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.

April 25, 2024
News Release
Company name: Kanto Denka Kogyo Co., Ltd.
Representative: Jun’ichi Hasegawa, President(Securities code: 4047, TSE Prime Market)
Contact: Masanobu Shirokura, General Manager,
Public Relations & Investor Relations Dept.
(Phone: +81-3-4236-8804)

Notice of Impairment Loss and Revision of Financial Forecast
Kanto Denka Kogyo Co., Ltd. (hereafter, the “Company”) announces that it expects to record an impairment loss on
non-current assets for the fourth quarter of the fiscal year ending March 31, 2024. In conjunction with this, theCompany has revised its financial forecast announced on October 25, 2023, as follows.
1．Details of Impairment Loss
In our battery materials business, mainly manufactures and sells high-purity electrolytes for lithium-ion secondary
batteries, the cost of sales remained at a high level due to an inventory balance affected by the surge in the price oflithium, a raw material, and we recorded a loss on valuation of inventories to reflect the deterioration in selling prices.
In this situation, the Company recognized that significant changes have occurred in the marketplace during the periodthat have an adverse effect on the entity, which is an indication of impairment. After examining the possibility ofrecovery, because profitability is expected to decline due to lower sales volume in the future, the Company expects
that the book value will be reduced to the recoverable amount and an impairment loss of approximately 4.2 billion yen
will be recorded, although the Company had been proceeding with an 8,000-ton/year facility expansion in anticipationof growth in the electric vehicle market.
2．Revision of Financial Forecasts
Revision of consolidated financial forecast for the fiscal year ending March 31, 2024 (April 1, 2023-March 31, 2024)
Net sales

OperatingprofitOrdinary
profitProfitattributable toowners ofparent

Basicearnings
per sharePrevious forecast(A)

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Yen

63,800△2,000△1,600△1,600△27.85

Revised forecast(B)

64,770△1,970△1,170△4,480△77.98(B-A)

97030430△2,880(%)

1.5－－－

78,675

12,947

13,6799,382

ChangeRate of change(ref.) Results for the fiscal
year ended March 31, 2023

163.32

3．Reason for Revision
Net sales are expected to exceed the previously announced figure due to an increase in sales volume of specialty gases
for semiconductors.
Operating profit is expected to be equivalent to the previously announced figures due to an increase in loss on
valuation of inventories because of lower unit sales prices of battery materials, although net sales are expected toincrease.
Ordinary profit is expected to exceed the previously announced figure due to an increase in foreign exchange gains.
Profit attributable to owners of parent is expected to be lower than the previously announced figure, as impairment
loss is expected to be recorded as an extraordinary loss, as described in 1 above, although a decrease in income
taxes—deferred is expected due to a partial impairment loss and an increase in loss on valuation of inventories.
4．Future Direction of Battery Materials
Regarding the future outlook for battery materials, we have received inquiries due to the critical minerals requirement
related to the U.S. Inflation Reduction Act, and expect that it will contribute to sales from the second quarter of thefiscal year ending March 31, 2025. In addition to expanding the licensing business, we will work to improve theutilization of inexpensive raw materials and inventory turnover rate in order to build a business structure that is notaffected by raw material market conditions. Furthermore, we will promote the commercialization of lithium recovery.
The Company expects to return to profitability for battery materials in the fiscal year ending March 31, 2025.
5．Other
Considering business performance trends for the fiscal year ending March 31, 2024, the Company will reduce themonthly compensation of the President and other directors who execute the Company's business by up to 20% and byat least 10%. (From April 2024 to June 2024)
Despite the revision of the financial forecast, there is no revision to the year-end dividend forecast (7 yen) for thefiscal year ending March 31, 2024.
Notes: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 apromise by the Company that they will be realized. Actual results may differ significantly due to various factors.