兼松（8020） – Supplementary Material of Consolidated Financial Results for the Fiscal Year Ending March 2022 (IFRS)

Fiscal year ended March 2022 Fiscal year ended March 2021 Fiscal year ended March 2022 Fiscal year ended March 2021 Member of Financial Accounting Standards Foundation Consolidated Financial Summary for the Fiscal Year Ended March 31, 2022 (IFRS) Company name: Kanematsu Corporation Stock Exchange listing: Prime Market, Tokyo Stock Exchange Stock code: Representative: Contact: Scheduled date for the Ordinary General Meeting of Shareholders: Scheduled date for commencement of dividend payments: Scheduled date for the submission of financial statements: Supplementary documents for financial results: Financial results briefing: 8020 President, Yoshiya Miyabe General Manager of Accounting Dept., Reiki Fujii TEL (03) 5440-8111 June 24, 2022 June 8, 2022 June 24, 2022 Yes Yes (for institutional investors and analysts) May 10, 2022 URL: https://www.kanematsu.co.jp 1. Consolidated business results for the fiscal year ended March 2022 (April 1, 2021 – March 31, 2022) (1) Consolidated business results Revenue Operating profit Profit before tax Profit (Figures of less than one million are rounded down.) (%: Change from the previous year) Profit attributable to owners of the parent Total comprehensive income for the year Million yen % Million yen % Million yen % Million yen % Million yen % Million yen % 767,963 18.3 29,347 24.2 28,765 22.0 20,559 26.5 15,986 20.1 26,246 23.9 649,142 (10.1) 23,635 (16.6) 23,580 (12.5) 16,251 (10.9) 13,315 (7.5) 21,180 45.8 Basic earnings per share Diluted earnings per share Profit before tax to total assets Return on equity attributable to owners of the parent Yen 191.42 159.44 Yen 191.15 159.34 % 10.5 9.7 % 4.8 4.3 (Reference) Share of profit (loss) of investments accounted for using the equity method: (Note) The basic earnings per share and the diluted earnings per share are calculated based on the profit attributable to owners of the parent. 1,451 million yen for the fiscal year ended March 2022 692 million yen for the fiscal year ended March 2021 (2) Consolidated financial condition Total assets Total equity Equity attributable to owners of the parent Percentage of equity attributable to owners of the parent Equity attributable to owners of the parent per share As of March 31, 2022 As of March 31, 2021 Million yen Million yen 634,456 557,495 199,282 180,492 Million yen 159,484 143,926 % 25.1 25.8 Yen 1,909.64 1,723.42 (3) Consolidated cash flows Fiscal year ended March 2022 Fiscal year ended March 2021 2. Dividends (Record date) Operating activities Investing activities Financing activities Cash and cash equivalents at end of year Million yen Million yen 15,382 36,984 (10,547) (9,927) Million yen 4,245 (37,497) Annual dividends End of first quarter End of second quarter End of third quarter Year end Fiscal Annual total of dividend Payout ratio (Consolidated) Million yen 91,420 81,045 Dividend on equity attributable to owners of the parent (Consolidated) Fiscal year ended March 2021 Fiscal year ended March 2022 Fiscal year ending March 2023 (Forecasts) Yen – – – Yen 30.00 30.00 35.00 Yen – – – Yen 30.00 35.00 35.00 Yen 60.00 65.00 70.00 5,054 5,475 37.6 34.0 32.5 3.6 3.6 Million yen % % (Note) Revisions to dividend forecasts published most recently: None 3. Forecasts for consolidated results ending March 2023 (April 1, 2022 – March 31, 2023) Revenue Operating profit Profit before tax Basic earnings per share (%: Changes from the previous year) Profit attributable to owners of the parent Million yen 18,000 % 12.6 Yen 215.53 Full year Million yen 850,000 % 10.7 Million yen 31,500 % 7.3 Million yen 32,000 % 11.2 * Notes (1) Important change in subsidiaries during the term (Change in scope of consolidation): None (2) Changes in accounting policies and changes in accounting estimates None None None 1. Changes in accounting policies required by IFRS: 2. Changes in accounting policies other than 1.: 3. Changes in accounting estimates: (3) Number of outstanding shares (common shares) 1. Number of outstanding shares including treasury stock Fiscal year (2022/3): 2. Number of treasury stock Fiscal year (2022/3): 3. Average number of shares during the period 84,500,202 shares Fiscal year (2021/3): 84,500,202 shares 984,933 shares Fiscal year (2021/3): 988,461 shares Fiscal year (2022/3): 83,514,196 shares Fiscal year (2021/3): 83,511,523 shares (Reference) Overview of non-consolidated business results 1. Non-consolidated business results for the fiscal year ended March 2022 (April 1, 2021 – March 31, 2022) (1) Non-consolidated business results Operating profit Revenue % % Ordinary profit Fiscal year ended March 2022 Fiscal year ended March 2021 Million yen 336,492 342,979 – (12.0) Million yen (848) (599) – – Million yen 10,166 8,165 % 24.5 (26.6) Million yen 8,582 5,586 % 53.6 (37.6) (Note) An accounting item was changed from “Net sales” to “Revenue” as a result of the application of the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and the “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March 26, 2021) from the fiscal year under review. (%: Change from the previous year) Profit for the year Profit for the year per share Diluted profit for the year per share Fiscal year ended March 2022 Fiscal year ended March 2021 (2) Non-consolidated financial position As of March 31, 2022 As of March 31, 2021 Yen 102.73 66.87 Million yen 311,255 268,219 Yen – – Million yen 102,646 98,144 Total assets Net assets Equity ratio Net assets per share % 33.0 36.6 Yen 1,228.71 1,174.87 (Reference) Shareholders’ equity 102,646 million yen for the fiscal year ended March 2022 98,144 million yen for the fiscal year ended March 2021 * Consolidated financial