Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [JGAAP]
Company Name:

May 13, 2022
Stock Exchange Listing: Tokyo

Kanto Denka Kogyo Co., Ltd.

Code Number: 4047 https://www.kantodenka.co.jp/english/
Representative: Jun’ichi Hasegawa, President
Contact: Ryoji Masujima,Phone: +81-3-4236-8801
Executive Officer; General Manager, Legal & General Affairs Dept.
Scheduled date of Ordinary General Shareholders’ Meeting:
Scheduled date to commence dividend payments:
June 29, 2022
June 30, 2022
Scheduled date for submitting the Annual Securities Report:
June 29, 2022
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, 2022 (April 1, 2021–March 31, 2022)(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

Operating profit

Millions of yen%

62,28651,927

19.9–3.3

Fiscal year ended March 31, 2022
Fiscal year ended March 31, 2021

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen

11,164 97.0
5,668 –26.7%

Millions of yen

11,145 99.6
5,582 –28.8%

7,762 115.3
3,605 –28.2(Note) Comprehensive income:Fiscal year ended March 31, 2022: ¥8,374 million (39.5%)
Fiscal year ended March 31, 2021: ¥6,005 million (52.3%)
Diluted basic
Basic earnings per
shareearnings per share

Ordinary profit to Operating profit tototal assets ratio
net sales ratio

Return on equity

Yen

Yen

%

%

%

135.12
62.73(Reference) Equity gains (losses) of affiliated companies:
Fiscal year ended March 31, 2022: ¥― million
Fiscal year ended March 31, 2021: ¥― million

—
—

14.2
7.4

11.0
6.3

17.9
10.9

Fiscal year ended March 31, 2022
Fiscal year ended March 31, 2021

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Net assets per share

Millions of yen

Yen%

As of March 31, 2022
As of March 31, 2021

109,90259,90853.0
92,32452,423
55.2(Reference) Equity capital: Fiscal year ended March 31, 2022: ¥58,254 million; Fiscal year ended March 31, 2021: ¥50,980 million

1,014.01
887.42(3) Consolidated cash flows
Cash flows from operating Cash flows from investing
activities
activities

Fiscal year ended March 31, 2022
Fiscal year ended March 31, 2021

Cash flows from financing Cash and cash equivalents
activities
at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

11,176
11,984(11,120)(9,872)

2,416
4,350

26,372
23,3392. Dividends
Annual dividends per share
End of 1Q End of 2Q End of 3Q Year-end

Total

Total dividend
amountRatio of
Dividend
dividends to net
payout ratio
assets(Consolidated) (Consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen%%

Fiscal year ended March 31, 2021
Fiscal year ended March 31, 2022

—
—

7.00
8.00

—
—

7.00
14.00

14.00
22.00

805
1,265

22.3
16.3

1.7
2.3

Fiscal year ending March 31, 2023
(Forecast)

—

10.00

—

12.00

22.00

17.8

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023 (April 1, 2022–March 31, 2023)(% figures are the rate of year-on-year increase or decrease)

Net salesFirst half
Full year

Operating profit

Profit attributable toowners of parent

Ordinary profit

Basic earnings
per share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

36,20076,000

28.4
22.0

5,300
10,900

20.0
–2.4

5,200
10,800

18.6
–3.1

3,400
7,100

12.1
–8.5

59.18
123.59

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.: Yes
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

As of March 31, 2022
As of March 31, 2022
As of March 31, 2022

57,546,050 shares As of March 31, 2021 57,546,050 shares
96,900 shares As of March 31, 2021

98,474 shares

57,448,551 shares As of March 31, 2021 57,477,105 shares(Reference) Summary of non-consolidated financial results
Non-consolidated financial results for the fiscal year ended March 31, 2022 (April 1, 2021–March 31, 2022)(1) Non-consolidated operating results(% figures are the rate of year -on-year increase or decrease)
Net sales
Operating profit
Ordinary profit
ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

55,75047,071

18.4
–1.5

9,020
4,470

101.8
–38.0

9,400
4,505

108.7
–39.1

6,652
2,895

129.7
–42.2

Fiscal year ended March 31, 2022
Fiscal year ended March 31, 2021

Basic earnings per share

Diluted basic earnings per share
Yen

Fiscal year ended March 31, 2022
Fiscal year ended March 31, 2021

Yen

—
—

115.81
50.38(2) Non-consolidated financial position
Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen%

