Disclaimer: This document is an English translation of the original document in Japanese and has been
prepared solely for reference purposes. In the event of any discrepancy between this English
translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2022
[Japanese GAAP]
April 28, 2022
Company name: KANEMATSU ELECTRONICS LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 8096
URL: https://www.kel.co.jp/english/
Representative: Akira Watanabe, Representative Director, President & CEO
Contact: Yasuhiro Okazaki, Executive Officer, Manager of Accounting Department
Phone: +81-3-5250-6823
Scheduled date of annual general shareholders’ meeting: June 21, 2022
Scheduled date of commencing dividend payments: May 31, 2022
Scheduled date of filing securities report: June 21, 2022
Availability of supplementary explanatory materials on annual financial results: Available
Schedule of annual financial results briefing session: Scheduled (for institutional investors and securities analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Fiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
March 31, 2022
71,331
8.8
12,687
16.7
12,784
15.8
8,785
19.0
March 31, 2021
65,542(8.9)
10,870(0.6)
11,041
0.4
7,382
(0.1)
Note: Comprehensive income: Fiscal year ended March 31, 2022: ¥9,634 million [31.4 %]Fiscal year ended March 31, 2021: ¥7,329 million [(0.3) %]DilutedRatio ofRatio of
Basic earnings
Return on
earnings
ordinary profit
operating profit
per share
equityper share
to total assets
to net sales
Fiscal year ended
Yen
Yen
%
%
%
March 31, 2022
307.07
–
14.9
16.2
17.8
March 31, 2021
258.11
–
13.5
15.0
16.6
(2) Consolidated Financial Position
Total assets

Net assets

Million yen

82,446
As of March 31, 2022
75,164As of March 31, 2021
Reference: Equity: As of March 31, 2022: ¥61,885 million
As of March 31, 2021: ¥56,361 million

Equity ratio

Net assets per share

Million yen%

Yen

61,92856,41575.1
75.0

2,162.83
1,970.26(3) Consolidated Cash Flows

Fiscal year ended
March 31, 2022
March 31, 2021

Cash and cash
equivalents
at end of period

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Million yen

Million yen

Million yen

Million yen

7,999
8,610

(1,074)(884)(4,149)(3,863)49,66846,877

2. Dividends
1stquarterend
Fiscal year ended
March 31, 2021
Fiscal year ended
March 31, 2022
Fiscal year ending
March 31, 2023
(Forecast)

Annual dividends
2nd
3rd
Yearquarter- quarterend
end
end

Total

Total
dividends(annual)Payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

–

65.00

–

70.00

135.00

3,861

52.3

7.1

–

75.00

–

80.00

155.00

4,435

50.5

7.5

–

75.00

–

80.00

155.0051.6

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March
31, 2023)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentFirst half
Full year

Million yen

35,00072,000%2.7
0.9

Million yen

5,950
12,750

%

(2.1)
0.5

Million yen

6,000
12,800

%

(2.1)
0.1

Million yen

4,000
8,600

%

(4.5)
(2.1)

* Notes:(1) Changes in significant subsidiaries during the period under review: No(Changes in specified subsidiaries resulting in changes in scope of consolidation)
Newly included: – ( )Excluded: – ( )(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Total number of shares issued and outstanding (common shares)
1) Total number of shares issued and outstanding at the end of the period (including treasury shares):
March 31, 2022:
28,633,952 shares
March 31, 2021:
28,633,952 shares2) Total number of treasury shares at the end of the period:
March 31, 2022:
20,992 shares
March 31, 2021:
28,039 shares
3) Average number of shares during the period:
Fiscal year ended March 31, 2022:
Fiscal year ended March 31, 2021:

28,610,883 shares
28,603,596 shares

Yen

139.81300.58(Reference) Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2022. (April 1, 2021 - March 31,
2022)(1) Non-consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Operating profit
Ordinary profit
ProfitFiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
March 31, 2022
61,367
7.7
8,380
14.4
9,657
10.1
7,131
12.4
March 31, 2021
57,005
(8.7)
7,328
3.6
8,775
5.4
6,345
5.0

Fiscal year ended
March 31, 2022
March 31, 2021

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

249.25221.83––(2) Non-consolidated Financial Position
Total assets

Net assets

Million yen

As of March 31, 2022
67,287
As of March 31, 2021
62,278Reference: Equity: As of March 31, 2022: ¥50,632 million
As of March 31, 2021: ¥46,664 million

