note 2)¥

(8,362)443,615－¥

379,925 ¥45,211 ¥ 3,544 ¥

23,295 ¥451,977¥(8,362)¥443,615

Segment profit (loss)¥
Segment assets
Others:Depreciation
Increase in property,
plant and equipment
and intangible assets

7,503 ¥
187,750

1,707 ¥
236 ¥
16,575
1,799

452 ¥
12,0169,900
218,141¥

114(10,503)¥

10,014
207,638

1,883

54

48

145

2,132

(6)

2,125

2,774

144

21

813

3,754

(123)

3,631

-35 -

Millions of Yen
2021
Reportable Segment

Sales:
Sales toexternal customers
Inter segment sales
or transfers
Total sales

Electronic
Components
¥

Other

Total

Reconciliations(Note 1)

48,389 ¥ 2,932 ¥

17,589 ¥422,365

¥

4,251

4,714

13,166(13,166)

Information
Equipment

353,454 ¥3,022

Software

1,178－

Consolidated(Note 2)¥

422,365－¥

356,476 ¥

52,640 ¥ 4,111 ¥

22,303 ¥435,532¥ (13,166)¥

422,365

Segment profit (loss)¥
Segment assets
Others:Depreciation
Increase in-property,
plant and equipment
and intangible assets

8,151 ¥
215,323

2,482 ¥
263 ¥
18,3682,076

474 ¥
11,142

11,371
246,911¥¥

11,467
237,004

2,273

51

56

156

2,537

(7)

2,530

3,139

281

93

183

3,698

(124)

3,574

Thousands of U.S. Dollars
2021
Reportable Segment

Sales:
Sales toexternal customers
Inter segment sales
or transfers
Total sales

95(9,906)

Electronic
Components

Information
Equipment$ 3,192,615 $
27,300$ 3,219,915 $Segment profit (loss)$
73,628 $Segment assets
1,944,937
Others:Depreciation
20,534
Increase in-property,
plant and equipment
and intangible assets
28,358

Software

Other

Reconciliations(Note 1)

Total

437,081 $ 26,490 $ 158,876 $ 3,815,063 $Consolidated(Note 2)－

$ 3,815,063(118,927)－

475,481 $ 37,136 $ 201,457 $ 3,933,990 $ (118,927)$ 3,815,063

22,421 $ 2,380 $4,285 $ 102,715 $
165,91718,758100,643
2,230,256$

38,39910,64642,580118,927863(89,485)

103,578
2,140,771

461

511

1,414

22,923(68)

22,855

2,538

846

1,661

33,405(1,120)32,284

Note: 1. The adjustment for segment operating income is as follows:(1) Segment income
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Elimination of inter-segment trade
Amortization of goodwill

¥ 114
－

¥

95
－

$

863
－

Total

¥ 114

¥

95

$

863

-36 -

(2) Segment assets
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Elimination of inter-segment trade
Reconciliations¥ (12,507)
2,004¥ (12,168)
2,261$ (109,909)
20,424Total¥ (10,503)¥$(9,906 )(89,485)

Note: Total corporate assets principally consist of surplus funds of the Companies under management (cashand securities).
(3) Depreciation and amortization
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Elimination of inter-segment trade

¥ (6)

¥ (7)

$

(68)

Total

¥ (6)

¥ (7)

$

(68)

(4) Increase amount of tangible and intangible fixed assets
Millions of Yen
2020
2021

Thousands of
U.S. Dollars
2021

Elimination of inter-segment trade

¥

(123)

¥ (124)$ (1,120)

Total

¥

(123)

¥ (124)$ (1,120)

2. Segment income is adjusted for operating income in the consolidated statement of income andcomprehensive income.
Associated Information
For the year ended March 31, 2020
(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) SalesJapan¥ 270,585

North America¥

Millions of Yen
2020
Europe

Asia

Total

¥ 20,019¥ 126,115¥ 443,615

26,894

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

-37 -(b) Property, plant and equipment

Japan

North America¥11,254¥ 983

Notes:

Millions of Yen
2020
Europe

Asia

¥ 174

¥

5,561

Total
¥ 17,974

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:(3) Information about major customers