Yen

93,41051,21980,03145,725(Reference) Equity capital: Fiscal year ended March 31, 2022: ¥51,219 million
Fiscal year ended March 31, 2021: ¥45,725 million

54.8
57.1

891.57795.95

Millions of yen

As of March 31, 2022
As of March 31, 2021

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 tovarious 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 Monday, May 23, 2022. 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 ....................4
2. Basic approach to the selection of accounting standards ........................................................................... 4
3. Consolidated financial statements and notes .............................................................................................. 5(1) Consolidated balance sheet ............................................................................................................... 5(2) Consolidated statement of income and consolidated statement of comprehensive income ..............7
Consolidated statement of income ...................................................................................................... 7
Consolidated statement of comprehensive income ............................................................................. 8(3) Consolidated statement of changes in equity ....................................................................................9(4) Consolidated statement of cash flows ............................................................................................. 11(5) Notes to the consolidated financial statements ................................................................................12(Notes on premise of going concern) ................................................................................................ 12(Significant matters forming the basis for preparation of the consolidated financial statements) .... 12(Changes in accounting policies) ...................................................................................................... 14(Segment information, etc.) .............................................................................................................. 14(Per share information) ..................................................................................................................... 18(Significant subsequent events) ........................................................................................................ 18

1

1. Overview of operating results, etc.
(1) Operating results
i. Operating results for the fiscal year under review
In the consolidated fiscal year ended March 31, 2022, while the Japanese economy showed signs ofrecovery due to effects of various government policies, severe conditions continued to prevail. Overseas,
outlooks remained uncertain due to the impact on economic activities from the resurgence of COVID-19
infections, as well as the need for caution amid such factors as heightened geopolitical risks andfluctuations in financial and capital markets.
The chemical industry also continued to face a challenging business environment, with rising raw
material and fuel prices and disruptions in distribution networks, despite movements toward recovery
in demand.
Amid these circumstances, the Kanto Denka Group worked to strengthen the earning power of its
fundamental chemicals, fine chemicals, and ferrochemicals businesses, while striving to develop new
products that leverage its competitive fluorochemical technologies.
Net sales for the fiscal year under review amounted to ¥62,286 million, up ¥10,359 million or 19.9%
year on year, mainly due to higher sales in the Fine Chemicals Division. For profit and loss, ordinary
profit amounted to ¥11,145 million, up ¥5,562 million or 99.6% year on year, and profit attributable toowners of parent amounted to ¥7,762 million, up ¥4,157 million or 115.3% year on year.
Note that the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020) and other provisions were applied from the beginning of the consolidated fiscal year underreview.
As a result, net sales decreased by ¥242 million, cost of sales decreased by ¥203 million, andoperating profit, ordinary profit, and profit before income taxes each decreased by ¥38 million,
compared with the previous accounting method.
For details, please refer to “3. Consolidated financial statements and notes, (5) Notes to theconsolidated financial statements (Changes in accounting policies).”ii. Overview by reporting segment
a. Fundamental Chemicals Division
Sales of caustic soda and hydrochloric acid were up year on year due to higher sales volumes, despite
lower sales prices.
For organic products, sales of trichloroethylene were up due to effects from price revisions. Sales ofperchloroethylene were up due to effects from price revisions, despite lower sales volumes.
As a result of the above, net sales in the Fundamental Chemicals Division amounted to ¥7,966
million, up ¥2,190 million or 37.9%. Operating loss amounted to ¥69 million (versus operating loss of¥240 million in the previous fiscal year).
b. Fine Chemicals Division
For fluorochemicals for semiconductors and liquid crystals, sales of nitrogen trifluoride were up year on
year due to effects from price revisions, despite lower sales volumes. Sales of tungsten hexafluoride were
down due to lower sales prices, despite higher sales volumes. Sales of hexafluoro-1,3-butadiene were up
due to higher sales volumes, despite lower sales prices.
Sales of lithium hexafluorophosphate, a battery material, were up due to higher sales volumes andeffects from price revisions.
As a result of the above, net sales in the Fine Chemicals Division amounted to ¥49,000 million, up¥8,666 million or 21.5%. Operating profit amounted to ¥10,042 million, up ¥4,671 million or 87.0%.
c. Ferrochemicals Division
Sales of reprographic carriers, used in developers for copiers and printers, were up year on year due tohigher sales volumes. Sales of iron oxide were up due to higher sales of colorants.
As a result of the above, net sales in the Ferrochemicals Division amounted to ¥2,580 million, up¥752 million or 41.2%. Operating profit amounted to ¥539 million, up ¥333 million or 161.3%.
d. Commercial Business Division
Commercial business sales were down year on year due to factors such as impact from the applicationof the Accounting Standard for Revenue Recognition from the fiscal year under review.
As a result of the above, net sales in the Commercial Business Division amounted to ¥837 million, down
¥1,576 million or 65.3%. Operating profit amounted to ¥194 million, up ¥41 million or 27.4%.
2