Equity ratio

Net assets per share

Million yen%

Yen

50,632
46,66475.2
74.9

1,769.57
1,631.28* These consolidated financial results are outside the scope of audit by certified public accountants or an audit firm.
* Explanation on the proper use of financial results forecasts and other notes
The financial results forecasts and other forward-looking statements herein are based on information currently available
to the Company and certain assumptions deemed reasonable, and are not intended to be a promise by the Company toachieve them. As such, actual results may differ significantly from these forecasts due to a wide range of factors. For
the assumptions used as the basis for the financial results forecast and notes on their use, please refer to “1. Overview
of Operating Results, etc. (4) Future Outlook” on page 4 of the Attachments.

Table of Contents - Attachments
1. Overview of Operating Results, etc. .................................................................................................... 2(1) Overview of Operating Results for the Fiscal Year under Review .................................................. 2(2) Overview of Financial Position for the Fiscal Year under Review ................................................. 3(3) Overview of Cash Flows for the Fiscal Year under Review ............................................................ 3(4) Future Outlook ................................................................................................................................ 4(5) Basic Dividend Policy and
Dividends for the Fiscal Year under Review and the Following Fiscal Year ............................ 5
2. Basic Policy on Selection of Accounting Standards ............................................................................ 5
3. Consolidated Financial Statements and Principal Notes ..................................................................... 6(1) Consolidated Balance Sheets .......................................................................................................... 6(2) Consolidated Statements of Income and Comprehensive Income .................................................. 8(3) Consolidated Statements of Changes in Equity ............................................................................ 10(4) Consolidated Statements of Cash Flows ....................................................................................... 12(5) Notes to Consolidated Financial Statements ................................................................................. 13(Notes on going concern assumption) ...................................................................................... 13(Changes in accounting policies) .............................................................................................. 13(Changes in presentation) ......................................................................................................... 13(Segment information, etc.) ...................................................................................................... 14(Per share information) ............................................................................................................. 17(Significant subsequent events) ................................................................................................ 171

1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Fiscal Year under Review
During the fiscal year ended March 31, 2022 (the “fiscal year under review”), the outlook of the Japanese
economy remains uncertain amid the persisting impact of COVID-19 pandemic. While there are sometrends toward recovery supported by the rollout of vaccinations and various policies implemented
nationwide, new and more contagious variants are spurring the resurgence of COVID-19. In addition,
resource prices are rising, with the added impact of Russia’s invasion of Ukraine stimulating global unrest.
In the Japanese IT industry, amid the sense of increasing uncertainty due to the restrictions on supply
brought on by the disrupted supply chain and the effects of shortages of semiconductors and othercomponents, the new normal under the COVID-19 pandemic has firmly established itself facilitatingchanges in lifestyles and work styles, which, in turn, has accelerated corporate efforts toward digitaltransformation (DX). Furthermore, in addition to the rising demand for security measures to combat
increasingly sophisticated and varied cyberattacks, such as those by ransomware, strategic IT investments
have also been robust for promoting operational efficiency and automation amid manpower shortages.
In such an environment, KANEMATSU ELECTRONICS LTD. (the “Company”) and its consolidated
subsidiaries (collectively, the “Group”) continued to focus on developing its infrastructure construction
business pivoting on the technological capability it has accumulated, as well as its solutions business mainlyin the areas of virtualization, security, and network, which are the foundation of its business. The Groupalso worked on building remote working environments for its customers, among others.
Specifically, the Group worked on workstyle reform and COVID-19 countermeasures through theconstruction of robust environments for virtual desktop infrastructure (VDI) and security solutions in linewith the era of zero trust networks. At the same time, the Group further expanded sales of its serviceoriented businesses centered on the 3Ks*. Furthermore, in May 2021, the Company entered into a capitaland business alliance agreement with Keyware Solutions Inc. The agreement aims to expand and deepen
the Company’s customer base and business domains for the sake of its medium- to long-term growth.
As a result of the above, in the fiscal year under review, net sales increased by 5,788 million yen year
on year to 71,331 million yen (up 8.8% year on year). Operating profit increased by 1,817 million yen year
on year to 12,687 million yen (up 16.7% year on year), and ordinary profit increased by 1,742 million yen
year on year to 12,784 million yen (up 15.8% year on year), while profit attributable to owners of parent
increased by 1,402 million yen year on year to 8,785 million yen (up 19.0% year on year), as a result ofproceeds from a settlement reached in a pending litigation.
*3Ks: The service business cluster comprising KEL Briefing Center (KBC); KEL Custom Cloud (KCC);
and KEL Managed Service (KMS).
The status of reportable segments were as follows:(IT Systems Business)
Net sales in the IT Systems Business increased by 4,395 million yen year on year to 50,800 million yen (up9.5% year on year), mainly due to strong performances in the storage-related and network security-related
businesses.
(Services and Support Business)
Net sales in the Services and Support Business increased by 1,392 million yen year on year to 20,530 million
yen (up 7.3% year on year), mainly due to an increase in sales related to the system operation business andcloud services.

