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 Six Months Ended September 30, 2022
[Japanese GAAP]
October 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 filing quarterly securities report: November 4, 2022
Scheduled date of commencing dividend payments: December 1, 2022
Availability of supplementary explanatory materials on quarterly financial results: Available
Schedule of quarterly 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 Six Months Ended September 30, 2022 (April 1, 2022 - September 30, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Six months ended
Million yen%
Million yen%
Million yen%
Million yen%
39,791
16.8
6,702
10.3
6,735
9.9
4,552
8.7
September 30, 2022
September 30, 2021
34,064
8.2
6,074
21.3
6,128
19.3
4,187
20.4
Note: Comprehensive income: Six months ended September 30, 2022: ¥4,636 million [11.7 %]Six months ended September 30, 2021: ¥4,150 million [18.4 %]DilutedBasic earnings
earnings
per shareper share
Six months ended
Yen
Yen
159.10
September 30, 2022–
September 30, 2021
146.36–(2) Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

89,45864,305
As of September 30, 2022
82,446
61,928
As of March 31, 2022
Reference: Equity: As of September 30, 2022: ¥64,262 million
As of March 31, 2022: ¥61,885 million

Equity ratio
%

71.8
75.1

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Yen

–

80.00

155.00–80.00

160.00Yen

Fiscal year ended–
75.00
March 31, 2022
Fiscal year
ending–80.00
March 31, 2023
Fiscal year ending
March 31, 2023
(Forecast)
Note: Revision to the forecast for dividends announced most recently: Yes

Year-endTotal

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
parentMillion yen%

Million yen%

Million yen%

Full year
77,0007.9
13,4005.6
13,5005.6
Note: Revision to the forecast for dividends announced most recently: Yes

Million yen

9,100

%

3.6

* 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) Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) 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):
September 30, 2022:
28,633,952 shares
March 31, 2022:
28,633,952 shares2) Total number of treasury shares at the end of the period:
September 30, 2022:
13,344 shares
March 31, 2022:
20,992 shares
3) Average number of shares during the period:
Six months ended September 30, 2022:
Six months ended September 30, 2021:

28,616,679 shares
28,608,752 shares

Yen

318.00* These quarterly consolidated financial results are outside the scope of quarterly review 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. Qualitative
Information on Quarterly Financial Results (3) Explanation of Consolidated Financial Results Forecast and Other
Forward-looking Information” on page 3 of the Attachments.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results .........................................................................2(1) Explanation of Operating Results ........................................................................................................2(2) Explanation of Financial Position for the First Quarter under Review .................................................3(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information .....3
2. Quarterly Consolidated Financial Statements and Principal Notes .........................................................4(1) Quarterly Consolidated Balance Sheets ..............................................................................................4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ......................................6(3) Quarterly Consolidated Statements of Cash Flows .............................................................................8(4) Notes to Quarterly Consolidated Financial Statements .......................................................................9(Notes on going concern assumption) ............................................................................................9(Notes in case of significant changes in shareholders’ equity) .......................................................9(Segment information, etc.) ..........................................................................................................10(Significant subsequent events) ......................................................................................................121

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the six months ended September 30, 2022, the Japanese economy continued to show signs ofrecovery thanks to the effects of various policies, as social and economic activities proceeded to go back tonormal. Meanwhile, with rising concerns for the international situation including the protracted conflict in
Ukraine and the constraints on economic activities in China, compounded with the sharply depreciating yen
due to a significant rise in the U.S. policy interest rate, as well as rising resource prices, the outlook of theJapanese economy remained uncertain.
In the Japanese IT industry, amid the sense of increasing uncertainty due to the restrictions on supply
brought on by the shortage of semiconductors and other components and the disrupted supply chain as wellas the impact of the rapidly depreciating yen on procurement costs, the new normal under the COVID-19
pandemic has firmly established itself facilitating changes in lifestyles and work styles, which, in turn, has
accelerated corporate efforts toward digital transformation (DX). Furthermore, in addition to the risingdemand for security measures to combat increasingly sophisticated and varied cyberattacks, such as thoseby ransomware, strategic IT investments for promoting operational efficiency and automation amid
manpower shortages have acquired added significance.
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 and security, which are the foundation of its business. The Group also 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 August 2022, the Company entered into a capitaland business alliance agreement with Terilogy Co., Ltd. The agreement aims to further expand and deepen
security business domains for the sake of increasing corporate value over the medium- to long-term.
As a result of the above, in the six months ended September 30, 2022, net sales increased by 5,727
million yen year on year to 39,791 million yen (up 16.8% year on year). Operating profit increased by 627
million yen year on year to 6,702 million yen (up 10.3% year on year), and ordinary profit increased by 606
million yen year on year to 6,735 million yen (up 9.9% year on year), while profit attributable to owners ofparent increased by 365 million yen year on year to 4,552 million yen (up 8.7% year on year).
*3Ks: The service business cluster comprising KEL Briefing Center (KBC); KEL Custom Cloud (KCC);
and KEL Managed Service (KMS).
The status of reportable segments was as follows:(IT Systems Business)
Net sales in the IT Systems Business increased by 5,524 million yen year on year to 29,681 million yen (up22.9% year on year), mainly due to strong performances in the server-related business for the manufacturingindustry.
(Services and Support Business)
Net sales in the Services and Support Business increased by 203 million yen year on year to 10,110 million yen(up 2.1% year on year), mainly due to an increase in sales related to the cloud services for the manufacturingindustry.

