This document has been translated from the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the Fiscal Year Ended March 31, 2024 [JGAAP]
Company Name:

May 15, 2024
Stock Exchange Listing: Tokyo

Kanto Denka Kogyo Co., Ltd.

Code Number: 4047 https://www.kantodenka.co.jp/english/
Representative:
Jun’ichi Hasegawa, President
Contact: Masanobu Shirokura, General Manager, Public Relations & Investor Relations Dept. Phone: +81-3-4236-8804
Scheduled date of Ordinary General Shareholders’ Meeting:
Scheduled date to commence dividend payments:
June 27, 2024
June 28, 2024
Scheduled date for submitting the Annual Securities Report:
June 27, 2024
Availability of supplementary briefing material on financial results: Yes
Financial results briefing session: Yes (For institutional investors and analysts)

1. Consolidated financial results for the fiscal year ended March 31, 2024 (April 1, 2023–March 31, 2024)(Amounts are rounded down to the nearest million yen)

(1) Consolidated operating results(% figures are the rate of year-on-year increase or decrease)

Net sales
Millions of yen

Operating profit

Profit attributable toowners of parent

Ordinary profit%

Millions of yen%

Millions of yen%

Millions of yen%(17.7)
Fiscal year ended March 31, 2024
64,76826.3
Fiscal year ended March 31, 2023
78,675(Note) Comprehensive income:Fiscal year ended March 31, 2024: ¥(1,443) million (–%)
Fiscal year ended March 31, 2023: ¥10,704 million (27.8%)(1,968)12,947―16.0(1,304)
13,679―22.7(4,610)
9,382

―
20.9

Basic earnings per share

Diluted basic
Ordinary profit to Operating profit to
Return on equity
earnings per sharetotal assets ratio
net sales ratio

Yen

Fiscal year ended March 31, 2024
(80.25)
Fiscal year ended March 31, 2023
163.32(Reference) Equity gains (losses) of affiliated companies:
Fiscal year ended March 31, 2024: ¥― million
Fiscal year ended March 31, 2023: ¥― million(2) Consolidated financial position
Total assets

%

%

%

—
—

Yen

(7.0)
14.9

(1.0)
11.4

(3.0)
16.5

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

As of March 31, 2024
125,302
As of March 31, 2023
130,762(Reference) Equity capital:
As of March 31, 2024: ¥64,006 million
As of March 31, 2023: ¥67,480 million

65,57868,77451.1
51.6

1,114.07
1,174.54

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period(3) Consolidated cash flows
Cash flows fromoperating activities
Millions of yen

Millions of yen

Millions of yen

Millions of yen

11,208
7,291(10,554)(16,627)

1,780
4,424

25,22521,987

Fiscal year ended March 31, 2024
Fiscal year ended March 31, 2023

2. Dividends
Annual dividends per share
End of 1Q End of 2Q End of 3Q Year-end

Total

Total dividend
amount

Yen

Yen

Yen

Yen

Yen

Millions of yen

Fiscal year ended March 31, 2023
Fiscal year ended March 31, 2024

—
—

10.00
7.00

—
—

23.00
7.00

33.00
14.00

1,898
805

Fiscal year ending March 31, 2025
(Forecast)

—

8.00

—

8.00

16.00

Ratio of
Dividend
dividends to net
payout ratio
assets(Consolidated) (Consolidated)
%

%

20.2

3.0
1.2

―
31.7

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2025 (April 1, 2024–March 31, 2025)(% figures are the rate of year-on-year increase or decrease)

Net salesFirst half
Full year

Operating profit

Millions of yen%

Millions of yen

31,00069,000(11.0)
6.5

1,000
4,900

Profit attributable toowners of parent

Ordinary profit%

Millions of yen%

Millions of yen

1,000
4,800

625.3
―

300
2,900

―
―

―

Basic earnings
per share
%

Yen

16.6

5.22
50.48

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation):
Not applicable
New: ― companies (company names); Removed: ― companies (company names)(2) Changes in accounting policies, changes in accounting estimates and retrospective restatementi. Changes in accounting policies accompanying amendments to accounting standards, etc.: None
ii. Changes in accounting policies other than i.: Noneiii. Changes in accounting estimates: None
iv. Retrospective restatement: None
(3) Number of shares issued (common stock)i. Number of shares issued at the end of the period(including treasury shares)
ii. Number of treasury shares at the end of the periodiii. Average number of shares during the period

57,546,050 shares As of March 31, 2023

As of March 31, 2024

57,546,050 shares

As of March 31, 2024

93,207 shares As of March 31, 2023

93,137 shares

As of March 31, 2024

57,452,894 shares As of March 31, 2023

57,451,484 shares(Reference) Summary of non-consolidated financial results
Non-consolidated financial results for the fiscal year ended March 31, 2024 (April 1, 2023–March 31, 2024)(1) Non-consolidated operating results

Net sales

Operating profit(% figures are the rate of year-on-year increase or decrease)
Ordinary profit
ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

55,691
72,044(22.7)
29.2(4,217)
11,211―
24.3(2,846)
12,217―30.0(5,247)
8,404

―
26.3

Fiscal year ended March 31, 2024
Fiscal year ended March 31, 2023

Basic earnings per share

Diluted basic earnings per share
Yen

Fiscal year ended March 31, 2024
Fiscal year ended March 31, 2023
(2) Non-consolidated financial position
Total assets
As of March 31, 2024
As of March 31, 2023