e. Facilities Division
Sales in chemical facility plant and general industrial plant construction were up year on year due to anincrease in contract work.
As a result of the above, net sales in the Facilities Division amounted to ¥1,901 million, up ¥325
million or 20.7%. Operating profit amounted to ¥379 million, up ¥135 million or 55.3%.
(2) Financial position
Total assets at the end of the consolidated fiscal year under review amounted to ¥109,902 million, up¥17,577 million from the end of the previous consolidated fiscal year.
Current assets amounted to ¥61,705 million, up ¥11,004 million from the end of the previous fiscal
year. The main factors were a ¥3,117 million increase in notes and accounts receivable—trade, andcontract assets (“notes and accounts receivable—trade” in the previous consolidated fiscal year), a ¥3,044
million increase in cash and deposits, and a ¥2,550 million increase in inventories.
Non-current assets amounted to ¥48,196 million, up ¥6,572 million from the end of the previous
fiscal year. The main factor was a ¥6,790 million increase in property, plant and equipment.
Current liabilities amounted to ¥27,265 million, up ¥6,527 million from the end of the previous fiscal
year. The main factors were a ¥2,200 million increase in notes and accounts payable—trade, a ¥2,048
million increase in income taxes payable, and a ¥1,709 million increase in other current liabilities.
Non-current liabilities amounted to ¥22,727 million, up ¥3,564 million from the end of the previous
fiscal year. The main factor was a ¥3,116 million increase in long-term borrowings. The balance ofinterest-bearing debt, including discounted notes receivable—trade and bonds payable, totaled ¥30,911
million, up ¥3,943 million from the end of the previous fiscal year.
Total net assets amounted to ¥59,908 million, up ¥7,485 million from the end of the previous fiscal
year. The main factor was a ¥6,899 million increase in retained earnings due to profit attributable toowners of parent.
(3) Cash flows
Cash and cash equivalents at the end of the consolidated fiscal year under review amounted to ¥26,372
million, up ¥3,033 million from the end of the previous fiscal year.
a. Cash flows from operating activities
Net cash provided by operating activities amounted to ¥11,176 million (compared with net cash of¥11,984 million provided in the previous fiscal year). This was mainly due to increases from profit before
income taxes of ¥11,160 million and depreciation of ¥6,680 million, and decreases from a ¥3,286 million
increase in trade receivables and a ¥2,417 million increase in inventories.
b. Cash flows from investing activities
Net cash used in investing activities amounted to ¥11,120 million (compared with net cash of ¥9,872
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 ¥2,416 million (compared with net cash of ¥4,350
million provided in the previous fiscal year). This was mainly due to proceeds from long-term borrowingsof ¥8,988 million, while repayments of long-term borrowings amounted to ¥5,309 million.

