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 Three Months Ended June 30, 2022
[Japanese GAAP]
July 29, 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: August 4, 2022
Scheduled date of commencing dividend payments: –Availability of supplementary explanatory materials on quarterly financial results: Available
Schedule of quarterly financial results briefing session: None
(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Three Months Ended June 30, 2022 (April 1, 2022 - June 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
Three months ended
Million yen%
Million yen%
Million yen%
Million yen%
12,792
14.1
1,275
38.4
1,301
36.8
866
30.8
June 30, 2022
June 30, 2021
11,207
5.0
921
15.3
951
4.0
661
7.6
Note: Comprehensive income: Three months ended June 30, 2022: ¥521 million [(18.6) %]Three months ended June 30, 2021: ¥640 million [2.1 %]DilutedBasic earnings
earnings
per shareper share
Three months ended
Yen
Yen
30.27
June 30, 2022–
June 30, 2021
23.14–
(2) Consolidated Financial Position
Total assets
Million yen

Net assets

75,887
As of June 30, 2022
82,446
As of March 31, 2022
Reference: Equity: As of June 30, 2022: ¥60,114 million
As of March 31, 2022: ¥61,885 million

Equity ratio

Million yen%

60,161
61,92879.2
75.1

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Year-end

Fiscal year ended
–
75.00
–
March 31, 2022
Fiscal year
ending–March 31, 2023
Fiscal year ending
March 31, 2023
75.00–
(Forecast)
Note: Revision to the forecast for dividends announced most recently: None

Total
Yen

Yen

80.00

155.0080.00

155.003. 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%

First half
35,0002.7
5,950 (2.1)
6,000 (2.1)
Full year
72,0000.9
12,750 0.5
12,8000.1
Note: Revision to the forecast for dividends announced most recently: None

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) 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):
June 30, 2022:
28,633,952 shares
March 31, 2022:
28,633,952 shares2) Total number of treasury shares at the end of the period:
June 30, 2022:
21,012 shares
March 31, 2022:
20,992 shares
3) Average number of shares during the period:
Three months ended June 30, 2022:
Three months ended June 30, 2021:

28,612,960 shares
28,605,512 shares

Yen

139.81300.58

* 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) Notes to Quarterly Consolidated Financial Statements .......................................................................8(Notes on going concern assumption) ............................................................................................8(Notes in case of significant changes in shareholders’ equity) .......................................................8(Segment information, etc.) ............................................................................................................91

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the three months ended June 30, 2022, the Japanese economy continued to show signs of recovery
thanks to the effects of various policies, as social and economic activities proceeded to go back to normal.
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 depreciating yen and the soaring
prices of natural resources, the outlook of the Japanese 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*.
As a result of the above, in the three months ended June 30, 2022, net sales increased by 1,585 million
yen year on year to 12,792 million yen (up 14.1% year on year). Operating profit increased by 353 million
yen year on year to 1,275 million yen (up 38.4% year on year), and ordinary profit increased by 350 million
yen year on year to 1,301 million yen (up 36.8% year on year), while profit attributable to owners of parent
increased by 204 million yen year on year to 866 million yen (up 30.8% 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 1,507 million yen year on year to 8,031 million yen (up23.1% year on year), mainly due to strong performances in the server-related business for the service industry
and government agencies as well as an increase in income from labor charges from system construction.
(Services and Support Business)
Net sales in the Services and Support Business increased by 78 million yen year on year to 4,761 million yen(up 1.7% 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 decreased by 8.0% from the end of the previous fiscal year to 69,025 million yen. This was
mainly attributable to a decrease in notes and accounts receivable – trade of 8,166 million yen.
Non-current assets decreased by 7.5% from the end of the previous fiscal year to 6,862 million yen.
This was mainly attributable to a decrease in investment securities of 464 million yen.
(Liabilities)
Current liabilities decreased by 26.9% from the end of the previous fiscal year to 13,133 million yen. Thiswas mainly attributable to a decrease in income taxes payable of 2,523 million yen.
Non-current liabilities increased by 1.6% from the end of the previous fiscal year to 2,592 million yen.
This was mainly attributable to an increase in other non-current liabilities of 26 million yen.
(Net assets)
Net assets decreased by 2.9% from the end of the previous fiscal year to 60,161million yen. This was mainly
attributable to a decrease in retained earnings by 1,422 million yen due to the recording of profit attributableto owners of parent of 866 million yen and the payment of dividends of 2,289 million yen. As a result, theequity ratio rose to 79.2% 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, there have been no changes to the financial results forecast
announced on April 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 June 30, 2022

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

49,761,228
9,641,313
4,767,048
4,855,711
69,025,302

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

1,111,313
762,308
1,873,622

758,842
758,842855,673855,6732,770,787
1,035,525
1,018,745(7,644)
4,817,413
7,415,067
82,446,880

2,306,640
818,280
1,015,610(7,644)
4,132,887
6,862,183
75,887,485

(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 June 30, 2022

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

5,747,641
53,2084,089,440
477,095

144,200

33,9092,348,371
17,966,731

2,732,141
13,133,436

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

1,946,057
602,655
44,0402,592,753
15,726,189

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

9,031,257
7,159,524
43,016,459(20,287)
59,186,954

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

857,239(24,924)
105,393(10,219)
927,489
46,85160,161,295
75,887,485

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 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
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
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
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 three months ended
June 30, 2021
11,207,116
8,211,809
2,995,306
2,074,022
921,284

For the three months ended
June 30, 2022
12,792,879
9,315,741
3,477,138
2,202,027
1,275,110

1,270
12,72015,866
1,511
31,3691,363
22,006841
5,608
29,819

6

0

–

–
1,273
1,273
951,380

2,560
687
3,248
1,301,681

871
871

–
–

1,653
1,653
950,599(15,333)
305,686
290,352
660,246(1,667)
661,91321
21
1,301,660
33,666400,835
434,502867,158
1,107
866,050

Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 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 three months ended
June 30, 2021
660,246

For the three months ended
June 30, 2022
867,158(5,502)(113)
3,351(17,418)(19,683)
640,563(322,087)(24,412)
12,436(11,442)(345,505)
521,653

643,738

518,504(3,175)

3,149

7

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

8

(Segment information, etc.)[Segment information]
I. For the three months ended June 30, 2021 (from April 1, 2021 to June 30, 2021)
1. Information on net sales and profit or loss
(Thousand yen)

Net sales
Net sales to externalcustomers
Inter-segment sales ortransfers
Total
Segment profit

IT Systems Business

Services and Support
Business

6,523,913

4,683,202

11,207,116

20,116

69,29789,4136,544,029
53,667

4,752,500
832,452

11,296,529
886,119

Total

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

Amount886,119
35,164921,284

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

9II. For the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)
1. Information on net sales and profit or loss
(Thousand yen)

Net sales
Net sales to externalcustomers
Inter-segment sales ortransfers
Total
Segment profit

IT Systems Business

Services and Support
Business

8,031,482

4,761,396

12,792,879

11,66866,53478,202

8,043,151
314,722

4,827,930
920,425

12,871,081
1,235,148

Total

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

Amount1,235,148
39,962
1,275,110

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

10