Review of performance management and development cost classifications in connection with the 2025 Medium-Term Management Plan

「As a result of this change, compared with the previous method, segment profit for the Functional Materials Business for the current consolidated fiscal year increased by ¥116.363 million, with the adjustment increasing by the same amount. For depreciation expenses included in other items, the amount for the Functional Materials Business decreased by ¥22.723 million, with the adjustment increasing by the same amount.」

「Beginning with the current consolidated fiscal year, the first year of the 25 Medium-Term Management Plan, we reviewed our performance management methods to more accurately assess the earnings power of each business segment. Accordingly, to better match sales with the related cost of sales, certain administrative expenses related to the Corporate Administration Division and certain indirect expenses related to the Quality Assurance Division and the Production Engineering Division, which had previously been recorded as segment expenses of the Functional Materials Business, are now presented as corporate expenses. In addition, we reorganized the R&D Division to strengthen the development of new functional materials products and classified part of the development costs as corporate expenses. This established a structure that better matches sales with the related cost of sales and more accurately captures the actual state of development investment.」