3

(Cash flow indicators)
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended March ended March ended March ended March ended March
31, 2018
31, 2019
31, 2020
31, 2021
31, 2022
Equity ratio
54.7%
52.7%
54.8%
55.2%
53.0%
Equity ratio on a market
87.8%
52.6%
53.0%
55.7%
56.5%
value basis
2.3
2.3
2.4
2.3
2.8
Ratio of interestbearing debt to cash
flows
Interest coverage ratio
62.3
83.6
51.7
61.1
36.3
(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, as social and economic activities increase in intensity, impact from various policies andimprovement in overseas economies are expected to lead to a rebound. However, attention must be paid
to worldwide geopolitical risks, the risk of a resurgent COVID-19, as well as the risk of fluctuations infinancial and capital markets. Amid these factors, the future remains highly uncertain, and the businessenvironment is expected to remain a challenging one.
Here, the Group has launched its new medium-term management plan, “Dominate 1000,” starting infiscal 2022. In this plan, we will strive to achieve our target of ¥100 billion in consolidated net sales infiscal 2024 through the core strategies of “promote expansion of the fine chemicals business,” “raise thelevel of the production technology,” “enhance human resource development,” and “increase social value.”
Furthermore, we have established the prime initiatives of our business activity as “giving the highest
priority to safety,” “being a profitable company,” and “development by and for everyone.” With this, astable management foundation, and an eye on where we want to be in 2030, we will provide a safe work
environment with job satisfaction, support technologies that are cutting-edge on a global stage with our
superior, original products, and aim to be an innovative, development-driven company to contribute to asustainable society.
In our full-year consolidated earnings outlook for the fiscal year ending March 31, 2023, we forecast
net sales of ¥76,000 million, exceeding net sales in the fiscal year ended March 31, 2022. By segment,
we expect sales to increase mainly in the fine chemicals business. For profit and loss, despite the effectof increased sales, we forecast operating profit of ¥10,900 million and ordinary profit of ¥10,800 million,
due to factors such as rising raw materials prices and increasing fixed manufacturing costs.
(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 make the appropriate return ofprofits to shareholders its first duty. Here, it provides consistent, proper dividends while securing funds
for capital investment, an indispensable driver of greater earnings, and strengthening its financial position.
These actions are founded in its business plans over the medium- to long-term and take into consideration
trends business performance over time.
In accordance with the above policy, the Company plans to pay a year-end dividend of 14 yen per
share for the fiscal year ended March 31, 2022 at the Board of Directors meeting to be held on May 27,
2022. This makes the annual dividend per share ¥22, including the interim dividend of ¥8 already paid.
For the next fiscal year, ending March 31, 2023, the Company plans to pay an annual dividend of¥22 per share (interim: ¥10, year-end: ¥12), taking into consideration trends in business performanceand 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 toraise funds from overseas, and has no immediate plans to change this policy.

43. Consolidated financial statements and notes(1) Consolidated balance sheet(Millions of yen)
As of March 31,
2021

As of March 31,
2022

Assets:Current assets
Cash and deposits
Notes and accounts receivable—trade

23,684
13,804

26,728—Notes and accounts receivable—trade, and contract
assetsElectronically recorded monetary claims—
operatingMerchandise and finished goods—

16,921

1,003

1,101

4,294

5,182

Work in process
Raw materials and supplies

3,737
2,543

4,416
3,526

Other
Allowance for doubtful accounts

1,703
(69)

3,896
(68)

Total current assets

50,70061,705

Buildings and structures, net
Machinery and equipment, net
Land

8,838
13,663
2,627

8,872
11,6552,633

Lease assets, net
Construction in progress
Other, net

223
2,699
3,378

351
11,001
3,707

Total property, plant and equipment

31,43038,221

Non-current assets
Property, plant and equipment

Intangible assets
Other

681

728

Total intangible assets

681

728

Investments and other assets
Investment securities
Deferred tax assets

7,845
997

7,464
1,165

671
(2)

621
(4)

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

5

9,512

9,246

41,62492,324

48,196109,902

(Millions of yen)
As of March 31,
2021
Liabilities:
Current liabilities
Notes and accounts payable—trade

As of March 31,
2022

5,868

8,068

Electronically recorded obligations—operating
Short-term borrowings

735
4,390

835
4,200

Current portion of long-term borrowings
Lease obligations

5,304
77

5,886
100

Income taxes payable
Provision for bonuses for directors (and other officers)
Other
Total current liabilities

551
79
3,730
20,738

2,600
134
5,439
27,26517,049145

20,166
558

30
128

23
137

6

11

1,704
98
19,163

1,754
75
22,72739,901

49,993

2,877

2,877

1,829
43,584(70)
48,221

1,829
50,483(68)
55,122

2,817

2,527

Foreign currency translation adjustment
Remeasurements of defined benefit plans

(214)
156

413
191

Total accumulated other comprehensive income
Non-controlling interests

2,759
1,443

3,132
1,654

52,42392,32459,908109,902

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
CapitalCapital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total net assets
Total liabilities and net assets

6

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Millions of yen)
From April 1, 2020
to March 31, 2021

From April 1, 2021
to March 31, 2022

Net sales
Cost of sales

51,92738,36262,28642,421Gross profit
Selling, general and administrative expenses