summaries are not subject to audit by a certified public accountant or an audit corporation. * Explanation about the proper use of results forecasts, and additional information 1. The results forecasts and forward-looking statements included in this document are based on information that the Consolidated Group has obtained on the date of the announcement and certain assumptions that the Consolidated Group considers reasonable. The Consolidated Group makes no guarantees with respect to the achievement of its results forecasts or forward-looking statements. Actual results might be significantly different from the forecasts in the document, depending on various factors. Refer to “1. Overview of Business Results, Etc., (1) Overview of business results, (ii) Future outlook” on page 3 of accompanying materials for further information on results forecasts. 2. The Company operates its businesses on a consolidated basis. The Company produces no forecast for non-consolidated business results. 3. The Company plans to hold an online results briefing for institutional investors and analysts on Thursday, May 19, 2022. Results briefing materials used at the results briefing will be posted on the Company’s website immediately after it is held. Accompanying Materials – Contents 1. Overview of Business Results, Etc. ……………………………………………………………………………………………. 2 (1) Overview of business results ……………………………………………………………………………………………………………….. 2 (2) Overview of financial position ……………………………………………………………………………………………………………… 4 (3) Basic policy for distribution of profits and dividends ………………………………………………………………………………. 4 2. Basic Approach to Selection of Accounting Standards …………………………………………………………………. 4 3. Consolidated Financial Statements and Major Notes ……………………………………………………………………. 5 (1) Consolidated statement of financial position ………………………………………………………………………………………….. 5 (2) Consolidated statements of income / consolidated statement of comprehensive income ………………………………. 7 Consolidated statements of income …………………………………………………………………………………………………… 7 Consolidated statements of comprehensive income …………………………………………………………………………….. 8 (3) Consolidated statement of changes in equity ………………………………………………………………………………………….. 9 (4) Consolidated statements of cash flows ………………………………………………………………………………………………… 11 (5) Notes on the consolidated financial statements …………………………………………………………………………………….. 12 Notes on the going concern assumption……………………………………………………………………………………………….. 12 Segment information …………………………………………………………………………………………………………………………. 13 Per share information … …………………………………………………………………………………………………………………….. 15 Significant subsequent events …………………………………………………………………………………………………………….. 15 – 1 – 1. Overview of Business Results, Etc. (1) Overview of business results (i) Review of operations During the fiscal year under review, the global economy recovered rapidly in the first six months thanks to the normalization of the economy following the progress in vaccine rollouts. Thereafter, however, concerns emerged over factors placing a downward pressure on the global economy, namely the appearance of new virus variants, global supply chain disruptions, rising inflations worldwide, and the impact of Russia’s invasion of Ukraine that began in February and the sanctions imposed by national governments in response. The U.S. economy led the recovery of the global economy on the strength of large-scale economic measures and the rapidly rising demand following the normalization of economic activities. Its outlook, however, requires close monitoring as the country has entered the rapid monetary tightening phase that prioritizes the control of inflation in response to the out-of-control inflation caused by factors such as the labor shortage and supply chain disruptions. In Europe, although the economies had also started to return to normal, the activity restrictions introduced following the successive spread of new virus variants dragged on the economy. In addition, the Ukrainian crisis and the resulting uncertainty about energy supplies caused the recovery to lose momentum. In China, the economic recovery was stalled due to power supply restrictions, property market regulations, and activity restrictions and lockdowns under the zero COVID policy. In addition, the suspension of China’s supply chains began affecting the global economy including Japan. Japan saw the slowest economic recovery among the major economies due to the repeated declaration of a state of emergency and the resulting reduction in activity, as well as the impact of parts shortage, rising commodity prices and even higher resources and grain prices after the Ukrainian crisis. In this environment, the results of the Group in the fiscal year under review are as shown below. Revenue increased in almost all businesses centered on the meat products business and the grain and feedstuff business, which were supported by rallying market conditions, and the energy business, where the trading volume of crude oils and petroleum increased due to rising crude oil prices. While profit decreased in the aerospace business reflecting the changeover period for contracts with government agencies and in the mobile business where fee income shrank, profit increased in the meat products business, the ICT solutions business, and steel tubing business all of which had higher revenues. Consolidated revenue increased ¥118,821 million (18.3%) year on year, to ¥767,963 million. Consolidated gross profit also increased ¥10,286 million (10.1%) from a year earlier, to ¥111,801 million. Consolidated operating profit rose ¥5,712 million (24.2%) from a year earlier, to ¥29,347 million reflecting an increase in gross profit, despite a rise in selling, general and administrative expenses. Largely