2(2) Explanation of Financial Position for the First Quarter under Review(Assets)
Current assets increased by 8.5% from the end of the previous fiscal year to 81,389 million yen. This was
mainly attributable to increases in notes and accounts receivable – trade of 4,510 million yen and inventories
of 1,909 million yen.
Non-current assets increased by 8.8% from the end of the previous fiscal year to 8,068 million yen.
This was mainly attributable to an increase in investment securities of 519 million yen.
(Liabilities)
Current liabilities increased by 25.6% from the end of the previous fiscal year to 22,564 million yen. Thiswas mainly attributable to an increase in notes and accounts payable – trade of 5,394 million yen.
Non-current liabilities increased by 1.4% from the end of the previous fiscal year to 2,587 million yen.
This was mainly attributable to an increase in asset retirement obligations of 17 million yen.
(Net assets)
Net assets increased by 3.8% from the end of the previous fiscal year to 64,305 million yen. This was mainly
attributable to an increase in retained earnings by 2,263 million yen due to the recording of profit attributableto owners of parent of 4,552 million yen and the payment of dividends of 2,289 million yen. As a result,the equity ratio rose to 71.8% from 75.1% at the end of the previous fiscal year.
(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
As for the consolidated financial results forecast for the fiscal year ending March 31, 2023, the Company
has, in light of its recent performance and other factors, revised the financial results forecast announced on
April 28, 2022. For details, please refer to the “Notice Regarding the Revision to the Consolidated Financial
Results Forecast and the Dividend of Surplus (Interim Dividend)” announced today (October 28, 2022).

3

2. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)
As of March 31, 2022
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

4

As of September 30, 2022

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

49,599,479
22,318,542
5,055,368
4,415,935
81,389,325

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

1,093,554
772,965
1,866,520

758,842
758,842

987,158
987,158

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

3,290,585
917,123
1,015,119(7,644)5,215,184
8,068,863
89,458,189

(Thousand yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Income taxes payable
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

5

As of September 30, 2022

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

13,593,634
1,927,019
3,775,381
1,130,387

144,200

67,8192,348,371
17,966,731

2,070,573
22,564,816

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

1,957,802
603,253
26,5982,587,655
25,152,471

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

9,031,257
7,181,969
46,703,349(12,945)
62,903,631

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

1,294,196(26,976)
112,850(21,661)
1,358,409
43,67764,305,717
89,458,189

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30(Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Subsidy income
Compensation for forced relocation
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Miscellaneous expenses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of golfclub membership
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale 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 six months ended
September 30, 2021
34,064,088
23,437,132
10,626,956
4,552,161
6,074,795

For the six months ended
September 30, 2022
39,791,953
28,269,106
11,522,846
4,820,636
6,702,209

2,755
13,26019,06915,6494,572
55,306

2,837
22,055
1,362–
10,02736,282

0
333
1,284
1,618
6,128,483

–
1,877
1,309
3,186
6,735,305

871
4,417
5,289

1,213
–
1,213

2,985
1,113
4,099
6,129,673
1,924,664
21,871
1,946,535
4,183,137(4,025)
4,187,163

816
–
816
6,735,702
2,086,428
97,894
2,184,322
4,551,380(1,559)4,552,940

6

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30(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 six months ended
September 30, 2021
4,183,137

For the six months ended
September 30, 2022
4,551,380

1,120
41
1,135
(34,837)(32,539)
4,150,597

114,869(26,464)
19,387(22,884)
84,9084,636,288

4,158,163

4,636,313(7,565)(24)

7

(3) Quarterly Consolidated Statements of Cash Flows(Thousand yen)
For the six months ended
September 30, 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 (gain) on sale of investment securities
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
Settlement received
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

8

For the six months ended
September 30, 2022

6,129,673
357,450(50,082)
32,475(16,016)
0
(871)
2,985
(4,417)1,113(613,129)(1,051,886)(142,685)
684,11189,839(118,065)
5,300,496
16,010(0)–(1,929,527)
3,386,979