13,564
7,896

19,864
8,700

Operating profit

5,668

11,164Non-operating profit
Interest income

310Dividend income
Surrender value of insurance policies

185
54

204
—

Foreign exchange gains
Miscellaneous income

82
135

243
235

Total non-operating profit

461

694

203

313

62
220
60
547

84
204
110
713

5,582

11,145Extraordinary income
Gain on sale of investment securities
Total extraordinary income

—
—

131
131

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

139
265
404

116
—
116

Profit before income taxes

5,178

11,160

Income taxes—current
Income taxes—deferred
Total income taxes

1,508
(80)
1,428

3,234
(36)
3,198

ProfitProfit attributable to non-controlling interests

3,750
144

7,961
198

Profit attributable to owners of parent

3,605

7,762

Non-operating expenses
Interest expenses
Loss on valuation of derivatives
Loss on sale of trial products
Miscellaneous loss
Total non-operating expenses
Ordinary profit

7

Consolidated statement of comprehensive income(Millions of yen)
From April 1, 2020
to March 31, 2021

From April 1, 2021
to March 31, 2022

Profit

3,750

7,961

Other comprehensive income
Valuation difference on available-for-sale securities

1,996

(271)

52
206

649
35

Total other comprehensive income
Comprehensive income

2,255
6,005

413
8,374

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

5,809
195

8,135
239

Foreign currency translation adjustment
Remeasurements of defined benefit plans8(3) Consolidated statement of changes in equity
From April 1, 2020 to March 31, 2021
(Millions of yen)
Shareholders’ equity
CapitalBalance at beginning of period

2,877

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,829

40,783(12)

45,478Changes during period
Dividends of surplus

(805)

(805)

Profit attributable to ownersof parent

3,605

3,605

Purchase of treasury shares

(57)

(57)
—

Disposal of treasury shares
Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

—

—

2,800

(57)

2,742

2,877

1,829

43,584(70)

48,221

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Remeasurements ofdefined benefit
plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets

868

(263)

(50)

555

1,180

47,214

Changes during period
Dividends of surplus(805)

Profit attributable to ownersof parent

3,605

Purchase of treasury shares(57)

Disposal of treasury shares—

Net changes in items otherthan shareholders' equity

1,948

48

206

2,203

263

2,466

Total changes during period

1,948

48

206

2,203

263

5,209

Balance at end of period

2,817

(214)

156

2,759

1,443

52,4239

From April 1, 2021 to March 31, 2022
(Millions of yen)
Shareholders’ equity
CapitalBalance at beginning of period

2,877

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,829

43,584(70)

48,221

Changes during period
Dividends of surplus

(862)

(862)

Profit attributable to ownersof parent

7,762

7,762

Purchase of treasury shares

(0)

(0)

Disposal of treasury shares

1

1

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

—

—

6,899

1

6,901

2,877

1,829

50,483(68)

55,122

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Remeasurements ofdefined benefit
plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets

2,817

(214)

156

2,759

1,443

52,423

Changes during period
Dividends of surplus(862)

Profit attributable to ownersof parent

7,762

Purchase of treasury shares(0)

Disposal of treasury shares

1

Net changes in items otherthan shareholders’ equity

(289)

627

35

Total changes during period

(289)

627

35

372

211

7,485

Balance at end of period

2,527

413

191

3,132

1,654

59,908

10

372

211

584

(4) Consolidated statement of cash flows(Millions of yen)
From April 1, 2020
to March 31, 2021

From April 1, 2021
to March 31, 2022

Cash flows from operating activities
Profit before income taxes
Depreciation

5,178
6,767

11,1606,680Interest and dividend income
Interest expenses

(189)
203

(215)
313

Loss on retirement of non-current assets
Loss (gain) on sale of investment securities

139
—

116
(131)

Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables

265
381

—
(3,286)

Decrease (increase) in inventories
Increase (decrease) in trade payables

1,306
(158)

(2,417)2,070

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

(88)
120
(93)
13,832(2,155)231
147
12,516

Interest and dividends received
Interest paid
Income taxes paid

180
(196)
(1,833)218(308)(1,250)Net cash provided by operating activities

11,984

11,176(9,604)99(10,906)
167

Purchase of investment securities
Other

(17)
(350)

(19)
(362)

Net cash used in investing activities(9,872)(11,120)

171
8,732

(194)
8,988

(3,586)(805)(5,309)
(862)