Yen

(91.34)146.28——

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

105,804
110,267

52,66258,24149.8
52.8

916.62
1,013.73(Reference) Equity capital:
Fiscal year ended March 31, 2024: ¥52,662 million
Fiscal year ended March 31, 2023: ¥58,241 million
Notes:- Summary of financial results are not subject to audit by a certified public accountant or an auditing firm.
- Proper use of performance forecasts, and other special matters(Notes to performance forecasts and other forward-looking statements)
The performance outlooks and other forward-looking statements in this document are based on information currently available to the Company and certain assumptions
that the Company deems reasonable, and are not intended to be a promise by the Company that they will be realized. Actual results may differ significantly due to various
factors. Please refer to "1. Overview of operating results, etc., (4) Future outlook" on page 4 of the attached materials for information on the performance forecasts.
(How to obtain supplementary financial results briefing materials)
The Company plans to hold a financial results briefing for institutional investors and securities analysts on Thursday, May 23, 2024. Supplementary financial results
briefing materials to be used at this briefing will be posted on the Company's website after the session.

Contents
1. Overview of operating results, etc. ...................................................................................................................................2(1) Operating results .....................................................................................................................................................2(2) Financial position ....................................................................................................................................................3(3) Cash flows ...............................................................................................................................................................3(4) Future outlook .........................................................................................................................................................4(5) Basic policy on profit distribution and dividends for the current and next fiscal years ..........................................5
2. Basic approach to the selection of accounting standards ..................................................................................................5
3. Consolidated financial statements and notes.....................................................................................................................6(1) Consolidated balance sheet .....................................................................................................................................6(2) Consolidated statement of income and consolidated statement of comprehensive income ....................................8
Consolidated statement of income ............................................................................................................................8
Consolidated Statement of Comprehensive Income .................................................................................................9(3) Consolidated Statement of Changes in Equity ......................................................................................................10(4) Consolidated Statement of Cash Flows .................................................................................................................12(5) Notes to the consolidated financial statements ......................................................................................................13(Notes on premise of going concern) ......................................................................................................................13(Significant matters forming the basis for preparation of the consolidated financial statements) ..........................13(Segment information, etc.) ....................................................................................................................................15(Per share information) ...........................................................................................................................................19(Significant subsequent events) ..............................................................................................................................19

1

1. Overview of operating results, etc.
(1) Operating results
i. Operating results for the fiscal year under review
In the fiscal year ended March 31, 2024, the Japanese economy showed signs of a gradual recovery due
to the positive effects of various government policies under an improving employment and income
environment. However, severe conditions continued to prevail. Overseas, the outlook remained uncertain
due to the need for caution amid downside risks stemming from such factors as global monetary
tightening and concerns over the prospects for the Chinese economy, as well as inflation, geopoliticaltensions in the Middle East, and fluctuations in financial and capital markets.
The chemical industry also continued to face a challenging business environment, with rising raw
material, fuel and logistics prices coupled with the impact of production adjustments in thesemiconductor and electronic materials industries.
Against this backdrop, although the Kanto Denka Group has been actively promoting sales activities,business performance was greatly impacted, primarily due to a significant decline in demand in the Fine
Chemicals Division.
Net sales amounted to ¥64,768 million, down ¥13,906 million, or 17.7%, year on year. Meanwhile,
ordinary loss totaled ¥1,304 million compared with ordinary profit of ¥13,679 million in the previous
fiscal year. The loss was mainly due to the persistent high cost of sales for battery materials andrecognition of a loss on valuation of inventories, in addition to the decline in net sales. In terms of net
profit and loss, the loss attributable to owners of parent amounted to ¥4,610 million compared with profit
attributable to owners of parent of ¥9,382 million in the previous fiscal year. This was due to thedecreased profitability of battery materials, which led to the inability to recover a portion of theinvestment, resulting in the recording of impairment losses as extraordinary losses.
ii. Overview by reporting segment
a. Fundamental Chemicals Division
For inorganic products, sales of caustic soda and hydrochloric acid were up year on year due to effects
from price revisions, despite lower sales volumes.
For organic products, a decline in trichloroethylene sales volume caused sales to decrease year on year.
Sales of perchloroethylene were down due to the lower sales volume and decrease in selling price.
As a result of the above, net sales in the Fundamental Chemicals Division amounted to ¥8,836 million,
down ¥572 million, or 6.1%, year on year. Operating loss stood at ¥139 million versus operating profitof ¥325 million in the previous fiscal year.
b. Fine Chemicals Division
Sales of fluorochemicals for semiconductors decreased year on year due to a decline in sales volume fornitrogen trifluoride, tungsten hexafluoride, and hexafluoro-1,3-butadiene.
Sales of lithium hexafluorophosphate, a battery material, were down due to a decrease in sales volume
and decrease in selling price.
As a result of the above, net sales in the Fine Chemicals Division amounted to ¥51,253 million, down
¥12,689 million or 19.8% year on year. An operating loss of ¥2,824 million was recorded, comparedwith operating profit of ¥11,450 million in the previous fiscal year. The loss was mainly due to thepersistent high cost of sales for battery materials and recognition of a loss on valuation of inventories, inaddition to the decline in net sales.