6,735,702
335,110(105,318)
9,823(24,892)–(1,213)816––(4,505,437)(1,908,493)(320,593)
5,390,491(25,467)(90,456)
5,490,071
24,884–
180,000(2,729,840)
2,965,115(480,209)
1,136(354,232)–(213,483)(546,229)

871

1,634

(82,129)
12,071(13,024)(9,803)(975)(785,545)(3,225)
151,411(13,870)
5,000
(345)
(759,856)(2,002,413)(861)(2,003,275)(2,289,036)(207)(2,289,244)

3,431

15,089601,589
46,877,658
47,479,247(68,896)
49,668,376
49,599,479

(4) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Notes in case of significant changes in shareholders’ equity)
For the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
Not applicable.

9(Segment information, etc.)[Segment information]
I. For the six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)
1. Information on net sales and profit or loss
(Thousand yen)
Services and Support
IT Systems Business
Total
Business
Net sales
Net sales to external
24,156,480
9,907,607
34,064,088
customers
Inter-segment sales or
74,747
163,293
238,041transfers
Total
24,231,228
10,070,901
34,302,130
Segment profit
3,922,693
2,089,191
6,011,885
2. Reconciliation between the total amount of profit or loss of reportable segments and the amount recorded in
the quarterly consolidated statements of income and the main details of adjustments(Thousand yen)
ProfitTotal of reportable segments
Elimination of inter-segment transactions
Operating profit in the quarterly consolidated
statements of income

Amount6,011,885
62,9106,074,795

3. Information on losses on impairment or goodwill of non-current assets by reportable segment
Not applicable.

10II. For the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
1. Information on net sales and profit or loss
(Thousand yen)
Services and Support
IT Systems Business
Total
Business
Net sales
Net sales to external
29,681,077
10,110,876
39,791,953
customers
Inter-segment sales or
27,824
182,480
210,305transfers
Total
29,708,902
10,293,356
40,002,258
Segment profit
4,640,061
1,983,777
6,623,839
2. Reconciliation between the total amount of profit or loss of reportable segments and the amount recorded in
the quarterly consolidated statements of income and the main details of adjustments(Thousand yen)
ProfitTotal of reportable segments
Elimination of inter-segment transactions
Operating profit in the quarterly consolidated
statements of income

Amount
6,623,839
78,3706,702,209

3. Information on losses on impairment or goodwill of non-current assets by reportable segment
Not applicable.

11

(Significant subsequent events)(Conversion of an entity to an equity method affiliate through acquisition of shares)
The Company, by a resolution of its Board of Directors adopted at a meeting held on September 30, 2022,
determined to acquire additional shares of GLOBAL SECURITY EXPERTS Inc. from Business Brain ShowaOta Inc., and acquired the shares on October 3, 2022. As a result, GLOBAL SECURITY EXPERTS Inc. became
an equity method affiliate of the Company.
1. Reasons for the acquisition of shares
The Company and GLOBAL SECURITY EXPERTS Inc. built a capital and business alliance in the field of
information security in August 2017. The two companies have since implemented various efforts in close
cooperation as important partners under mutual security strategies. As ICT is rapidly changing amid theongoing digitalization of society, we see signs in our own business of intensifying competition not only withthe existing “SIers” (System Integrators), but also with new entrants to the market. Under such circumstances,
we determined that the creation of synergy with GLOBAL SECURITY EXPERTS Inc. through a further
strengthening of the business alliance and resource sharing was essential, in order to meet the challenges ofachieving sustainable growth as the Group, such as consolidating KANEMATSU ELECTRONICS as
customers’ strategic partner in their pursuit of efforts for business transformation, so-called DX (Digital
Transformation), or enhancing service business competitiveness from cloud to endpoints. Consequently, we
converted GLOBAL SECURITY EXPERTS Inc. to our equity method affiliate through the additional
acquisition of its shares.
2. Summary of the company that will be converted to an equity method affiliate(1) Company name(2) Type of business(3) Amount of capital

GLOBAL SECURITY EXPERTS Inc.
Cyber security-related business
485 million yen

3. Method of acquisition
Acquisition of shares through off-market negotiation transaction with Business Brain Showa-Ota Inc.
4. Number of shares acquired, acquisition price, and the number of shares held before and after the acquisition(1) Number of shares held before
300,000 shares (percentage of voting rights: 9.01%)
the change(2) Number of shares acquired
469,000 shares(3) Acquisition price
2,324 million yen(4) Number of shares held after
769,000 shares (percentage of voting rights: 23.11%)
the change
5. Method of funding and payment for the acquisition
Paid by own funds.

12