due to the rise in operating profit, profit before tax increased ¥5,185 million (22.0%) year on year, to ¥28,765 million, and profit attributable to owners of the parent rose ¥2,671 million (20.1%) year on year, to ¥15,986 million. The ratio of profit attributable to owners of the parent to equity attributable to owners of the parent or equity capital (ROE) stood at 10.5%. Results for each business segment are described below. (Electronics & Devices) Revenue increased ¥29,354 million year on year, to ¥255,463 million, attributable to higher revenues in the electronic device and materials business and the semiconductor parts and manufacturing equipment business. Operating profit rose ¥1,489 million to ¥19,064 million due to higher profit in the ICT solution business and the semiconductor parts and manufacturing equipment business, while profit attributable to owners of the parent decreased ¥540million to ¥7,944 million. (Foods, Meat & Grain) Revenue increased ¥40,667 million year on year, to ¥285,284 million reflecting a rise in revenue in the meat products business and grain and feedstuff business. Operating profit rose ¥2,043 million, to ¥3,541 million due to higher profit in the meat products business and foods business, and profit attributable to owners of the parent increased ¥1,024 million, to ¥2,519 million. – 2 – (Steel, Materials & Plant) Revenue increased ¥51,162 million year on year, to ¥147,993 million, due to the higher revenue in the energy business and steel tubing business. Operating profit rose ¥2,212 million, to ¥4,052 million due to stronger profit in the steel tubing business and machine tools and industrial machinery business, and profit attributable to owners of the parent increased ¥1,199 million, to ¥3,259 million. (Motor Vehicles & Aerospace) (Other) Revenue decreased ¥5,259 million year on year, to ¥65,827 million due to the smaller revenue of the aerospace business. Operating profit decreased ¥392 million to, ¥1,663 million due to smaller profit in the aerospace business, while profit attributable to owners of the parent dropped ¥40 million to ¥1,457 million. Revenue increased ¥2,898 million from an earlier, to ¥13,395 million. Operating profit rose ¥313 million, to ¥1,009 million. Profit attributable to owners of the parent grew ¥85 million to ¥465 million. (ii) Future outlook In the next consolidated fiscal year, there is a concern that the escalation and lengthening of the war in Ukraine, the resulting divisions of global markets and acceleration of inflation, and the adverse influence on the economy of the switch to the monetary tightening policy worldwide may slow down the global economy, in addition to the lingering impact of COVID-19 mainly through China’s zero COVID policy. The Japanese economy will see a more gradual return to normal activity than other major economies, partly due to the higher resources and grain prices and the cheaper yen negatively affecting the terms of trade. In this environment, the Company will promote the priority initiatives of its medium-term vision,” future 135”, namely “sustainable growth in fundamental businesses and the expansion of the revenue base through business investments,” “response to technical innovation,” and “establishment of management infrastructure for achieving sustainable growth,” enhance initiatives to address the SDG and DX that have been included in the priority initiatives to be implemented in the last three years of the medium-term vision, and focus on creating further values. For the fiscal year ending March 31, 2023, the Company forecasts consolidated revenue of ¥850,000 million, operating profit of ¥31,500 million, profit before tax of ¥32,000 million, and profit attributable to owners of the parent of ¥18,000 million. (Assumptions for the calculation of performance forecast) – Exchange rate: 1 US dollar = 115 yen – Interest rates: Interest rates in Japan are expected to remain unchanged, while interest rates overseas are expected to rise. * Note on forward-looking statements: The above statements on performance forecast, such as the results forecasts, have been made based on information available to the Company at the time of the announcement and certain assumptions that the Company considers reasonable. The Company does not guarantee that the forecasts will be achieved. Actual results may differ materially from forecasts due to a number of factors. – 3 – (2) Overview of financial position (i) Assets, liabilities and equity Total assets at the end of the fiscal year under review increased ¥76,961 million from the end of the previous fiscal year, to ¥634,456 million. Interest-bearing debt increased ¥21,295 million the end of the previous fiscal year, to ¥143,452 million, mainly due to a rise in short-term borrowings. Net interest-bearing debt after deducting cash and deposits rose ¥10,722 million from the end of the previous fiscal year to ¥51,242 million. Interest-bearing debt does not include lease liabilities. In terms of equity, equity attributable to owners of the parent rose ¥15,558 million from the end of the previous fiscal year, to ¥159,484 million, chiefly due to the accumulation of profit attributable to owners of the parent and increases in other capital components resulting from yen depreciation. As a result, the ratio of equity attributable to owners of the parent came to 25.1%. The net debt-equity ratio (“net DER”) was 0.3 times. (ii) Cash flows Cash and cash equivalents at the end of the fiscal year under review rose ¥10,375 million from the end of the previous fiscal year, to ¥91,420 million. The state of cash flows and factors for each category for the fiscal year under review are as follows: (Cash flow from operating activities) Net cash provided by