2c. Ferrochemicals Division
Sales of reprographic carriers, used in developers for copiers and printers, were down year on year due
to lower sales volumes. Sales of iron oxide were down due to lower sales of colorants.
As a result of the above, net sales in the Ferrochemicals Division amounted to ¥1,813 million, down
¥853 million or 32.0% year on year. Operating profit totaled ¥172 million, down ¥513 million or 74.9%
year on year.
d. Commercial Business Division
Commercial business sales were down due to lower sales of chemical products.
As a result of the above, net sales in the Commercial Business Division amounted to ¥698 million,
down ¥48 million or 6.4%. Operating profit totaled ¥190 million, down ¥8 million or 4.2% year on year.
e. Facilities Division
Net sales in chemical facility plant and general industrial plant construction were up year on year due toan increase in contract work.
As a result of the above, net sales in the Facilities Division amounted to ¥2,165 million, up ¥257
million or 13.5%. Operating profit amounted to ¥668 million, up ¥66 million or 11.0%.
(2) Financial position
Total assets at the end of the consolidated fiscal year under review amounted to ¥125,302 million, down
¥5,460 million from the end of the previous consolidated fiscal year.
Current assets amounted to ¥63,268 million, up ¥9,651 million from the end of the previous fiscal year.
The main factors were a ¥3,054 million increase in cash and deposits, which offset a ¥6,493 million
decrease in inventories and a ¥5,724 million decrease in notes and accounts receivable—trade, andcontract assets.
Non-current assets amounted to ¥62,034 million, up ¥4,191 million from the end of the previous fiscal
year. The main factors were a ¥1,824 million increase in investment securities and a ¥1,638 million
increase in property, plant and equipment.
Current liabilities amounted to ¥30,891 million, down ¥2,788 million from the end of the previous
fiscal year. The main factors were a ¥2,429 million decrease in income taxes payable and a ¥2,332 million
decrease in notes and accounts receivable—trade, which offset a ¥2,107 million increase in current
portion of long-term borrowings.
Non-current liabilities amounted to ¥28,832 million, up ¥524 million from the end of the previous
fiscal year. The main factor was a ¥1,280 million increase in long-term borrowings. The balance ofinterest-bearing debt was ¥41,682 million, up ¥3,888 million from the end of the previous fiscal year.
Total net assets amounted to ¥65,578 million, down ¥3,196 million from the end of the previous fiscal
year. The main factor was a ¥6,336 million decrease in retained earnings due to loss attributable to ownersof parent.
(3) Cash flows
Cash and cash equivalents at the end of the consolidated fiscal year under review amounted to ¥25,225
million, up ¥3,237 million from the end of the previous fiscal year.
a. Cash flows from operating activities
Net cash provided by operating activities amounted to ¥11,208 million (compared with net cash of ¥7,291
million provided in the previous fiscal year). This was mainly due to cash inflows such as ¥8,496 million
in depreciation, ¥6,700 million in decrease in inventories, and ¥5,690 million in decrease in tradereceivables, while recording cash outflows such as ¥5,317 million in loss before income taxes.
3

b. Cash flows from investing activities
Net cash used in investing activities amounted to ¥10,554 million (compared with net cash of ¥16,627
million used in the previous fiscal year). This was mainly due to the acquisition of property, plant andequipment.
c. Cash flows from financing activities
Net cash provided by financing activities amounted to ¥1,780 million (compared with net cash of ¥4,424
million provided in the previous fiscal year). This was mainly due to proceeds from long-term borrowingsof ¥10,170 million, while repayments of long-term borrowings amounted to ¥6,920 million.
(Cash flow indicators)
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended March ended March ended March ended March ended March
31, 2020
31, 2021
31, 2022
31, 2023
31, 2024
Equity ratio
54.8%
55.2%
53.0%
51.6%
51.1%
Equity ratio on a market
53.0%
55.7%
56.5%
45.3%
46.2%
value basis
Ratio of interest-bearing
2.4%
2.3%
2.8%
5.2%
3.7%
debt to cash flows
Interest coverage ratio
51.7%
61.1%
36.3%
22.6%
28.6%
(Notes) Equity ratio: Equity capital / Total assets
Equity ratio on a market value basis: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flows: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest payments
All calculations are based on consolidated financial figures.
Market capitalization is calculated based on the number of shares issued, minus treasury shares.
Operating cash flows are used for cash flows.
Interest-bearing debt is all debt on the consolidated balance sheet for which interest is paid.