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

This information is not presented because no sales to any individual customer were more than 10% ofconsolidated sales.
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¥ 13,622Japan$ 2,169,994

Asia

Total

¥ 145,804¥ 422,365

Asia

Total

$ 1,316,992$ 3,815,063

Thousands of U.S. Dollars
2021
North America
Europe$ 205,027$ 123,048

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

Japan

North America¥11,688

¥ 114

Japan

North America$ 105,577$ 1,038

Millions of Yen
2021
Europe¥ 158
Thousands of U.S. Dollars
2021
Europe$ 1,431
-38 -

Asia
¥

6,263

Total
¥ 18,225

Asia

Total

$ 56,574$ 164,621

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.
Information of impairment loss on fixed assets of reportable segments
For the year ended March 31, 2020

Impairment loss

Millions of Yen
2020
Reportable Segment
Information
SoftEquipment
ware
¥ －
¥ －

Other
¥ 135

Total
¥ 380

Electronic
Components¥ 1,838

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

Other
¥ 55

Total
¥ 1,893

Electronic
Components$ 16,609

Thousands of U.S. Dollars
2021
Reportable Segment
Information
SoftEquipment
ware
Other
$ －
$ －
$ 497

Total
$ 17,107

Electronic
Components¥ 245

For the year ended March 31, 2021

Impairment loss

Impairment loss

Information of amortization of goodwill and balance of goodwill of reportable segments
For the year ended March 31, 2020

Electronic
Components
Amortization of goodwill¥ 97
for fiscal year
Balance of goodwill at the322
end of fiscal year

Millions of Yen
Reportable Segment
Information
SoftEquipment
ware
Other

Total

Reconciliations

Consolidated

¥ －

¥ 1

¥ －

¥ 98

¥ －

¥ 98

－

－

－

322

－

322

-39 -

For the year ended March 31, 2021

Electronic
Components
Amortization of goodwill
for fiscal year
¥ 114
Balance of goodwill at theend of fiscal year
209

Electronic
Components
Amortization of goodwill
for fiscal year
$ 1,034
Balance of goodwill at theend of fiscal year
1,889

Millions of Yen
Reportable Segment
Information
SoftEquipment
Ware
Other

Reconciliations

Total

Consolidated

¥ －

¥ －

¥ －

¥ 114

¥ －

¥ 114

－

－

－

209

－

209

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

Reconciliations

Consolidated

$ －

$ －

$ －

$ 1,034$ －$ 1,034

－

－

－

1,889

－

1,889

Information of gain on negative goodwill by reportable segments
For the year ended March 31, 2020
No significant items to be reported.
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
15. RELATED PARTY TRANSACTIONS(1) Principal transactions between the Company and its related party
For the year ended March 31, 2020
Principal transactions between the Company and its related party for the year ended March 31, 2020 are
summarized as follows:

Type

Major
stockholder

Company
Name

Head
OfficeSankyo Co., Shibuya-ku,
Ltd.
Tokyo

CapitalStockBusiness
Activities

Percentage
for Possession of
Voting Rights¥14,840

Manufacturing and salesof gamemachines

Owned
directly
13.95%

RelationshipWith Related
Party

Content ofTransaction

Sales of finished
Sales of finishedproducts
products(Note)(Amount unit: Millions of yen)Amount as ofAmount for
Title of Account March 31,
Transaction
2020¥6,344

Electronicall-yrecordedmonetary claims
Accounts
receivable¥1,311¥2,026Note:
Trade condition and policy
Sales contracts are entered into between Sankyo and the Company, and the sales price of products is determinedbased on the discussions between those two parties.
For the year ended March 31, 2021
The description is not presented due to its insignificance.

-40 -(2) Principal transactions between the Company’s director and its related party
For the year ended March 31, 2020
Principal transactions between the Company’s director and its related party for the year ended March 31, 2020are summarized as follows:Type
Majority
owned
company by adirector andthe director’s
relatives(Amount unit: Millions of yen)Amount as of
Title of Account March 31,
2020

Company
Name orDirector Name

Head
OfficeCapitalStockBusiness
Activities or
Occupation

Percentage
for Possession of
Voting Rights

RelationshipWith Related
Party

Content ofTransaction

Amount forTransaction

KGF CO.,LTD.