2

(2) Overview of Financial Position for the Fiscal Year under Review(Assets)
Current assets increased by 8.8% from the end of the previous fiscal year to 75,031 million yen. This was
mainly attributable to increases in cash and deposits of 2,790 million yen and notes and accounts receivable– trade of 1,590 million yen.
Non-current assets increased by 19.9% from the end of the previous fiscal year to 7,415 million yen.
This was mainly attributable to an increase in investment securities of 1,857 million yen.
(Liabilities)
Current liabilities increased by 10.2% from the end of the previous fiscal year, to 17,966 million yen. Thiswas mainly attributable to increases in income taxes payable of 746 million yen and notes and accounts
payable – trade of 465 million yen.
Non-current liabilities increased by 4.3% from the end of the previous fiscal year to 2,551 million yen.
This was mainly attributable to an increase in retirement benefit liability of 109 million yen.
(Net assets)
Net assets increased by 9.8% from the end of the previous fiscal year, to 61,928 million yen. This was
mainly attributable to an increase in retained earnings by 4,637 million yen due to the recording of profit
attributable to owners of parent of 8,785 million yen and the payment of dividends of 4,148 million yen. As
a result, equity ratio rose to 75.1% from 75.0% at the end of the previous fiscal year.
(3) Overview of Cash Flows for the Fiscal Year under Review
Cash and cash equivalents (hereinafter, “cash”) at the end of the fiscal year under review increased by 2,790
million yen (6.0%) from the end of the previous fiscal year, to 49,668 million yen. The status of cash flows
and underlying factors were as follows.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 7,999 million yen (an inflow of 8,610 million yen in
the previous fiscal year), mainly due to accumulated operating revenue and the collection of tradereceivables.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 1,074 million yen (an outflow of 884 million yen in theprevious fiscal year), mainly due to purchase of investment securities, as well as purchase of property, plantand equipment and intangible assets.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 4,149 million yen (an outflow of 3,863 million yen in theprevious fiscal year), mainly due to dividends paid.

3

Reference: Trends in Cash Flow Indicators
54th term
53rd term
52nd term
51st term
50th term
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended March
ended March
ended March
ended March
ended March
31, 2022
31, 2021
31, 2020
31, 2019
31, 2018
Equity ratio (%)
71.9
72.4
73.6
75.0
75.1
Equity ratio based
139.7
140.3
135.4
142.0
133.1
on fair value (%)
Ratio of interestbearing debt to
0.2
–
–
–
–
cash flow (%)
Interest coverage
13,760.0
16,089.3
18,122.4
171,985.3
3,482,484.1
ratio (times)
Equity ratio: Equity / Total assets
Equity ratio based on fair value: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flow: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest paid
Notes: 1. The indicators are calculated on a consolidated basis.
2. Market capitalization is calculated by multiplying the share price at the year-end by the total number ofshares issued and outstanding at the end of the year (excluding treasury shares).
3. Operating cash flows represent the cash flows from operating activities stated on the consolidated
statements of cash flows.
4. Interest-bearing debt represents all liabilities posted on the consolidated balance sheets for whichinterest is paid.
5. Interest paid represents the amount of interest paid in the consolidated statements of cash flows.