(4) Future outlook
Looking ahead, the economy is expected to continue rebounding moderately on the back of various
governmental policies under an improving employment and income environment. Nonetheless, attention
must be paid to the risk of downward pressure on the Japanese economy caused by the slowdown in the
global economy, the risk of soaring raw material and energy prices squeezing corporate earnings,
worldwide geopolitical risks, and the risk of fluctuations in financial and capital markets. As such, thefuture remains highly uncertain, and the business environment is expected to remain a challenging one.
Against this backdrop, the Group launched its new medium-term management plan, “Dominate 1000,”in the fiscal year ended March 31, 2023 with the goal of achieving ¥100 billion in consolidated net sales
in the fiscal year ending March 31, 2025. However, taking into account the evolving business landscapeand performance trends, we have reevaluated the plan and extended it by two years. We will implement
new strategies and measures in addition to the initially planned key strategies to enhance corporate value.
Specifically, we will expand business, predominantly in the Fine Chemicals Division, reform our businessportfolio, pursue management leveraging return on invested capital (ROIC), strengthen investor relations(IR) activities, and reduce cross-shareholdings. These and other efforts seek to revitalize profitability
while also prioritizing management mindful of capital costs.
As we look ahead to the society we envision in 2030, we are committed to providing a safe work
environment that fosters job satisfaction and supporting technologies that are cutting-edge on a global
stage with our superior, original products. By building on a stable management foundation, we aim togrow into an innovative, development-driven company that contributes to a sustainable society.
In terms of consolidated earnings forecast for the fiscal year ending March 31, 2025, we project net
sales of ¥69,000 million, marking a year-on-year increase, primarily due to expected growth in sales
4

volume of fluorochemicals for semiconductors. We also forecast operating profit of ¥4,900 million andordinary profit of ¥4,800 million, mainly due to the expected sales gains coupled with a reduction in sales
expenses for battery materials.
(5) Basic policy on profit distribution and dividends for the current and next fiscal years
In determining dividends from surplus, the Company’s basic policy is to appropriately returning

profits while securing funds for capital investment, an indispensable driver of greater earnings, andto strengthen its financial position. These actions are founded in its business plans over the medium tolong term and take into consideration trends in business performance.
In addition, although we set a target dividend payout ratio of 20% in our medium-term management
plan, “Dominate 1000,” introduced in April 2022, we have increased this to 30% following a review ofthe plan in November 2023.
For the fiscal year ended March 31, 2024, the Company plans to pay a year-end dividend of ¥7 pershare, to be decided at the Board of Directors’ meeting on May 28, 2024, based on comprehensive
consideration of performance for the year and the business environment, among other factors. This makes
the annual dividend per share ¥14, including the interim dividend of ¥7 already paid.
For the fiscal year ending March 31, 2025, the Company plans to pay an annual dividend of ¥16 pershare (interim: ¥8, year-end: ¥8), taking into consideration the above policy, trends in businessperformance and other factors.

2. Basic approach to the selection of accounting standards

The Group has adopted Japanese generally accepted accounting principles due to the lack of need to raise
funds from overseas, and has no immediate plans to change this policy.

5

3. Consolidated financial statements and notes(1) Consolidated balance sheet(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Assets:Current assets
Cash and deposits

22,35525,409Notes and accounts receivable—trade, and contract
assetsElectronically recorded monetary claims—
operatingMerchandise and finished goods

20,56014,835

1,130

1,292

7,055

6,943

Work in process
Raw materials and supplies

9,332
7,516

6,475
3,993

Other
Allowance for doubtful accounts

5,030
(62)

4,359
(41)

Total current assets

72,91963,268

10,93019,291

12,71919,767

Land
Lease assets, net

2,657
266

2,677
256

Construction in progress
Other, net

10,512
3,745

10,012
3,609

Total property, plant and equipment

47,40449,042Intangible assets
Other
Total intangible assets

676
676

752
752

Investments and other assets
Investment securities
Retirement benefit assets
Deferred tax assets
Other

7,399
14
1,404
950

9,224
11
2,093
916

(7)

(7)

Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery and equipment, net

Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6

9,762

12,23857,842

62,034

130,762

125,302

(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Liabilities:
Current liabilities
Notes and accounts payable—trade

9,620

7,287

Electronically recorded obligations—operating
Short-term borrowings

1,022
4,516

1,021
5,028

Current portion of long-term borrowings
Lease obligations

6,914
135

9,022
160

Income taxes payable
Provision for bonuses for directors (and otherofficers)
Other

2,701
134

272
60

8,634

8,038

Total current liabilities

33,68030,891

25,591
635

26,872
598

36
143

10
151

18

33

1,805
75

1,084
81

28,30828,832

61,98859,724

CapitalCapital surplus

2,877
1,859

2,877
1,859

Retained earnings
Treasury shares

58,486(65)

52,149(66)

Total shareholders’ equity

Non-current liabilities
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (andother officers)
Provision for share awards for directors (and otherofficers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets:
Shareholders’ equity

63,15756,821

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

2,512
1,534
275

3,939
2,402
843

Total accumulated other comprehensive income

4,323

7,185

Non-controlling interests

1,293

1,572

Total net assets
Total liabilities and net assets

68,77465,578130,762

125,3027

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Millions of yen)
From April 1, 2022
to March 31, 2023

From April 1, 2023
to March 31, 2024

Net sales
Cost of sales
Gross profit

78,675
56,10764,76857,602

22,567

7,166

Selling, general and administrative expenses
Operating profit (loss)

9,619
12,9479,135(1,968)

20

58

248
112

255
831

515
268

—
373

1,164

1,519

318

473

Loss on sale of trial products
Miscellaneous loss

59
—
53

173
146
61

Total non-operating expenses
Ordinary profit (loss)

432
13,679855(1,304)Extraordinary income
Gain on sale of investment securities
Total extraordinary income

—
—

586
586

Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
Loss on valuation of investment securities

242
—
11

336
4,262
—

Total extraordinary losses

254

4,598

Profit (loss) before income taxes

13,425(5,317)