Chiyoda-ku,
Tokyo

¥74

Management ofrestaurant andconvenience
store

－

Interlocking
directorate

Purchasing gifts(Note)¥13－－

Note: The Company concluded the contract transaction at a price equivalent to market price.
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:Type
Majority
owned
company by adirector andthe director’s
relatives

Company
Name orDirector Name

Head
OfficeCapitalStockBusiness
Activities or
Occupation

Percentage
for Possession of
Voting Rights

RelationshipWith Related
Party

KGF CO.,LTD.

Chiyoda-ku,
Tokyo

¥10
($90)

Management ofrestaurant andconvenience
store

－

Interlocking
directorate(Amount unit: Millions of yen, Thousands of U.S. dollars)
Amount as ofContent of
Amount for
Title of Account March 31,
Transaction
Transaction
2021
Purchasing
goods,
Purchasing gifts(Note)¥24($217)－

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.

-41 -

－

16.

PER SHARE INFORMATION
2020

Yen

U.S. Dollars
2021

2021

Net assets per share¥ 2,850.99¥ 3,311.24$ 29.91

Net income per share

213.21415.073.75

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:2020
Net income per share
Profit attributable to owners of the parent
Net income unallocated to common stock
Profit attributable to owners of the parent
allocated to common stock
Average number of common stock
outstanding during the fiscal year (Share)¥

Millions of Yen

2021
11,399－$ 102,969－

5,852

11,399102,969

27,449,833

27,465,021－－

Outline of the residual securities whichwere not included in the calculation of thediluted net income per share because there
was no dilutive effect.

5,852
－

Thousands of
U.S. Dollars
2021¥

3. The basis for computation of net assets per share is as follows:2020
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)17.

¥

Millions of Yen

86,2507,965(7,965)

Thousands of
U.S. Dollars
2021

2021
¥

95,062
4,095(4,095)$ 858,662
36,992(36,992)

78,28490,967

821,669

27,458,839

27,472,241

SIGNIFICANT SUBSEQUENT EVENTS(Share Repurchase)
The Company has decided, at the Board of Directors meeting held on August 5, 2021, to repurchase shares of its common
stock and to establish a specific method of purchasing its own shares, pursuant to Article 156 of the Company Act of Japan,
as applied pursuant to Paragraph 3, Article 165 of the Companies Act. On August 6, 2021, the Company carried out the
repurchase of its common stock and the purchase of its own shares was completed.
1.

Reason for Repurchase
To enable flexible execution of capital policies in response to business environment changes

2.

Resolution on repurchase of own shares(1) Class of shares to be repurchased
Common shares(2) Total number of shares to be repurchased
Up to 1,300,000 shares-42 -(3) Aggregate repurchase amountUp to 3,877,900,000 yen (US$ 35,027 thousands)(4) Repurchase dateAugust 6, 2021
(5) Method of Repurchase
The Company placed a purchase order for its shares through brokerages on the Tokyo Stock Exchange Trading
Network Off Action Own Share Repurchase Trading System (ToSTNeT-3). The purchase order was limited todefined trading hours only, and no changes to the trading system or trading time was made.
3.

Details of Repurchase(1) Class of shares to be repurchased
Common shares(2) Total number of shares repurchased
1,231,700 shares(3) Aggregate repurchase amount
3,614,161,100 yen (US$ 32,645 thousands)(4) Repurchase dateAugust 6, 2021
(5) Method of Repurchase
Repurchase through the Tokyo Stock Exchange Trading Network Off Action Own Share Repurchase Trading
System (ToSTNeT-3)(Regarding the Possibility of Claims against EuroTec Japan, Inc., Becoming Uncollectible)
The Company hereby announces the possibility that collection of its claims against its business partner, EuroTec Japan, Inc.
(hereinafter “EuroTec”), may become impossible or delayed accompanying EuroTec’s filing for the initiation of civil
rehabilitation proceedings with the Osaka District Court on August 31, 2021, as described below.
1.