operating activities in the fiscal year under review stood at ¥15,382 million (versus ¥36,984 million provided in the previous fiscal year), chiefly reflecting the accumulation of operating income. (Cash flow from investing activities) Net cash used in investing activities in the fiscal year under review was ¥10,547 million (versus ¥9,927 million used in the previous fiscal year), mainly due to business investments including the acquisitions of subsidiaries and additional investment in companies accounted for by the equity method. (Cash flow from financing activities) Net cash provided by financing activities in the fiscal year under review amounted to ¥4,245 million (versus ¥37,497 million used in the previous fiscal year), mainly due to an increase in short-term borrowings and the issuance of bonds. (3) Basic policy for distribution of profits and dividends The Company regards the distribution of profits to shareholders as a critical management issue. It adopts a basic policy for dividends of taking into consideration factors such as operating results and the balance with appropriate internal reserves for growth investments in the future. The Company’s target payout ratio (total return ratio) under “future 135”, the Company’s medium-term vision, is set at 30-35%. For the fiscal year under review, the Company paid an interim dividend of ¥30 per share and plans to pay a year-end dividend of ¥35 per share, bringing the annual dividend to ¥65 per share. As a result, the payout ratio is estimated to be 34.0%. As for the dividends in the next fiscal year, we plan to increase the annual dividend by ¥5 and to pay ¥70 per share (interim dividend ¥35 and year-end dividend ¥35) in line with our target payout ratio of 30-35% set out in the medium-term vision and based on the performance forecast for the next fiscal year. The payout ratio is expected to be 32.5%. 2. Basic Approach to Selection of Accounting Standards The Company decided to voluntarily adopt International Financial Reporting Standards (IFRS), in place of the Japanese GAAP used previously, beginning with its consolidated financial statements in the annual securities report for the fiscal year ended March 31, 2016 (122nd Term), to improve the global comparability of financial information in capital markets. – 4 – 3. Consolidated Financial Statements and Major Notes (1) Consolidated statement of financial position Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other current assets Total current assets Non-current assets Property, plant and equipment Goodwill Intangible assets Investments accounted for using the equity method Trade and other receivables Other investments Other financial assets Deferred tax assets Other non-current assets Total non-current assets Total assets End of March 31, 2021 End of March 31, 2022 (Million yen) 81,045 207,285 99,711 6,512 26,339 420,894 42,246 10,296 24,926 11,869 1,280 33,536 7,079 2,318 3,046 136,601 557,495 91,420 236,453 121,018 12,006 31,190 492,090 42,087 10,624 24,912 15,121 807 35,997 7,101 2,175 3,537 142,365 634,456 – 5 – Liabilities and equity Liabilities Current liabilities Trade and other payables Bonds and borrowings Lease liabilities Other financial liabilities Income taxes payable Provisions Other current liabilities Total current liabilities Non-current liabilities Bonds and borrowings Lease liabilities Other financial liabilities Retirement benefits liabilities Provisions Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Capital surplus Retained earnings Treasury stock Other components of equity Exchange differences on translation of foreign operations Financial assets measured at fair value through other comprehensive income Cash flow hedges Total other components of equity Total equity attributable to owners of the parent Non-controlling interests Total equity Total liabilities and equity End of March 31, 2021 End of March 31, 2022 (Million yen) 182,980 57,723 6,999 5,442 2,942 607 28,213 284,909 64,434 10,328 1,807 6,517 1,944 5,527 1,533 92,093 377,003 27,781 27,034 78,070 (1,311) 1,633 10,163 554 12,351 143,926 36,566 180,492 557,495 214,822 73,707 6,674 7,567 4,893 503 30,290 338,459 69,745 10,158 1,608 6,842 1,712 5,453 1,193 96,714 435,173 27,781 27,164 89,280 (1,305) 5,296 10,068 1,198 16,563 159,484 39,798 199,282 634,456 – 6 – (2) Consolidated statements of income / consolidated statements of comprehensive income (Consolidated statements of income) Fiscal year from April 1, 2020 to March 31, 2021 (Million yen) Fiscal year from April 1, 2021 to March 31, 2022 Revenue Cost of sales Gross profit Selling, general and administrative expenses Other income (expenses) Gain (loss) on sale or disposal of property, plant and equipment and intangible assets, net Impairment loss on property, plant and equipment and intangible assets Other income Other expenses Total other income (expenses) Operating profit Finance income Interest income Dividend income Other finance income Total finance income Finance costs Interest expenses Other finance costs Total finance costs Profit before tax Income tax expense Profit for the year Profit for the year attributable to: Owners of the parent Non-controlling interests Total Share of profit (loss) of investments accounted for using the equity method Earnings per share attributable to owners of the parent Basic earnings per share (yen) Diluted earnings per share (yen) 649,142 (547,626) 101,515 (78,893) (174) (44) 1,688 (457) 1,013 23,635 161 1,100 19 1,281 (1,818) (210) (2,029) 692 23,580 (7,329) 16,251 13,315 2,935 16,251 159.44 159.34 767,963 (656,161) 111,801 (85,103) (103) (18) 3,597 (826) 2,649 29,347 166 1,114 66 1,348 (1,690) (1,691) (3,381) 1,451 28,765 (8,206) 20,559 15,986 4,573 20,559 191.42 191.15 – 7 – (Consolidated