(26)
(57)
(76)

(22)
(0)
(183)

Net cash provided by financing activities
Effect of exchange rate change on cash and cash equivalents

4,350
110

2,416
561

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

6,572
16,321

3,033
23,339445—

23,33926,372

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale and redemption of investment securities

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Dividends paid to non-controlling interests
Purchase of treasury shares
Other

Increase in cash and cash equivalents resulting from inclusion ofsubsidiaries in consolidation
Cash and cash equivalents at end of period11(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.
Morishita Bengara Kogyo 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 withequity 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 or retained
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.
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 averagemethod.)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 the methodof 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-balance method isused for “Machinery” within the Fine Chemicals Division. Overseas consolidated subsidiaries mainly use the straight-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.
12

(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 the fiscal
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 isrecorded 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 on shareissuance, an amount is recorded based on the estimated share award as of the end of the consolidated fiscal year under review.
(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 theend 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 average remaining
service period of employees at the time of occurrence of each consolidated fiscal year, starting from the consolidated 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 averageremaining service period of employees at the time of occurrence.
(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 finished goods
and recognizes revenue when control of the promised goods or services is transferred to the customer. However, for domestic sales
like these, revenue is recognized at the time of shipment, in principle.
In the commercial business, the Company mainly sells merchandise and recognizes revenue when control of the promised goods
or services is transferred to the customer. For sales of merchandise for which the Group is deemed to be an agent, revenue isrecognized 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, revenue is recognized over a certain period of time as performance obligations are
satisfied.
When the degree of progress toward satisfying the performance obligation in question cannot be reasonably estimated, but it isprobable 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. Thesetranslation 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 arereadily convertible to cash and bear only an insignificant risk of price fluctuation.

13

(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) andrelevant ASBJ regulations from the beginning of the consolidated fiscal year under review, and it recognizes revenue at the time thecontrol of promised goods or services is transferred to the customer at the amount expected to be received upon exchange of said
goods or services. The main changes resulting from the application of this accounting standard and other regulations are as follows.
(Revenue recognition for agent transactions)
For certain transactions in the commercial business, the Company previously recognized as revenue the gross amount ofconsideration received from customers. However, for commercial business transactions providing goods or services to a customer inwhich the Company's role is that of an agent, the Company now recognizes revenue at the net amount received from customers lessthe amount paid to suppliers.
Note that while there was no effect on the consolidated statement of income, as described in the notes to “(Segment information,etc.), 3. Matters related to changes in reportable segments,” there were effects on net sales per segment in the Fundamental
Chemicals Division, Fine Chemicals Division, Ferrochemicals Division, and Commercial Business Division.
(Revenue recognition for work contracts, etc.)
For work contracts, etc. in the facilities business, the Company previously recognized revenue on a completed work basis. However,as of the beginning of the consolidated fiscal year under review, revenue is recognized over a certain period of time as performanceobligations are satisfied. Note that for work in which the degree of progress toward satisfying the performance obligation in question
cannot be reasonably estimated, revenue is recognized on a cost recovery basis.
(Revenue recognition for export sales of finished goods)
For export sales of finished goods, the Company previously recognized revenue mainly on a free on board (FOB) basis. However,
the Company now recognizes revenue at the time when the risk burden is transferred to the customer, mainly based on trade terms
and conditions stipulated by Incoterms.
The application of the Accounting Standard for Revenue Recognition and relevant regulations is subject to the transitional treatment
provided in the proviso to Paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of theretrospective application assuming the new accounting policy had been applied to periods prior to the start of the consolidated fiscal
year under review was added to or subtracted from the opening balance of retained earnings of the consolidated fiscal year underreview, and thus the new accounting policy is applied from such opening balance. This is provided, however, that the new accounting
policy is not retrospectively applied to contracts where recognitions of nearly all the revenue amounts for periods prior to the start ofthe consolidated fiscal year under review are subject to the previous treatment by applying the method provided for in Paragraph 86 of
the Accounting Standard for Revenue Recognition.
As a result, net sales decreased by ¥242 million, cost of sales decreased by ¥203 million, and operating profit, ordinary profit, andprofit before income taxes each decreased by ¥38 million for the consolidated fiscal year under review. In addition, there was no effecton the opening balance of retained earnings.
Due to the application of the Accounting Standard for Revenue Recognition and relevant regulations, “notes and accounts
receivable—trade,” which were presented in “current assets” in the consolidated balance sheet in the previous consolidated fiscal year,
are included in “notes and accounts receivable—trade, and contract assets” in the consolidated fiscal year under review.
In accordance with the transitional treatment provided for in Paragraph 89-2 of the Accounting Standard for Revenue Recognition,
figures for the previous consolidated fiscal year have not been restated with the new approach to presentation.
In addition, in accordance with transitional treatment as stipulated in Paragraph 89-3 of the Accounting Standard for Revenue
Recognition, notes on revenue recognition for the previous consolidated fiscal year are not presented.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company has applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019) and relevant
ASBJ regulations from the beginning of the consolidated fiscal year under review, and it has applied the new accounting policy
provided for by the Accounting Standard for Fair Value Measurement and relevant regulations prospectively in accordance with thetransitional treatment provided for in Paragraph 19 of the Accounting Standard For Fair Value Measurement and Paragraph 44-2 of the
Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). Note that there was no effect on the
consolidated financial statements.
(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 and organic
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 the Commercial Business
Division, the Company sells fundamental chemicals and fine chemicals, and provides maintenance for containers and other services. In the
Facilities Division, the Company engages in facility-related construction work.

