7th FiscalYear（From April 1,2012
to March 31, 2013）

Consolidated Financial Statements
Annual（From April 1,2012
to March 31, 2013

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

）Consolidated Balance Sheet(as of March 31, 2013)(Thousands of Yen)
AssetsLiabilities

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

21,038,753
5,740,662
4,956,131
7,702,109
1,389,506
1,253,496△ 3,153

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

38,738,468
27,412,747
11,058,454
6,012,121
169,786
9,185,792
766,064
220,527
10,295,380
10,176,576
118,804
1,030,340
150,864
349,279
666,404△ 136,207

Current Liabilities
Trade payables (notes and accounts)
Current portion of long-term borrowings
Other

7,177,627
2,248,941
1,938,000
2,990,685

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

38,619,939
25,300,000
5,808,000
2,784,638
240,615
2,790,918
1,695,766

Total Liabilities

45,797,567
Net Assets

Shareholders Equity
Paid in capital
Capital surplus
Retained earnings
Accumulated other comprehensive income
Valuation difference on securities
Foreign currency translation adjustment
Minority Interest
Net Assets

Total Assets

59,777,221

Total liabilities and net assets

13,220,605
34,942,693
40,271,024△ 61,993,113△ 65,995△ 990△ 65,004
825,044
13,979,654
59,777,221

Consolidated Income Statement(from April 1,2012 to March 31, 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 gains
Extraordinary loss
Income before income taxes and minority interests
Income taxes
Adjustment to income taxes
Profit before minority interests
Minority interests in loss of consolidated subsidiaries
Net profit

29,372,603
21,801,920
7,570,683
6,749,835
820,847
78,703103,277
773,240
1,548,120
1,208,199

955,220

2,756,319
980,251

7,007,058
1,816,644
4,210,162
106,051△ 1,175,204△ 1,069,153
5,279,315
7,414
5,286,729

Consolidated Cash Flow Statement(from April 1,2012 to March 31, 2013)

CategoryⅠ

Cash flow from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Interest expense
Change in trade receivablesChange in inventories
Change in trade payables
Other
SubtotalInterest and dividend income received
Interest payments
Extraordinary severance payments
Income taxes
Cash flow from operating activities

Ⅱ4,210,162
3,215,502
728,3541,548,120
952,493
941,412△ 1,294,193△ 2,835,570
7,466,281
168,201△ 1,531,205△ 949,317△ 120,563
5,033,396

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

Ⅲ(Thousands of Yen)
Amount△ 1,024,181
5,980,466
4,956,284

Cash flow from financing activities
Decrease in long-term borrowings
Redemption of bonds
Repayment of lease obligations
Other
Cash flow from financing activities

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※

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)△ 330,000△ 21,022,407△ 143,775△ 626,322△ 22,122,504
89,292△ 12,043,529
17,682,592
5,639,062
5,740,662
101,600
5,639,062