Overview of Other Party(1) Name
EuroTec Japan, Inc.
(2) Location
2926 Shirahamacho, nishimuro-gun, Wakayama(3) Name and Job Title of Representative
Tsunemasa Koie, President(4) Business Description
Export, import, sale, and lease of aircraft and related parts(5) Capital
60 million yen (US$ 541 thousands)(6) Date of Establishment
July 29, 2010
(7) Relationship with the Company(a) Capital RelationshipNone(b) Personal Relationship
Two employees of the Company have been dispatched as executives(c) Business Relationship
Sales transactions in aircraft and related parts(d) Related party status
None

2.

Types and Amounts of Claims against EuroTec (as of August 30, 2021)(1) Loans, etc. : approx. 1.9 billion yen (US$ 17,161 thousands)-43 -(2) Inventory: approx. 3.9 billion yen* (US$ 35,227 thousands)*Future sale of inventory to EuroTec is expected to generate approximately 4.2 billion yen in receivables.
3.

Background and Future Outlook
The company recently received a request for aid from EuroTec after conducting business with EuroTec while
exploring the prospect of entering the rotary-wing aircraft business in which EuroTec is involved. EuroTec’s businessis in line with the direction that the Company intends to grow in the future, and the Company expects collaboration
between EuroTec’s manufacturing and technical capabilities and the Company’s planning and sales capabilities tomore closely meet customers’ needs. Furthermore, there is a substantial societal need for the rebuilding of EuroTec
and the continuity of its business in light of the public aspects of its business such as transactions with local
governments. Accordingly, the Company has decided to discuss and deliberate on supporting EuroTec.
Going forward, the Company will proceed with negotiations with EuroTec regarding support conditions and schemes
and promptly support EuroTec’s business through appropriate mechanisms provided that the prescribed procedures
such as the approval by an oversight committee are carried out.. In addition, in order to support EuroTec, the Company
will execute a loan agreement with EuroTec and provide EuroTec with the financial support it requires.

4.

18.

Impact on Earnings
The impact of this matter on the Company’s full-year consolidated earnings is still under evaluation.
Among the claims described above, the loans, etc. have already been declared as allowance for the fiscal year ended
March 31, 2021, as well as the first quarter of the fiscal year ended March 31, 2022. Furthermore, collection related tothe inventory for EuroTec is anticipated based upon the Company’s fulfillment of its responsibility as a supplier andcompletion of delivery to customers through the civil rehabilitation support.

CONSOLIDATED SUPPLEMENTARY SCHEDULE(1) Schedule of bonds
Not applicable.
(2) Schedule of loans

Category
Short-term loans payable
Current portion of longterm loans payable
Current portion of leaseobligations
Long-term loans payable(excluding current
portion)Lease obligations(excluding current
portion)
Other interest-bearing
debt
Total

2020

Millions of Yen

Thousands of U.S.
Dollars
2021

2021

Interest
rate (%)

Maturity¥ 5,260¥ 10,131$ 91,518

0.77%

－

1,279

668

6,040

0.83%

－

418

699

6,322

3.01%

－

20,83325,166

227,318

0.48%

2022 to 2027

944

1,594

14,3982.23%2021 to 2026

－

－

－

－

¥ 28,736¥ 38,261$ 345,597－

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 follows:-44 -CategoryLong-term loans payable
Lease obligations
Total

Category
Long-term loans payable
Lease obligations
Total

Over 1 year
within 2 years¥ 5,033538¥ 5,572

Millions of Yen
Over 2 years
within 3 years
¥
5,033
473
¥
5,506

Over 3 years
within 4 years¥ 5,100
272¥ 5,372

Over 4 years
within 5 years
¥
5,000
208
¥
5,208

Over 1 year
within 2 years$ 45,463
4,867$ 50,330

Thousands of U.S. Dollars
Over 2 years
within 3 years$ 45,463
4,274$ 49,737

Over 3 years
within 4 years$ 46,066
2,461$ 48,527

Over 4 years
within 5 years$ 45,163
1,882$ 47,045(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.

-45 -