14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 the basis for
preparation of the consolidated financial statements.”
Profit by reportable segment is based on operating profit.
Inter-segment revenues and transfers are based on prevailing market prices.
3. Information on net sales, profit or loss, assets, liabilities, and other items by reportable segment
I. From April 1, 2020 to March 31, 2021
(Millions of yen)
Adjustment(Note 1)

Amount on
consolidated
financialstatements(Note 2)

51,927—51,927

2,417

8,007

(8,007)

—

6,399

3,993

59,934(8,007)51,927

206

152

244

5,734

(66)

5,668

75,785

3,321

2,902

5,372

97,957(5,632)

92,324

6,075

86

46

32

7,061

(294)

6,767

Reportable segment
Fundamental
Chemicals

Fine
Chemicals

Net sales to externalcustomers

5,776Inter-segment net sales ortransfers
Total

Ferrochemicals

Commercial
Business

Facilities

40,333

1,827

2,413

1,575

1,158

400

45

3,985

6,934

40,734

1,872

Segment profit (loss)

(240)

5,371

Segment assets

10,575821

Total

Net sales

Other items
Depreciation

Increase in property, plant
953
7,558
137
17
31
8,699
(264)
8,435
and equipment andintangible assets(Notes) 1. The segment profit (loss) adjustment of ¥66 million is elimination of inter-segment transactions.
The segment assets adjustment of ¥5,632 million includes inter-segment eliminations of ¥7,855 million and corporate assetsof ¥2,222 million that are not allocated to any reportable segment.
The adjustment of ¥294 million for depreciation under other items is inter-segment elimination.
The adjustment of ¥264 million for increase in property, plant and equipment and intangible assets under other items is intersegment elimination.
2. Segment profit (loss) is adjusted with operating profit in the consolidated statement of income.

15

II. From April 1, 2021 to March 31, 2022
(Millions of yen)
Adjustment(Note 1)

Amount on
consolidated
financialstatements(Note 2)

Reportable segment
Fundamental
Chemicals

Fine
Chemicals

Ferrochemicals

Commercial
Business

Facilities

7,966

49,000

2,580

837

1,901

62,286—62,286

—

—

—

1,329

2,979

4,309

(4,309)—7,966

49,000

2,580

2,166

4,881

66,595(4,309)62,286(69)

10,042

539

194

379

11,086

77

11,164

10,86496,426

3,789

3,150

6,173

120,404(10,502)

109,902

877

5,870

87

42

32

6,910

(229)

6,680

Total

Net sales
Net sales to externalcustomers
Inter-segment net
sales or transfers
Total
Segment profit (loss)
Segment assets
Other items
Depreciation