(4) Future Outlook
The economy in Japan is expected to continue to be subjected to some levels of restriction over social andeconomic activities, as there is no clear outlook on when COVID-19 will be contained, despite thenationwide rollout of vaccinations. Additionally, Russia’s invasion of Ukraine is bringing about inflationworldwide and increased geopolitical risk, as well as restrictions on supply reflecting disruption in the
supply chain and soaring resource prices, raising concerns of a downturn in consumption.
In the IT market, while caution is required regarding the risk of delivery delays stemming fromrestrictions on supply, corporations are faced by the rising need for DX, and the role of IT is expected to
expand, as a means to solve social issues such as SDGs as well as further expanding existing businesses
and creating new businesses.
The Group intends to meet such growing demand by leveraging the strength of its multi-vendor approachbacked by a solid customer base and technological prowess to continue offering optimal IT environments
to customers through one-stop services ranging from design, creation to maintenance and operation of IT
infrastructure. Moreover, in addition to further expanding sales of service-oriented businesses centered on
the 3Ks, the Group plans to make aggressive investments to ensure its sustainable growth, such as throughcapital and business alliances that co-create added value and the development of new businesses.
As a result of the above, the financial results forecast for the fiscal year ending March 31, 2023 is asfollows. The Company does not disclose non-consolidated financial results forecasts.

4

Financial results forecast for the fiscal year ending March 31, 2023
First half
Forecast
YoY change (%)(Million yen)
Net sales
35,0002.7
Operating profit
5,950
(2.1)
Ordinary profit
6,000
(2.1)
Profit attributable to
4,000
(4.5)
owners of parent

Full year
Forecast(Million yen)
72,00012,75012,800YoY change (%)
0.9
0.5
0.1

8,600

(2.1)

(5) Basic Dividend Policy and Dividends for the Fiscal Year under Review and the Following Fiscal Year
Our basic policy on the return of profits to shareholders is to provide stable and continuous dividends while
striving to strengthen the foundation for long-term corporate growth.
For the fiscal year ended March 31, 2022, the Company plans to raise the year-end dividend by 10 yen
per share to 80 yen per share to repay shareholders for their ongoing support taking into consideration thefact that business performance for the fiscal year under review outperformed that for the previous fiscal
year, in addition to the policy mentioned above. Together with the interim dividend of 75 yen per share paidin December 2021, the annual dividend for the fiscal year under review will be 155 yen (consolidated
dividend payout ratio of 50.5%).
The year-end dividend will be officially decided at the Board of Directors meeting scheduled to be heldon May 13, 2022.
For the fiscal year ending March 31, 2023, the Company plans to pay an interim dividend of 75 yen anda year-end dividend of 80 yen (annual dividend of 155 yen).
Dividend forecast for the fiscal year ending March 31, 2023
Dividends per share (Yen)Record date
2nd quarter-end
Year-end
Fiscal year ending
75
80
March 31, 2023
Fiscal year ended
75
80
March 31, 2022

Annual155
155

2. Basic Policy on Selection of Accounting Standards
The Group currently operates its business mainly in Japan, and intends to prepare financial statements basedon Japanese GAAP for the time being. However, the Group’s policy is to continue verifying whether to adopt
International Financial Reporting Standards (IFRS) taking into account future trends in the ratio of foreign
shareholders and the adoption of IFRS by other companies in Japan.

53. Consolidated Financial Statements and Principal Notes(1) Consolidated Balance Sheets(Thousand yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6

As of March 31, 2022

46,877,658
16,218,110
1,997,085
3,888,224
68,981,078

49,668,376
17,808,143
3,146,103
4,409,190
75,031,813

1,098,688
962,834
2,061,523

1,089,297
749,512
1,838,810

843,991
843,991

758,842
758,842

913,538
1,342,731
1,029,677(7,644)
3,278,303
6,183,817
75,164,896

2,770,787
1,035,525
1,018,745(7,644)
4,817,413
7,415,067
82,446,880

(Thousand yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Income taxes payable
Unearned revenue
Contract liabilities
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7

As of March 31, 2022

7,732,807
1,829,831
3,224,808－
1,125,714

8,198,715
2,576,420－
3,463,319
1,235,705

142,700

144,200

2,247,526
16,303,388

2,348,371
17,966,731

1,837,932
589,330
18,8672,446,130
18,749,518

1,947,931
585,572
17,8872,551,390
20,518,122

9,031,257
7,138,453
39,802,387(26,170)
55,945,928

9,031,257
7,159,524
44,439,446(20,208)
60,610,020

220,455(15)
79,125
115,552
415,116
54,33256,415,378
75,164,896

1,179,326(512)
94,9981,222
1,275,035
43,702
61,928,758
82,446,880

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Insurance claim income
Subsidy income
Compensation for forced relocation
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Miscellaneous expenses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Settlement income
Gain on sale of golfclub membership
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Loss on valuation of golfclub membership
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