statements of comprehensive income) Profit for the year Other comprehensive income Items that will not be reclassified to profit or loss Financial assets measured at fair value through other comprehensive income Remeasurement of defined benefit pension plans Share of other comprehensive income of investments accounted for using the equity method Total items that will not be reclassified to profit or loss Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations Cash flow hedges Share of other comprehensive income of investments accounted for using the equity method Total items that may be reclassified to profit or loss Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year attributable to: Owners of the parent Non-controlling interests Total Fiscal year from April 1, 2020 to March 31, 2021 (Million yen) Fiscal year from April 1, 2021 to March 31, 2022 16,251 3,395 229 8 3,633 931 441 (77) 1,295 4,929 21,180 18,031 3,148 21,180 20,559 462 (7) 0 455 4,071 642 517 5,231 5,686 26,246 20,433 5,812 26,246 – 8 – (3) Consolidated statement of changes in equity (Million yen) Equity attributable to owners of the parent Share capital Capital surplus Retained earnings Treasury stock Balance as of April 1, 2020 Profit Other comprehensive income Total comprehensive income for the year Dividends Dividends paid to non-controlling interests Acquisition of treasury stock Disposition of treasury stock Equity transactions with non-controlling interests Share-based payment transactions Total transactions with owners Transfer from other components of equity to retained earnings Balance as of March 31, 2021 Profit Other comprehensive income Total comprehensive income for the year Dividends Dividends paid to non-controlling interests Acquisition of treasury stock Disposition of treasury stock Equity transactions with non-controlling interests Share-based payment transactions Total transactions with owners Transfer from other components of equity to retained earnings Balance as of March 31, 2022 27,781 – 26,957 27,781 27,034 – 1 30 45 76 – 0 19 110 129 – – – Other components of equity Exchange differences on translation of foreign operations Financial assets measured at fair value through other comprehensive income 6,816 3,308 3,308 69,540 13,315 13,315 (5,010) (5,010) 225 78,070 15,986 15,986 (5,010) (5,010) 235 89,280 (1,309) (1,311) – (1) 0 (1) – (2) 8 5 930 703 703 – 1,633 3,663 3,663 – – 38 10,163 115 115 – (210) 10,068 27,781 27,164 (1,305) 5,296 – 9 – (Million yen) Equity attributable to owners of the parent Other components of equity Cash flow hedges Remeasurement of defined benefit pension plans Total equity attributable to owners of the parent Non-controlling interests Total equity Balance as of April 1, 2020 Profit Other comprehensive income Total comprehensive income for the year Dividends Dividends paid to non-controlling interests Acquisition of treasury stock Disposition of treasury stock Equity transactions with non-controlling interests Share-based payment transactions Total transactions with owners Transfer from other components of equity to retained earnings Balance as of March 31, 2021 Profit Other comprehensive income Total comprehensive income for the year Dividends Dividends paid to non-controlling interests Acquisition of treasury stock Disposition of treasury stock Equity transactions with non-controlling interests Share-based payment transactions Total transactions with owners Transfer from other components of equity to retained earnings Balance as of March 31, 2022 113 441 441 – 554 643 643 – 1,198 Total other components of equity 7,860 – 4,716 4,716 – – – – – – – (225) 12,351 – 4,446 4,446 – – – – – – – (235) 16,563 – 263 263 – (263) – 24 24 – (24) – 130,829 13,315 4,716 18,031 (5,010) – (1) 1 30 45 (4,934) – 143,926 15,986 4,446 20,433 (5,010) – (2) 8 19 110 (4,875) – 159,484 35,344 2,935 212 3,148 (1,750) (177) (1,927) 36,566 4,573 1,239 5,812 (2,564) (16) (2,580) 39,798 166,174 16,251 4,929 21,180 (5,010) (1,750) (1) 1 (146) 45 (6,862) – 180,492 20,559 5,686 26,246 (5,010) (2,564) (2) 8 3 110 (7,455) – 199,282 – 10 – (4) Consolidated statements of cash flows Cash flows from operating activities: Fiscal year from April 1, 2020 to March 31, 2021 (Million yen) Fiscal year from April 1, 2021 to March 31, 2022 Cash flows from investing activities: Profit for the year Depreciation and amortization Impairment loss on property, plant and equipment and intangible assets Finance income and costs Share of (profit) loss of investments accounted for using the equity method (Gain) loss on sale or disposal of property, plant and equipment and intangible assets Income tax expense (Increase) decrease in trade and other receivables (Increase) decrease in inventories Increase (decrease) in trade and other payables Increase (decrease) in retirement benefit liabilities Other Sub total Interest received Dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities Payments for property, plant and equipment Proceeds from sales of property, plant and equipment Payments for intangible assets Purchases of other investments Proceeds from sale of other investments Proceeds from (payments for) acquisition of subsidiaries Proceeds from (payments for) sale of subsidiaries Payments for acquisition of businesses Increase in loans receivable Proceeds from collection of loans receivable Other Net cash provided by (used in) investing activities Increase (decrease) in short-term borrowings (three months or less), net Proceeds from short-term borrowings (more than three months) Repayment of short-term borrowings (more than three months) Proceeds from long-term borrowings Repayment of long-term borrowings Proceeds from issuance of bonds Redemption of bonds Dividends paid Purchase of shares