Income taxes—current
Income taxes—deferred

4,166
(244)

415
(1,335)

Total income taxes
Profit (loss)

3,921
9,503

(919)
(4,397)

Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

121
9,382

212
(4,610)Non-operating profit
Interest income
Dividend income
Foreign exchange gains
Gain on sale of trial products
Miscellaneous income
Total non-operating profit
Non-operating expenses
Interest expenses
Loss on valuation of derivatives

8

Consolidated Statement of Comprehensive Income(Millions of yen)
From April 1, 2022
to March 31, 2023
Profit (loss)

From April 1, 2023
to March 31, 2024
9,503

(4,397)

Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income

(45)

1,514

1,162
84

872
567

1,200
10,704

2,954(1,443)

10,574130(1,748)305

Comprehensive income attributable to:
Owners of parent
Non-controlling interests9(3) Consolidated Statement of Changes in Equity
From April 1, 2022 to March 31, 2023
(Millions of yen)
Shareholders’ equity
CapitalBalance at beginning of period

2,877

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,829

50,483(68)

55,122

Changes during period
Dividends of surplus(1,380)(1,380)

Profit (loss) attributable toowners of parent

9,382

9,382

Purchase of treasury shares

(0)

(0)

Disposal of treasury shares

22

Increase (decrease) in capitalsurplus due to changes inownership interests inconsolidated subsidiaries
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

30

30

—

30

8,002

2

8,035

2,877

1,859

58,486(65)

63,157

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets

2,527

413

191

3,132

1,654

59,908Changes during period
Dividends of surplus(1,380)

Profit (loss) attributable toowners of parent

9,382

Purchase of treasury shares(0)

Disposal of treasury shares

2

Increase (decrease) in capitalsurplus due to changes inownership interests inconsolidated subsidiaries
Net changes in items otherthan shareholders’ equity

30
(14)

1,121

84

1,191

(360)

830

Total changes during period

(14)

1,121

84

1,191

(360)

8,865

Balance at end of period

2,512

1,534

275

4,323

1,293

68,77410

From April 1, 2023 to March 31, 2024
(Millions of yen)
Shareholders’ equity
CapitalBalance at beginning of period

2,877

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,859

58,486(65)

63,157

Changes during period
Dividends of surplus(1,725)(1,725)

Profit (loss) attributable toowners of parent(4,610)(4,610)Purchase of treasury shares(0)

Disposal of treasury shares—

Increase (decrease) in capitalsurplus due to changes inownership interests inconsolidated subsidiaries
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

(0)

—

—

—

(6,336)(0)(6,336)

2,877

1,859

52,149(66)

56,821

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets

2,512

1,534

275

4,323

1,293

68,774

Changes during period
Dividends of surplus(1,725)

Profit (loss) attributable toowners of parent(4,610)Purchase of treasury shares(0)

Disposal of treasury shares—

Increase (decrease) in capitalsurplus due to changes inownership interests inconsolidated subsidiaries
Net changes in items otherthan shareholders’ equity

—
1,427

867

567

2,861

278

3,140

Total changes during period

1,427

867

567

2,861

278

(3,196)

Balance at end of period

3,939

2,402

843

7,185

1,572

65,57811

(4) Consolidated Statement of Cash Flows(Millions of yen)
From April 1, 2022
to March 31, 2023
Net cash provided by operating activities
Profit (loss) before income taxes

From April 1, 2023
to March 31, 2024

13,425(5,317)

Depreciation
Impairment losses

7,697
—

8,496
4,262

Interest and dividend income
Interest expenses

(268)
318

(313)
473

Foreign exchange losses (gains)
Loss on retirement of non-current assets

58
242

(673)
336

Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities

0
11

(586)
—

Decrease (increase) in trade receivables
Decrease (increase) in inventories(3,479)(10,555)

5,690
6,700

Increase (decrease) in trade payables
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other

1,533
(1,091)
2,912
635(2,571)745(3,071)(143)

Subtotal

11,441

14,027

Interest and dividends received
Interest paid
Income taxes paid

278
(322)
(4,106)280(391)(2,707)

Net cash provided by operating activities

7,291

11,208Purchase of property, plant and equipment
Proceeds from sale of investment securities
Purchase of investment securities
Other(15,799)
10
(20)
(817)

(10,966)
691
(22)
(257)

Net cash used in investing activities(16,627)(10,554)

Net cash used in investing activities

Net cash provided by financing activities
Net increase (decrease) in short-term borrowings

316

512

12,080(5,911)

10,170(6,920)

Dividends paid
Dividends paid to non-controlling interests
Purchase of treasury shares
Purchase of shares of subsidiaries not resulting inchanges in scope of consolidation
Other
Net cash provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents(1,380)(22)(0)(1,725)
(26)
(0)

(438)

—

(218)
4,424

(228)
1,780

526

802

(4,385)