For the fiscal year ended
March 31, 2021
65,542,459
45,596,364
19,946,094
9,075,426
10,870,667

For the fiscal year ended
March 31, 2022
71,331,366
49,241,677
22,089,689
9,401,735
12,687,953

5,329
14,813100,000
13,513－38,610172,267

5,415
18,958－22,06915,64935,753
97,845

50
1,007
1,057
11,041,878

2
1,294
1,296
12,784,502

－
－
2,170
2,170

1,571
180,000
4,417
185,989

107,062450－－
107,513
10,936,535
3,481,442
71,906
3,553,349
7,383,185
272
7,382,913

11,162
1,113
4,300
2,445
19,022
12,951,469
4,242,499(64,525)
4,177,973
8,773,495(11,955)
8,785,451

8

Consolidated Statements of Comprehensive Income(Thousand yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

For the fiscal year ended
March 31, 2021
7,383,185

For the fiscal year ended
March 31, 2022
8,773,495

41,053318
7,425(102,308)(53,511)
7,329,674

958,871(496)
17,198(114,329)
861,2449,634,740

7,326,338

9,645,370

3,335(10,630)9

(3) Consolidated Statements of Changes in Equity
Fiscal year ended March 31, 2021
(Thousand yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Capital surplus

9,031,257

7,112,350

Retainedearnings

Treasury shares

36,280,689(32,045)(3,861,214)(3,861,214)

7,382,913

7,382,913

26,102

26,102
7,138,453

9,031,257

Total
shareholders’equity52,392,252

3,521,698
39,802,387(2,041)
7,917(2,041)34,0195,875(26,170)

3,553,676
55,945,928

Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for- losses on hedges
sale securities

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

179,401

Foreigncurrencytranslation
adjustment(334)

74,762

Total
Remeasurements accumulatedof defined benefit
other
plans
comprehensive
income217,861

471,691

Noncontrollinginterests

50,996

Total net
assets52,914,939(3,861,214)
7,382,913(2,041)34,01941,053318

4,362(102,308)(56,574)

3,335(53,238)

41,053
220,455

318
(15)

4,362
79,125(102,308)
115,552(56,574)
415,116

3,335
54,3323,500,438
56,415,378

10

Fiscal year ended March 31, 2022
(Thousand yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Capital surplus

9,031,257

7,138,453

Retainedearnings

Treasury shares

39,802,387(26,170)(4,148,393)(4,148,393)

8,785,451

8,785,451(1,225)
7,187(1,225)28,258

5,962(20,208)

4,664,091
60,610,020

21,0719,031,257

21,071
7,159,524

Total
shareholders’equity55,945,928

4,637,058
44,439,446

Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for- losses on hedges
sale securities

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

220,455

Foreigncurrencytranslation
adjustment(15)

79,125

Total
Remeasurements accumulatedof defined benefit
other
plans
comprehensive
income115,552

415,116

Noncontrollinginterests

54,332

Total net
assets56,415,378(4,148,393)
8,785,451(1,225)28,258958,871(496)

15,873(114,329)

859,918(10,630)

849,288958,871
1,179,326

(496)
(512)

15,873
94,998(114,329)
1,222

859,918
1,275,035(10,630)
43,702

5,513,380
61,928,758

11

(4) Consolidated Statements of Cash Flows(Thousand yen)
For the fiscal year ended
March 31, 2021
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Loss (gain) on sale of non-current assets
Loss on retirement of non-current assets
Loss (gain) on sale golfclub membership
Loss on valuation of golfclub membership
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Settlement income
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in trade payables
Increase (decrease) in other current liabilities
Other
SubtotalInterest and dividend received
Interest paid
Proceeds from insurance income
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of property, plant and equipment and intangible
assetsProceeds from sale of property, plant and equipment andintangible assets
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Payments for asset retirement obligations
Decrease (increase) in investments and other assets
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