of subsidiaries from non-controlling interests Capital contribution from holders of non-controlling interests Refunds of contribution to holders of non-controlling interests Dividends paid to non-controlling interests Repayments of lease liabilities Other Net cash provided by (used in) financing activities Cash flows from financing activities Increase (decrease) in cash and cash equivalents, net Cash and cash equivalents at the beginning of the year Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the year – 11 – 16,251 11,555 44 747 (692) 174 7,329 (653) 1,633 9,389 (276) (2,031) 43,471 209 1,236 (1,782) (6,149) 36,984 (4,413) 421 (1,058) (4,611) 139 (210) － (45) (308) 333 (173) (9,927) (15,686) 527 (734) 9,616 (11,171) － (5,050) (5,001) (260) 11 － (1,854) (7,890) (3) (37,497) (10,440) 91,105 380 81,045 20,559 12,242 18 2,033 (1,451) 103 8,206 (21,869) (18,051) 22,732 184 (3,283) 21,425 171 1,656 (1,673) (6,196) 15,382 (3,613) 1,776 (694) (6,534) 1,801 (2,362) 12 (688) (269) 421 (396) (10,547) 14,264 582 (500) 16,326 (20,430) 9,929 (114) (5,004) － 6 (17) (2,564) (8,229) (3) 4,245 9,080 81,045 1,295 91,420 (5) Notes on the consolidated financial statements (Notes on the going concern assumption) Not applicable. – 12 – (Segment information) Profit figures for reportable segments are based on profit attributable to owners of the parent. Inter-segment revenue and transfers are determined according to transaction prices with outside customers. Ⅰ. Fiscal year from April 1, 2020 to March 31, 2021 Revenue External Electronics & Devices Foods, Meat & Grain Reported segments Steel, Materials & Plant Motor Vehicles & Aerospace Sub-total Other (Note 1) Adjustment (Note 2) Consolidated 226,109 244,617 96,831 71,086 638,644 10,497 649,142 (Million yen) Inter-segment 287 331 208 (540) Total revenues 226,397 244,618 96,868 71,092 638,976 10,706 (540) 649,142 Operating profit (loss) Segment profit (loss) 17,575 8,484 1,498 1,495 2,055 1,497 22,969 13,538 696 380 (30) (603) 23,635 13,315 1 36 1,840 2,060 5 6,194 1,513 2,600 923 11,231 336 (12) 11,555 (25) 20 463 33 492 199 – 692 202,908 129,747 128,550 48,436 509,643 12,508 35,343 557,495 337 1,777 6,449 372 8,936 2,935 (2) 11,869 – – Other profit or loss: Depreciation and amortization Share of profit (loss) of investments accounted for using the equity method Segment assets Other assets: Investments accounted for using the equity method Capital expenditures (Note 3) (Note 1) “Other” is a business segment that is not included in the reportable segments and includes the logistics and insurance 2,107 550 1,826 251 4,736 1,222 452 6,411 service business and geotech business, etc. (Note 2) Adjustments are as follows. (1) The adjustment of -¥30 million for segment profit (loss) includes an inter-segment elimination of -¥30 million. (2) The adjustment of -¥603 million for segment profit (loss) includes an inter-segment elimination of -¥25 million and corporate expenses that are not allocated to any particular segment of -¥578 million. Corporate expenses include the difference between actual income taxes incurred by the Company and income taxes allocated to each segment by an internal calculation method. (3) Adjustment for segment assets amounting to ¥35,343 million includes inter-segment elimination of -¥10,165 million and Group assets of ¥45,509 million that have not been distributed to reportable segments. These Group assets consist mainly of cash and bank deposits in connection with financing activities and assets such as investments in securities. (4) Adjustment for depreciation and amortization amounting to -¥12 million includes inter-segment elimination of -¥12 (5) Adjustment for investments accounted for using the equity method amounting to -¥2 million includes intersegment million. elimination of -¥2 million. (6) Adjustment for capital expenditure amounting to ¥452 million includes inter-segment elimination of -¥48 million and Group assets of ¥500 million that have not been distributed to reportable segments. These Group assets consist mainly of leased equipment, etc. for systems of subsidiaries. (Note 3) Capital expenditures do not include amounts pertaining to right-of-use assets. – 13 – – – 1 Ⅱ. Fiscal year from April 1, 2021 to March 31, 2022 Revenue External Electronics & Devices Foods, Meat & Grain Reported segments Steel, Materials & Plant Motor Vehicles & Aerospace Sub-total Other (Note 1) Adjustment (Note 2) Consolidated 255,463 285,284 147,993 65,827 754,567 13,395 767,963 Inter-segment 501 35 6 544 229 (773) Total revenues 255,964 285,285 148,028 65,833 755,112 13,624 (773) 767,963 Operating profit (loss) Segment profit (loss) 19,064 7,944 3,541 2,519 4,052 3,259 1,663 1,457 28,321 15,180 1,009 465 16 340 29,347 15,986 (Million yen) Other profit or loss: Depreciation and amortization Share of profit (loss) of investments accounted for using the equity method Segment assets Other assets: Investments accounted for using the equity method Capital expenditures (Note 3) 6,700 1,578 2,558 1,040 11,879 384 (20) 12,242 (28) 75 1,154 44 1,246 204 – 1,451 214,649 151,945 156,952 54,186 577,734 13,394 43,327 634,456 369 1,872 9,625 － 11,868 3,256 (2) 15,121 (Note 1) “Other” is a business segment that is not included in the reportable segments and includes the logistics and insurance 1,739 887 1,120 347 4,096 99 641 4,837 service business and geotech business, etc. (Note 2) Adjustments are as follows. (1) The adjustment of ¥16 million for segment profit (loss) includes an inter-segment elimination of ¥16 million. (2) The adjustment of ¥340 million for segment profit (loss) includes an inter-segment elimination of ¥4 million and corporate expenses that are not allocated to any particular segment of ¥336 million. Corporate