3,237

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

26,372
21,98721,98725,225

Proceeds from long-term borrowings
Repayments of long-term borrowings12(5) Notes to the consolidated financial statements(Notes on premise of going concern)
Not applicable.
(Significant matters forming the basis for preparation of the consolidated financial statements)
1. Matters concerning scope of consolidation(1) Number of consolidated subsidiaries: 7 companies
Name of consolidated subsidiaries
Kanden Kosan Co., Ltd.
Jobi Engineering Co., Ltd.
Kanto Denka Finetech Co., Ltd.
Kanto Denka Korea Co., Ltd.
Taiwan Kanto Denka Co., Ltd.
Kanto Denka Fine Products Korea Co., Ltd.
Xuancheng KDK Technology Co., Ltd.
(2) Name of non-consolidated subsidiaries
Kanto Denka Sangyo Co., Ltd.
Gunma Tekkojo Co., Ltd.
Kanden Mizushima Sangyo Co., Ltd.
Kanden Shibukawa Sangyo Co., Ltd.
Kanto Denka Kogyo (Shanghai) Co., Ltd.
Reason for exclusion from scope of consolidation
All non-consolidated subsidiaries are small companies, with none of total assets, net sales, net profit (commensurate with equity
holdings), or retained earnings (commensurate with equity holdings) exerting any important influence on consolidated financial
statements.
2. Matters concerning the application of the equity method
There are no non-consolidated subsidiaries for which the equity method is applied. There are also no affiliated companies.
Non-consolidated subsidiaries for which the equity method is not applied
Kanto Denka Sangyo Co., Ltd.
Gunma Tekkojo Co., Ltd.
Kanden Mizushima Sangyo Co., Ltd.
Kanden Shibukawa Sangyo Co., Ltd.
Kanto Denka Kogyo (Shanghai) Co., Ltd.
Reason for non-application of the equity method
Non-consolidated subsidiaries for which the equity method is not applied do not have a material impact on net profit orretained earnings and are not significant as a whole, and therefore the equity method is not applied.
3. Matters concerning the fiscal year of consolidated subsidiaries
The fiscal year end of Kanto Denka Korea Co. Ltd., Taiwan Kanto Denka Co., Ltd., Kanto Denka Fine Products Korea Co., Ltd.,and Xuancheng KDK Technology Co., Ltd. is December 31. In preparing consolidated financial statements, financial statements
as of this day are used, making necessary adjustments for important transactions occurring between this day and the consolidated
closing date.

13

4. Matters concerning accounting policies(1) Valuation standards and valuation methods for significant assets
i. Securities
Available-for-sale securities
Securities other than stocks, etc. with no market priceStated at market value.
(All valuation differences are processed by the direct net assets method, and selling cost is calculated by the moving
average method.)
Stocks, etc. with no market priceStated at cost determined by the moving average method.
ii. Inventories
Merchandise and finished goods, work in process, and raw materials and supplies
Mainly stated at cost determined by the monthly moving average method (the balance sheet amount is calculated by themethod of writing down book value based on decline in profitability).
(2) Method of depreciation and amortization of significant depreciable assets
i. Property, plant and equipment (excluding lease assets)
While the Company and its domestic consolidated subsidiaries mainly use the straight-line method, the declining-balancemethod is used for “Machinery” within the Fine Chemicals Division. Overseas consolidated subsidiaries mainly use thestraight-line method.
ii. Intangible assets (excluding lease assets)
The straight-line method is used.
Software for internal use is amortized over the estimated internal useful life (five years).
iii. Lease assets
Lease assets related to finance lease transactions with transfer of ownership
The same depreciation method is used as that applied to internally held non-current assets.
Lease assets related to finance lease transactions without transfer of ownership
The straight-line method is used, with useful life set as the leasing term and the remaining value set at zero.
(3) Standards for recognition of significant allowances and provisions
i. Allowance for doubtful accounts
To provide for bad debt expenses on receivables such as trade receivable and loans receivable, an allowance for doubtful
accounts is provided based on the historical write-off rate for ordinary receivables, and the estimated amount of
irrecoverable debt is booked based on the recoverability of individual cases for specified receivables such as debt with apossibility of default.
ii. Provision for bonuses for directors (and other officers)
To provide for the payment of bonuses to officers, an amount is recorded based on the estimated amount to be paid in thefiscal year under review.
iii. Provision for retirement benefits for directors (and other officers)
To provide for the payment of retirement benefits to directors and other officers of consolidated subsidiaries, a standard
amount is recorded based on internal regulations.
iv. Provision for share awards for directors (and other officers)
To provide for the award of the Company shares to directors (excluding outside directors) in accordance with the rules onshare issuance, an amount is recorded based on the estimated share award as of the end of the consolidated fiscal year underreview.
(4) Accounting treatment for defined benefits
i. Method for period attribution of expected defined benefit amount
When calculating defined benefit obligations, the method of attributing expected defined benefit amounts to the period up
to the end of the current consolidated fiscal year shall be based on the benefit formula.
ii. Method for amortization of actuarial variances and expenses for past service
Actuarial variances are amortized by the straight-line method over a fixed number of years (15 years） within the averageremaining service period of employees at the time of occurrence of each consolidated fiscal year, starting from theconsolidated fiscal year following each occurrence.
Expenses for past service are amortized by the straight-line method over a fixed number of years (15 years) within the
average remaining service period of employees at the time of occurrence.