12

For the fiscal year ended
March 31, 2022

10,936,535
616,859(55,219)
64,993(20,142)50－
107,062(2,170)－450－－620,226
120,478(103,272)
216,271(302,026)(137,093)
12,063,002
20,189(50)
100,000(3,573,041)
8,610,100

12,951,469
761,070
109,990
54,066(24,374)
2(1,571)
11,162(4,417)
4,300
1,113
2,445
(180,000)(1,589,190)(1,147,632)(197,604)
481,750
344,088(81,099)
11,495,569
24,373(2)－(3,520,675)
7,999,265(5,218)10(480,387)
1,636(807,007)(415,364)

－

1,711

(85,217)
9,623
－
3,250
(250)
(884,808)(137,273)
14,249(42,424)(16,103)(975)(1,074,932)(3,861,214)(2,041)(3,863,256)(4,148,393)(1,225)(4,149,618)

5,301

16,002

3,867,336
43,010,322
46,877,658

2,790,717
46,877,658
49,668,376

(5) Notes to Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Changes in accounting policies)(Application of accounting standard for revenue recognition, etc.)
The Company applied “Accounting Standard for Revenue Recognition” (Accounting Standards Board ofJapan (ASBJ) Statement No. 29, March 31, 2020; the “Revenue Recognition Standard”) and related
guidelines from the beginning of the fiscal year under review. Accordingly, the Company recognizes
revenue when control of the promised goods or services is transferred to customers in an amount that reflects
the consideration to which the Company expects to be entitled in exchange for those goods and services.
The Company has applied the transitional treatment set forth in the proviso to Paragraph 84 of the
Revenue Recognition Standard in adopting the Revenue Recognition Standard. The cumulative impact ofretrospectively applying the standards to prior periods have been adjusted in the beginning balance ofretained earnings, and the new accounting policies have been applied prospectively from the beginning of
the fiscal year under review.
This change has no impact on the consolidated financial statements for the fiscal year under review.
As a result of the adoption of the Revenue Recognition Standard, unearned revenue, which was presented
under current liabilities in the consolidated balance sheets for the previous fiscal year, is presented ascontract liabilities from the fiscal year under review. In accordance with the transitional treatment set forthin Paragraph 89-2 of the Revenue Recognition Standard, consolidated financial statements for the previous
fiscal year have not been reclassified using the new presentation method.
(Application of accounting standard for fair value measurement)
The Company applied “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4,
2019; the “Fair Value Measurement Standard”) and other standards from the beginning of the fiscal year
under review. In accordance with the transitional treatment set forth in Paragraph 19 of the Fair Value
Measurement Standard and Paragraph 44-2 of “Accounting Standard for Financial Instruments” (ASBJ
Statement No. 10, July 4, 2019), the Company will prospectively apply the new accounting policies
prescribed by the Fair Value Measurement Standard and other standards.
This change has no impact on the consolidated financial statements for the fiscal year under review.
(Changes in presentation)(Assets)
Investments in leases, which had been presented separately under current assets in the previous fiscal year,
has been included in “Other” from the fiscal year under review, due to a decline in significance. The
consolidated financial statements for the previous fiscal year have been reclassified in order to reflect thischange in presentation.
As a result, investments in leases and “Other” presented under current assets in the consolidated balance
sheets for the previous fiscal year of 9,251 thousand yen and 3,878,972 thousand yen, respectively, havebeen reclassified as “Other” of 3,888,224 thousand yen.

13

(Segment information, etc.)[Segment information]
1. Overview of reportable segments
The Group’s reportable segments are components of the Group for which separate financial information isavailable and that are subject to periodic review by the Board of Directors for the purpose of determining
the allocation of management resources and evaluating performance.
The Group’s two reportable segments are the IT Systems Business, which mainly offers comprehensive
information system proposals, system integration, network integration, and software development; and theServices and Support Business, which provides operation and management services, outsourcing services,and system maintenance services.
2. Calculation method of net sales, profit or loss, assets, liabilities and other items by reportable segment
The accounting method for reportable segments is generally the same as that described in “Basis for
Preparing Consolidated Financial Statements.”
Inter-segment sales or transfers are based on market prices.
For internal management purposes, the Group does not allocate assets to reportable segments, but does
allocate depreciation.
3. Information on net sales, profit or loss, assets, liabilities and other items by reportable segment
For the fiscal year ended March 31, 2021
(Thousand yen)
Services and Support
Business

IT Systems BusinessTotal

Net sales
Net sales to external
46,404,746
19,137,712
65,542,459
customers
Inter-segment sales or292,398478,314770,712transfers
Total
46,697,144
19,616,026
66,313,171
Segment profit
7,103,418
3,739,506
10,842,924
Other items
Depreciation
398,833
217,807616,641
Note: Assets are not stated as there are no assets allocated to the reportable segments.