expenses include the difference between actual income taxes incurred by the Company and income taxes allocated to each segment by an internal calculation method. (3) Adjustment for segment assets amounting to ¥43,327 million includes inter-segment elimination of -¥9,413 million and Group assets of ¥52,740 million that have not been distributed to reportable segments. These Group assets consist mainly of cash and bank deposits in connection with financing activities and assets such as investments in securities. (4) Adjustment for depreciation and amortization amounting to -¥20 million includes inter-segment elimination of -¥20 (5) Adjustment for investments accounted for using the equity method amounting to -¥2 million includes intersegment million. elimination of -¥2 million. (6) Adjustment for capital expenditure amounting to ¥641 million includes inter-segment elimination of -¥94 million and Group assets of ¥735 million that have not been distributed to reportable segments. These Group assets consist mainly of leased equipment, etc. for systems of subsidiaries. (Note 3) Capital expenditures do not include amounts pertaining to right-of-use assets. – 14 – (Per share information) (i) Profit for the year per share (yen) Fiscal year from April 1, 2020 to March 31, 2021 Fiscal year from April 1, 2021 to March 31, 2022 Basic earnings per share (yen) 159.44 191.42 Diluted earnings per share (yen) 191.15 (Note) The amount of diluted earnings per share is calculated by deeming the shares authorized to be issued subject to conditions 159.34 which are expected to be provided under the performance-linked stock compensation plan as potential shares. (ii) Basis for calculation of profit for the year per share Fiscal year from April 1, 2020 to March 31, 2021 Fiscal year from April 1, 2021 to March 31, 2022 Profit attributable to owners of the parent (million yen) Amount not attributable to common shareholders of the parent (million yen) Profit used to calculate basic earnings per share (million yen) Profit used to calculate diluted earnings per share (million yen) Weighted average number of common shares (thousand shares) Increase due to performance-linked stock compensation plan (thousand shares) Weighted average number of shares adjusted for dilution (thousand shares) 13,315 – 13,315 13,315 83,511 54 83,565 15,986 – 15,986 15,986 83,514 117 83,631 (Note) In the calculation of the earnings per share, the shares of the Company owned by the stock issuance trust for officers below are included in the treasury stock which is deducted in the calculation of average number of shares during the fiscal year: Previous consolidated fiscal year Consolidated fiscal year under review 702,500 shares 699,176 shares (Significant subsequent events) Not applicable. – 15 – Supplementary Material of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (IFRS)Note on forward-looking statements:The forward-looking statements, including results forecasts, included in this material are based on information that the Company has obtained and certain assumptions that the Company considers reasonable. The Company does not promise to achieve them. Actual results may differ materially from forecasts due to a number of factors.This information is subject to change without notice and users are, therefore, advised to use this information and material, together with information obtained by other means, and to exercise their own judgment.The Company does not assume any liability or responsibility for any loss or damage arising from use of this material.Since the figures shown are rounded off to the nearest 1 billion yen, the sum of each item and the total may differ.© KANEMATSU CORPORATION ALL RIGHTS RESERVED.＜Summary＞◆Revenue and profits both increased year on year. Profit attributable to owners of the parent rose 20% year on year.　　　◇Revenue　　　◇Operating profit　　　◇Profit before tax　　　◇Profit attributable to owners of the parent768.0 billion yen29.3 billion yen28.8 billion yen16.0 billion yen18.3％24.2％22.0％20.1％upupupupFor the fiscal year ending March 31, 2023, profit attributable to owners of the parent is forecast to grow by 12.6% year on year to 18.0 billionyen with the anticipated contribution to profits from business investments.1. Profit & loss statement(Unit：billion yen)End of March31, 2021End of March31, 2022Year-on-yearEnd of March 31, 2023ChangeChange(%)ForecastYoY Change(%)RevenueGross profitSelling, general and administrative expensesOther income (expenses)Operating profitInterest income (expenses)Dividend incomeOther finance income (costs)Finance income (costs)Share of profit (loss) of investments accounted forusing the equity methodProfit before taxIncome tax expenseProfit for the periodProfit attributable to owners of the parent649.1101.5(78.9)768.0111.8( 85.1)1.023.6(1.7)1.1(0.2)(0.7)0.723.6(7.3)16.313.32.629.3( 1.5)1.1( 1.6)( 2.0)1.528.8( 8.2)20.616.0118.810.3( 6.2)1.65.70.10.0( 1.4)( 1.3)( 0.9)0.85.24.32.718.3%10.1%161.5%24.2%109.7%22.0%26.5%20.1%——850.010.7% 【Revenue】Increased 118.8 billion yen, driven by the Steel, Materials& Plant segment and Foods, Meat & Grain segment.—————31.57.3% 【Operating profit】Grew 5.7 billion yen, driven by the Steel, Materials &Plant segment and the Foods, Meat & Grain segment.