Increase in property,
640
11,63385
14
38
12,412(128)
12,284
plant and equipment andintangible assets(Notes) 1. The segment profit (loss) adjustment of ¥77 million is elimination of inter-segment transactions.
The segment assets adjustment of ¥10,502 million includes inter-segment eliminations of ¥12,881 million and corporate
assets of ¥2,379 million that are not allocated to any reportable segment.
The adjustment of ¥229 million for depreciation under other items is inter-segment elimination.
The adjustment of ¥128 million for increase in property, plant and equipment and intangible assets under other items is intersegment elimination.
2. Segment profit (loss) is adjusted with operating profit in the consolidated statement of income.
4. Matters related to changes in reportable segments
As described in “Changes in accounting policies,” the Company has applied the Accounting Standard for Revenue Recognition and relevant
regulations from the beginning of the consolidated fiscal year under review, changing its accounting treatment method for revenue
recognition. As a result, measurement methods have similarly been changed for business segment profit and loss.
The results of this change were as follows for the consolidated fiscal year under review compared with the previous treatment methods. For
the Fundamental Chemicals Division, (1) net sales to external customers increased by ¥1,210 million, and (2) inter-segment net sales ortransfers decreased by ¥1,210 million. As a result, total net sales did not change.
For the Fine Chemicals Division, (1) net sales to external customers increased by ¥195 million, and (2) inter-segment net sales or transfers
decreased by ¥374 million. As a result, total net sales decreased ¥178 million, segment profit decreased by ¥38 million, and segment assets
decreased by ¥38 million.
For the Ferrochemicals Division, (1) net sales to external customers increased by ¥95 million, and (2) inter-segment net sales or transfers
decreased by ¥95 million. As a result, total net sales did not change.
For the Commercial Business Division, (1) net sales to external customers decreased by ¥1,680 million, and (2) inter-segment net sales ortransfers decreased by ¥3,758 million. As a result, total net sales decreased by ¥5,438 million.
For the Facilities Division, (1) net sales to external customers decreased by ¥63 million, and (2) inter-segment net sales or transfers increasedby ¥552 million. As a result, total net sales increased by ¥489 million.
There was no impact on segment profit for the Fundamental Chemicals Division, Ferrochemicals Division, Commercial Business Division,or Facilities Division.

16

[Related information]
From April 1, 2020 to March 31, 2021
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(Millions of yen)Japan

Europe and North
AmericaAsia
26,331

23,088

Other

Total
—

2,508

51,927(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 ¥12,933 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(Millions of yen)
Japan

Asia
24,711

Total
6,719

31,430(Note) Property, plant and equipment in the Asia region includes property, plant and equipment of ¥5,628 million in South Korea, which
accounts 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

Samsung Electronics Co., Ltd.

10,116

Fine Chemicals

KIOXIA Corporation

6,362

Fine Chemicals

From April 1, 2021 to March 31, 2022
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(Millions of yen)
Japan

Asia
29,534

Europe and North
America
29,384

3,368

Other

Total
—

62,286(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 ¥14,125 million in South Korea and net sales of ¥8,995 million in
China, which account for more than 10% of the net sales on the consolidated statement of income.
(2) Property, plant and equipment(Millions of yen)
Japan

Asia
26,676

Total
11,544

38,221(Note) Property, plant and equipment in the Asia region includes property, plant and equipment of ¥7,829 million in South Korea, which
accounts for more than 10% of the property, plant and equipment on the consolidated balance sheet.

17

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

Net sales

Samsung Electronics Co., Ltd.

Related segment

12,144

Fine Chemicals[Information about amortization and unamortized balance of goodwill by reportable segment]
From April 1, 2020 to March 31, 2021
Not applicable.
From April 1, 2021 to March 31, 2022
Not applicable.
[Information about gain on bargain purchase by reportable segment]
From April 1, 2020 to March 31, 2021
Not applicable.
From April 1, 2021 to March 31, 2022
Not applicable.
(Per share information)(Yen)
From April 1, 2020
to March 31, 2021

From April 1, 2021
to March 31, 2022

Net assets per share

887.42

1,014.01

Basic earnings per share

62.73

135.12(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. As described in “Changes in accounting policies,” the Company applies the Accounting Standard for Revenue
Recognition and relevant regulations. As a result, basic earnings per share for the consolidated fiscal year under review
decreased by ¥0.47.
4. The basis for calculation of basic earnings per share is as follows:
From April 1, 2020
to March 31, 2021
Profit attributable to owners of parent (Millions of yen)

From April 1, 2021
to March 31, 2022

3,605

7,762

Amount not attributable to common shareholders(Millions of yen)——

Profit attributable to owners of parent for commonshares (Millions of yen)

3,605

7,762

57,477,105

57,448,551

Average number of common shares during the period(Shares)(Significant subsequent events)
Not applicable.

18