14

For the fiscal year ended March 31, 2022
(Thousand yen)
Services and Support
Business

IT Systems BusinessTotal

Net sales
Net sales to external
50,800,688
20,530,677
customers
Intersegment sales or
113,658
369,025transfers
Total
50,914,347
20,899,703
Segment profit
8,530,157
4,032,164
Other items
Depreciation
451,339309,730
Note: Assets are not stated as there are no assets allocated to the reportable segments.

71,331,366
482,684
71,814,050
12,562,321
761,070

4. Reconciliation between the total amount of reportable segments and the amount recorded in the
consolidated financial statements and the main details of adjustments(Thousand yen)
Net Sales
Total of reportable segments
Elimination of inter-segment transactions
Net sales in the consolidated financial
statements

Fiscal year ended
March 31, 2021
66,313,171(770,712)

Fiscal year ended
March 31, 2022
71,814,050(482,684)

65,542,459

71,331,366(Thousand yen)
ProfitTotal of reportable segments
Elimination of inter-segment transactions
Operating profit in the consolidated financial
statements

15

Fiscal year ended
March 31, 2021
10,842,924
27,743Fiscal year ended
March 31, 2022
12,562,321
125,632

10,870,667

12,687,953

[Related Information]
For the fiscal year ended March 31, 2021
1. Information by product and service
Information is not presented because the same information is stated in “Segment information.”
2. Information by region(1) Net sales
Information is not presented because net sales to external customers in Japan exceeds 90% of thosestated in the consolidated statements of income.
(2) Property, plant and equipment
Information is not presented because the amount of property, plant and equipment located in Japanexceeds 90% of those stated in the consolidated statements of income.
3. Information by major customer
Information is not presented because there are no external customers accounting for 10% or more of net
sales in the consolidated statements of income.
For the fiscal year ended March 31, 2022
1. Information by product and service
Information is not presented because the same information is stated in “Segment information.”
2. Information by region(1) Net sales
Information is not presented because net sales to external customers in Japan exceeds 90% of thosestated in the consolidated statements of income.
(2) Property, plant and equipment
Information is not presented because the amount of property, plant and equipment located in Japanexceeds 90% of those stated in the consolidated statements of income.
3. Information by major customer
Information is not presented because there are no external customers accounting for 10% or more of net
sales in the consolidated statements of income.
[Information on losses on impairment of non-current assets by reportable segment]
Not applicable.
[Information on amortization and unamortized balance of goodwill by reportable segment]
Not applicable.
[Information on gain on bargain purchase by reportable segment]
Not applicable.

16(Per share information)
Item
Net assets per share

For the fiscal year
ended March 31, 2021
¥1,970.26

For the fiscal year
ended March 31, 2022
¥2,162.83¥258.11¥307.07

Basic earnings per share

Notes: 1. Diluted earnings per share is not shown because there are no potential shares.
2. The basis for calculating basic earnings per share is as follows:
Item

For the fiscal year
ended March 31, 2021

For the fiscal year
ended March 31, 2022

Basic earnings per share
Profit attributable to owners of parent(Thousand yen)Amount not attributable to commonshareholders (Thousand yen)
Profit attributable to owners of parent
relating to common shares(Thousand yen)
Average number of common shares
during the period(Thousand shares)

7,382,913

8,785,451––

7,382,913

8,785,451

28,603

28,6103. The basis for calculating net assets per share is as follows
Item

As of March 31, 2021

Total net assets (Thousand yen)Amount deducted from total net assets(Thousand yen)
[Of which, non-controlling interests(Thousand yen)]
Net assets attributable to common sharesat the end of the period (Thousand yen)
Number of common shares used to
calculate net assets per share at the end of
the period (Thousand shares)(Significant subsequent events)
Not applicable.

17

As of March 31, 2022

56,415,378

61,928,758

54,332

43,702[54,332][43,702]56,361,045

61,885,056

28,60528,612