– 【Profit before tax】-Increased 5.2 billion yen mainly due to a rise in operatingprofit.32.011.2%– 【Profit attributable to owners of the parent】18.012.6%Increased 2.7 billion yen associated with a rise in profitbefore tax.Earnings per share (yen)159.44191.4231.9820.1%215.5312.6%© KANEMATSU CORPORATION ALL RIGHTS RESERVED.12. Segment information(Unit: billion yen)End ofMarch 31,2021End ofMarch 31,2022ChangeFYE2023ForecastYoYChangeEnd ofMarch 31,2021End ofMarch 31,2022ChangeFYE2023ForecastYoYChangeEnd ofMarch 31,2021End ofMarch 31,2022ChangeFYE2023ForecastYoYChangeRevenueOperating profitProfit attributable to owners of the parentElectronics & DevicesFoods, Meat & GrainSteel, Materials & PlantMotor Vehicles & AerospaceTotal for reportable segmentsOther (including adjustment)Grand total29.4280.010%17.619.1226.1244.696.871.1638.610.5649.1255.5285.3148.065.8754.613.4768.040.7305.07%51.2170.015%(5.3)80.022%115.9835.011%2.915.012%118.8850.011%1.51.82.123.00.723.6(0.4)1.52.02.25.40.45.720.03.65.31.730.65%2%31%2%8%0.9 (12%)31.57%3.54.11.728.31.029.38.51.52.11.513.5(0.2)13.37.92.53.31.515.20.816.0(0.5)(0.0)1.01.21.61.02.79.52.83.91.520%11%20%3%17.717%0.3 (63%)18.013%（Billion yen）（Billion yen）（Billion yen）© KANEMATSU CORPORATION ALL RIGHTS RESERVED.23. Operating profit ＜Segment＞（Billion yen）Causes of year-on-year increase/decrease35.030.025.020.015.010.05.01.80.70.019.13.54.11.71.52.02.2(0.4)17.61.52.1E n d o f M a r c h 3 1 , 2 0 2 1E n d o f M a r c h 3 1 , 2 0 2 21.023.6 billion yen29.3 billion yen【Electronics & Devices】1.5 billion yen upThe ICT solution business performed strongly, mainly due to the growth in projects related tonetwork security and storage-related projects. The mobile business was weak due to thesmaller fee income including monetary assistance provided to shops during the COVID-19pandemic, although foot traffic recovered. The semiconductor parts and manufacturingequipment business remained strong with the growth in shipments of in-vehiclesemiconductor parts and semiconductor equipment, among others, on the back of robustdemand.【Foods, Meat & Grain】2.0 billion yen upIn the meat products business, operating profit increased sharply after the struggle in foodservice-related sales in the previous year, aided by the rising prices of livestock products ingeneral. The grain and feedstuff business was weak mainly due to valuation losses resultingfrom the skyrocketing prices in 4Q. The foods business was strong on the back of the growthin the transactions of products for the retail market.【Steel, Materials & Plant】2.2 billion yen upThe steel tubing business performed solidly following the recovery of energy demand. Themachine tools and industrial machinery business remained strong, recovering from thebusiness environment in the previous year when the business had been strongly affected byCOVID-19. Meanwhile, the energy business was weak due to the valuation losses of futurescontracts.【Motor Vehicles & Aerospace】0.4 billion yen downThe aerospace business remained sluggish as contracts with government agencies werebetween seasons. In the motor vehicles and parts business, however, transactions of motorparts remained strong given the market recovery from the COVID-19 pandemic and thecheaper yen.© KANEMATSU CORPORATION ALL RIGHTS RESERVED.34. Cash Flows and Financial Status(Unit: billion yen)End of March31, 2021End of March31, 2022Change【CF from operating activities】(Unit: billion yen)End of March 31,2021End of March 31,2022Change【Total assets】　（Note: The amount of impact associated with the application of IFRS 16 Leases）【CF from financing activities】CF from operating activitiesCF from investing activitiesFree cash flowsCF from financing activitiesCF from operating activitiesCF from financing activitiesTotal assetsGross interest-bearing debt (Note 1)Net interest-bearing debtShareholders’ equity (Note 2)　 Retained earningsNet cash provided by operating activities was 15.4 billion yen, mainly reflecting theaccumulation of operating revenue. Working capital increased with the recovery andexpansion of sales activities and rises in product prices.【CF from investing activities】Net cash used in investing activities was 10.5 billion yen mainly due to businessinvestments, including the acquisition of subsidiaries and additional investment incompanies accounted for by the equity method.Net cash provided by financing activities was 4.2 billion yen, mainly due to an increase inshort-term borrowings and the issuance of bonds.Increased 77.0 billion yen mainly due to a rise in trade and other receivables and inventoriesfollowing the recovery and expansion of sales activities and rise in product prices.【Interest-bearing debt】Increased 10.7 billion yen mainly due to a rise in short-term borrowings.37.0(9.9)27.1(37.5)7.9(7.9)557.5122.240.5143.978.115.4(10.5)4.84.28.2(8.2)634.5143.551.2159.589.316.6(21.6)(0.6)(22.2)41.70.3(0.3)77.021.310.715.611.24.2　 Other components of equity(Note1）Gross interest-bearing debt = Total amount of bonds and loans minus lease liabilities(Note2）Shareholders’ equity = Total equity attribute to owners of the parent12.4【Shareholders’ equity】Increased 15.6 billion yen chiefly due to the accumulation of profit attributable to owners ofthe parent and increases in other capital components resulting from yen depreciation.Equity ratio (Note 3)Net debt-equity ratio (Note 4)(Note 3) Equity ratio = Shareholders’ equity / Total assets(Note 4) Net debt-equity ratio = Net interest-bearing debt / Equity capital25.8%25.1% 0.7% down0.3 times0.3 times almost sameEquity ratio is 25.1%. Net debt-equity ratio stood at 0.3 times.© KANEMATSU CORPORATION ALL RIGHTS RESERVED.4 5. Dividends and Capital Efficency 【Dividends】End of March 31, 2019End of March 31, 2020End of March 31, 2021End of March 31, 2022End of March 31, 2023 (forecast)　Annual dividend (yen per share)Consolidated payout ratio6030.3%6034.8%6037.6%6534.0%7032.5%【Profit attributable to owners of the parent, ROE & ROIC】Billion yen16.6Full-year profitROE（full-year）ROIC18.013.8%14.416.011.2%10.5%13.39.7%6.4%5.3%4.9%5.6%18.016.014.012.010.08.06.04.02.00.0End of March 31, 2019End of March 31, 2020End of March 31, 2021End of March 31, 2022End of March 31, 2023(forecast)© KANEMATSU CORPORATION ALL RIGHTS RESERVED.5