14

(5) Standards for recognition of significant revenue and expenses
i. Sales of finished goods and merchandise
In the fundamental chemicals, fine chemicals, and ferrochemicals businesses, the Company manufactures and sells finishedgoods, and its primary performance obligation is to deliver these finished goods to the customer. For domestic transactions,control of finished products is deemed to be transferred to the customer upon delivery. However, revenue is recognized at
the time of shipment, in principle, since the period between shipment and delivery is typically within a normal timeframe andan alternative treatment for materiality, etc. is applied. For export sales, performance obligations are deemed satisfied whenrisk is transferred to the customer based on trade terms set forth in Incoterms and other trade rules. Revenue is recognizedwhen these performance obligations are satisfied.
In the commercial business, the Company mainly sells merchandise. Its primary performance obligation is to deliver thismerchandise to the customer and this obligation is deemed to be satisfied upon delivery pursuant to the contract with thecustomer. Revenue is recognized when this obligation is satisfied. For sales of merchandise for which the Group is deemed
to be an agent, revenue is recognized at the net amount received from the customer less the amount paid to the supplier.
ii. Work contracts, etc.
For work contracts, etc. in the facilities business, the Company undertakes construction pursuant to the contract with thecustomer and has an obligation to deliver completed facilities, etc. to the customer. Revenue is recognized over a specified
period of time as control of the goods or services is transferred to the customer over the contract period. Costs incurred are
deemed to be proportional to the degree of progress toward satisfying the performance obligation, and the ratio of actual costs
to total estimated costs is used to determine the degree of progress (input method).
When the degree of progress toward satisfying the performance obligation in question cannot be reasonably estimated, but it
is probable that the costs incurred in satisfying the obligation will be recovered, revenue is recognized on a cost recovery
basis for performance obligations that will be satisfied over a specified period of time.
(6) Standards for translating significant foreign currency denominated assets or liabilities into Japanese currency
The assets and liabilities of overseas subsidiaries are converted to yen at the spot exchange rate on the day of the overseas
subsidiaries’ fiscal year end, while related revenues and expenses are converted to yen at the average rate during the period.
These translation differences are posted as foreign currency translation adjustments and non-controlling interests under net
assets.
(7) Scope of funds in the consolidated statement of cash flows
The funds (cash and cash equivalents) in the consolidated statement of cash flows consist of cash on hand, deposits that can bewithdrawn at any time, and short-term investments with a maturity of three months or less from the date of acquisition, which
are readily convertible to cash and bear only an insignificant risk of price fluctuation.
(Segment information, etc.)[Segment information]
1. Overview of reportable segments
The Company’s reportable segments are those for which separate financial information is available and are subject to periodic review
by the Board of Directors to determine the allocation of management resources and evaluate their performance.
The Company’s reportable segments are the Fundamental Chemicals Division, Fine Chemicals Division, Ferrochemicals Division,
Commercial Business Division, and Facilities Division.
In the Fundamental Chemicals Division, the Company manufactures and sells fundamental chemicals such as inorganic andorganic chemicals. In the Fine Chemicals Division, the Company manufactures and sells fine chemicals including fluorinated gases
and battery materials. In the Ferrochemicals Division, the Company manufactures and sells ferrochemical products. In theCommercial Business Division, the Company sells fundamental chemicals and fine chemicals, and provides maintenance forcontainers and other services. In the Facilities Division, the Company engages in facility-related construction work.
2. Calculation method of net sales, profit or loss, assets, liabilities, and other items by reportable segment
Accounting treatment methods for reported business segments are the same as those described in “Significant matters forming thebasis for preparation of the consolidated financial statements.”
Profit or loss by reportable segment is based on operating profit or operating loss.
Inter-segment revenues and transfers are based on prevailing market prices.

15

3. Information on net sales, profit or loss, assets, liabilities, and other items by reportable segment
I. From April 1, 2022 to March 31, 2023
(Millions of yen)
Adjustment(Note 1)

Amount on
consolidated
financialstatements(Note 2)

Reportable segment
Fundamental
Chemicals

Fine
Commercial
Ferrochemicals
Chemicals
Business

Facilities

Total

Net sales
Net sales to externalcustomers

9,409

63,943

2,666

746

1,908

78,675—78,675Inter-segment net
sales or transfers

—

—

0

1,444

3,831

5,275

(5,275)—

9,409

63,943

2,667

2,190

5,740

83,950(5,275)78,675325

11,450

685

199

602

13,262(315)

12,947

11,247

116,846

3,744

3,731

7,006

142,576(11,814)130,762

863

6,931

90

40

31

7,957

(259)

7,697

1,515

15,429

180

16

34

17,176(552)

16,624

Total
Segment profit (loss)
Segment assets
Other items
Depreciation
Increase in property,
plant and equipment andintangible assets(Notes) 1. The segment profit adjustment of –¥315 million is elimination of inter-segment transactions.
The segment assets adjustment of –¥11,814 million includes inter-segment eliminations of –¥14,540 million andcorporate assets of ¥2,726 million that are not allocated to any reportable segment.
The adjustment of –¥259 million for depreciation under other items is inter-segment elimination.
The adjustment of –¥552 million for increase in property, plant and equipment and intangible assets under other items isinter-segment elimination.
2. Segment profit (loss) is adjusted with operating profit (loss) in the consolidated statement of income.

