8th Fiscal Year （From April 1, 2013
to March 31, 2014）

Consolidated Financial Statements
Semi-Annual（From April 1, 2013
to September 30, 2013

Consolidated Subsidiaries:
Covalent Materials Tokuyama Corporation
Covalent Materials Nagasaki Corporation
Covalent Sales Corporation
Covalent Materials USA Inc.
Covalent Machinery Corporation
Denko Co., Ltd.

）Consolidated Balance Sheet(as of September 30, 2013)(Thousands of Yen)
AssetsLiabilities

Current Assets
Cash and deposits
Trade receivables (notes and accounts)
Inventories
Deferred tax assets
OtherAllowance for doubtful accounts

20,974,6914,668,939
5,579,705
7,392,597
1,681,847
1,656,375△ 4,774

Noncurrent Assets
Property, plant and equipment
Buildings
MachineryEquipment
LandLease assets
OtherIntangible assets
Goodwill
OtherInvestments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts

36,451,277
25,350,826
10,620,584
5,264,637
145,870
8,398,512
698,985
222,236
9,948,047
9,863,558
84,4891,152,403
160,115315,865
772,298△ 95,876

Total Assets

57,425,968

Current Liabilities
Trade payables (notes and accounts)
Current portion of long-term loans payable

Other

7,581,106
2,743,659
1,938,000
2,899,446

Noncurrent Liabilities
Bonds payable
Long-term loans payable
Accrued retirement benefit costs
Asset retirement obligations
Deferred tax liabilities
Other

34,122,532
25,300,000
919,000
2,963,361
238,6992,780,226
1,921,244

Total Liabilities

41,703,639
Net Assets

Shareholders Equity
Paid in capital
Capital surplus
Retained earnings

14,865,022
34,942,693
40,271,024△ 60,348,695

Accumulated other comprehensive income
Valuation difference on securities
Foreign currency translation adjustment

39,175△ 1,700
40,876

Minority Interests

818,130

Net Assets

15,722,329

Total liabilities and net assets

57,425,968

Consolidated Income Statement(from April 1, 2013 to September 30, 2013)(Thousands of Yen)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Amortization of negative goodwill
Other
Non-operating loss
Interest expense
Other
Recurring loss
Extraordinary gain and loss
Profit before income taxes
Income taxes
Adjustment to income taxes
Profit before minority interests
Minority interests in loss of consolidated subsidiaries
Net profit

14,883,021
10,594,230
4,288,790
3,455,878
832,912
1,578
50,691102,007954,094
99,487

154,277

1,053,582
66,392

1,684,512
1,618,120
255,115△ 274,499△ 19,383
1,637,503
6,913
1,644,417

Consolidated Cash Flow Statement(from April 1, 2013 to September 30, 2013)

CategoryⅠ

Cash flow from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Interest expense
Change in trade receivables
Change in inventories
Change in trade payables
OtherⅡ

Subtotal

1,618,120
1,275,485
365,124
954,094△ 809,785
141,491
696,448△ 1,812,847
2,428,131Interest and dividend income received
Interest payments
Income taxes
Cash flow from operating activities

10,455△ 621,822△ 74,767
1,741,997

Cash flow from investing activities
Purchase of property, plant and equipment
Other
Cash flow from investing activities

Ⅲ(Thousands of Yen)
Amount

1,727,693
533,901
2,261,595

Cash flow from financing activities
Decrease in long-term borrowings
Repayment of lease obligations
Other
Cash flow from financing activities△ 4,889,000△ 71,123△ 162,666△ 5,122,789

ⅣⅤ

Difference in cash and deposits from currency conversion
Change in cash and deposits

ⅥⅦ

Cash and deposits at beginning of period
Cash and deposits at end of period

5,639,062
4,567,339※

Difference in cash and deposits from balance sheet
Cash and deposits at end of period (balance sheet)
Time deposits with terms extending over 3 months
Cash and deposits at end of period (cash flow statement)

4,668,939
101,600
4,567,339

47,473△ 1,071,722