16

II. From April 1, 2023 to March 31, 2024

(Millions of yen)
Reportable segment

Fundamental
Chemicals

Fine
Commercial
Ferrochemicals
Chemicals
Business

Facilities

Total

Adjustment(Note 1)

Amount on
consolidated
financialstatements(Note 2)

Net sales
Net sales to externalcustomers

8,836

51,253

1,813

698

2,165

64,768—64,768Inter-segment net
sales or transfers

—

—

0

1,379

3,967

5,347

(5,347)—

8,836

51,253

1,814

2,078

6,133

70,116(5,347)64,768Segment profit (loss)(139)(2,824)

172

190

668

(1,932)(35)(1,968)Segment assets

12,354

108,506

4,013

3,358

7,361

135,594(10,292)

125,302

Depreciation

974

7,654

99

38

38

8,805

(309)

8,496

Increase in property,
plant and equipment andintangible assets

765

13,208

128

61

62

14,226(351)

13,875

Total

Other items(Notes) 1. The segment loss adjustment of –¥35 million is elimination of inter-segment transactions.
The segment assets adjustment of –¥10,292 million includes inter-segment eliminations of –¥14,935 million andcorporate assets of ¥4,643 million that are not allocated to any reportable segment.
The adjustment of –¥309 million for depreciation under other items is inter-segment elimination.
The adjustment of –¥351 million for increase in property, plant and equipment and intangible assets under other items isinter-segment elimination.
2. Segment profit is adjusted with operating profit (loss) in the consolidated statement of income.

17

[Related information]
From April 1, 2022 to March 31, 2023
1. Information by product and service
This information is omitted because the same information is disclosed in “Segment information.”
2. Information by region(1) Net sales
Japan(Millions of yen)
Europe and North
AmericaAsia
35,261

32,828

Total

10,58478,675(Notes) 1. Net sales are based on customer location and are classified by country or region.
2. Net sales to the Asia region include net sales of ¥15,252 million in South Korea and net sales of ¥9,435 million in China,
which account for more than 10% of the net sales on the consolidated statement of income.
(2) Property, plant and equipment
Japan(Millions of yen)Asia
29,834

Total
17,56947,404(Note) Property, plant and equipment in the Asia region includes property, plant and equipment of ¥9,863 million in South Korea,and ¥7,300 million in China, which each account for more than 10% of the property, plant and equipment on the
consolidated balance sheet.
3. Information by major customer(Millions of yen)

Name of customer

Net sales

Related segment

14,072Fine Chemicals
Fundamental Chemicals

Samsung Electronics Co., Ltd.

14,035Fine Chemicals

KIOXIA Corporation

7,888

Fine Chemicals

Mitsubishi Chemical Corporation

From April 1, 2023 to March 31, 2024
1. Information by product and service
This information is omitted because the same information is disclosed in “Segment information.”
2. Information by region(1) Net sales
Japan(Millions of yen)
Europe and North
AmericaAsia
29,57427,817

7,376

Total
64,768(Notes) 1. Net sales are based on customer location and are classified by country or region.
2. Net sales to the Asia region include ¥15,390 million in South Korea, which accounts for more than 10% of the net
sales on the consolidated statement of income.
(2) Property, plant and equipment
Japan(Millions of yen)Asia
30,160Total
18,882

49,042(Note) Property, plant and equipment in the Asia region includes property, plant and equipment of ¥10,274 million in South Korea,and ¥8,211 million in China, which each account for more than 10% of the property, plant and equipment on the
consolidated balance sheet.
18

3. Information by major customer
Name of customer(Millions of yen)
Net sales

Related segment

Samsung Electronics Co., Ltd.

13,354

Fine Chemicals

KIOXIA Corporation

6,494

Fine Chemicals[Information about impairment loss of non-current assets by reportable segment]
From April 1, 2022 to March 31, 2023
Not applicable.
From April 1, 2023 to March 31, 2024
Impairment loss of non-current assets was recorded in the Fine Chemicals Division in the amount of ¥4,262 million.
[Information about amortization and unamortized balance of goodwill by reportable segment]
From April 1, 2022 to March 31, 2023
Not applicable.
From April 1, 2023 to March 31, 2024
Not applicable.
[Information about gain on bargain purchase by reportable segment]
From April 1, 2022 to March 31, 2023
Not applicable.
From April 1, 2023 to March 31, 2024
Not applicable.

(Per share information)(Yen)
From April 1, 2022
to March 31, 2023
Net assets per share
Basic earnings (loss) per share

From April 1, 2023
to March 31, 2024

1,174.54

1,114.07

163.32(80.25)(Notes) 1. Diluted basic earnings per share is not shown in the above table, as there are no dilutive shares.
2. Calculation of net assets per share includes the Company’s shares held in its stock benefit trust in the treasury sharesdeducted from the total number of shares issued at the end of the period. Also, calculation of basic earnings per
share includes treasury shares deducted from the average number of shares during the period.
3. The basis for calculation of basic earnings per share is as follows:
From April 1, 2022
to March 31, 2023
Profit (loss) attributable to owners of parent(Millions of yen)Amount not attributable to common shareholders(Millions of yen)

From April 1, 2023
to March 31, 2024

9,382

(4,610)——

Profit (loss) attributable to owners of parent relating tocommon shares (Millions of yen)

9,382

(4,610)

Average number of common shares during the period(Shares)

57,451,484

57,452,894(Significant subsequent events)
Not applicable.
19