トクヤマ（4043） – Summary of Consolidated Financial Statements for Fiscal 2021 (JP GAAP)

Summary of Consolidated Financial Statements for the Fiscal 2021 (JPGAAP) Tokuyama Corporation (URL https://www.tokuyama.co.jp/eng/) Representative: Contact: Stock exchange listings: Local Code : Tokyo 4043 April 28, 2022 Hiroshi Yokota, President and Representative Director Tetsuya Nakano, General Manager, Corporate Communications & Investor Relations Dept. +81-3-5207-2552Scheduled date of dividends payout : Preparation of supplementary quarterly explanatory materials: Yes Quarterly business results IR briefing to be held: – Yes (for institutional investors and analysts) 1. Consolidated results for fiscal year ended March, 2022 (Apr. 1, 2021 – Mar. 31, 2022)(1) PerformanceNote: All amounts are rounded down to the nearest million yen.% indicates year-on-year changes.Net sales Operating profit Ordinary profit Profit attributable to owners of parent Fiscal 2021 Fiscal 2020 (millions of yen) 293,830 302,407 (2.8) (4.3) [%] (millions of yen) 24,539 30,921 [%] (20.6) (9.8) (millions of yen) 25,855 30,796 [%] (16.0) (6.2) (millions of yen) 28,000 24,534 [%] 14.1 23.1 (Note) Comprehensive income: FY21: 31,160 million yen [2.1%] FY20: 30,524million yen [43.4％] Basic earnings per share Diluted net income per share Ordinary profit to total assets Operating profit to net sales Fiscal 2021 Fiscal 2020 (yen)389.09 351.11 (yen)－－(Reference) Equity in earnings of unconsolidated subsidiaries and affiliates: FY21: 1,043 million yen [%]6.3 8.0 [%]8.4 10.2 FY20: 949 million yen Net income to shareholders’ equity [%]13.2 13.4 (2) Financial position Total assetsNet assetsMar 31, 2022 Mar 31, 2021 (millions of yen) 433,210386,794(millions of yen) 232,917205,261FY21:Shareholders’ equity ratio Net assets per share [%] 51.851.3(yen) 3,120.25 2,758.37 (Reference) Shareholders’ equity: 224,506 million yenFY20: 198,561 million yen(Note)The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020), etc. effective from the beginning of the first quarter ended June 30, 2021 in accordance with transitional treatment. For more details, please refer to “3. Consolidated Financial Statements and (5) Notes on Quarterly Consolidated Financial Statements (Changes in accounting policy)” on page 22 of the Accompanying Materials to this Summary of Quarterly Consolidated Financial Statement. (3) Cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Fiscal 2021 Fiscal 2020(millions of yen) 25,986 43,314(millions of yen) (33,797) (19,276)(millions of yen) 5,118 (22,530)Cash and cash equivalents at the end of the year (millions of yen) 82,496 83,05012. Dividends Annual dividends （Period） 1st quarter (yen)2nd quarter 3rd quarter (yen) Year- end (yen) Total (yen) Fiscal 2020 — 35.00 — 35.00 70.00 Fiscal 2021 — 35.00 — 35.00 70.00 4,956 5,045 Fiscal 2022 （Forecast） — 35.00 — 35.00 70.00 Total dividends paid (Total) (millions of yen) Dividend payout ratio (Consolidated) [%] Dividend on net assets ratio (Consolidated) [%] 19.9 18.0 28.8 2.7 2.4 3. Consolidated performance forecast for fiscal 2022 (April 1, 2022 – March 31, 2023) (% indicates the rate of change over the corresponding previous periods respectively)Basic earnings per share Operating profit Ordinary profit Profit attributable to owners of parent Net sales Fiscal 2022 (millions of yen) 360,000 (millions of (millions of (millions of [%] 22.5 yen) 24,500 [%] (0.2) yen) 25,000 [%] (3.3) yen) 17,500 [%] (37.5) (yen) 243.22 *Notes : No (1) Changes in significant subsidiaries during this period (2) Changes of accounting policies, changes in accounting estimates, and retrospective restatements i. Changes in accounting policy by revision of accounting standards: ii. Changes in accounting policy other than the above: iii. Changes in accounting estimates: iv. Retrospective restatements: Yes No No No (Note) For more details, please refer to “3. Consolidated Financial Statements and (5) Notes on Quarterly Consolidated Financial Statements (Changes in accounting policy)” on page 22 of the Accompanying Materials to this Summary of Quarterly Consolidated Financial Statement. (3) Number of shares issued (in common stock) i. Number of shares issued at end of period(including treasury stock): Fiscal 2021:72,088,327 Fiscal 2020:72,088,327ii. Number of treasury stock at end of period: Fiscal 2021:136,954 Fiscal 2020:103,403iii. Average number of shares over period: Fiscal 2021:71,963,931 Fiscal 2020:69,877,138 2(Reference) Summary of Non-Consolidated Operating Results 1. Non-consolidated results for fiscal year ended March 31, 2022 (April 1, 2021 – March 31, 2022) (1) Performance Note: All amounts are rounded down to the nearest million yen.% indicates year-on-year changes.Net sales Operating profit Ordinary profit Net profit Fiscal 2021 Fiscal 2020 (millions of yen) 215,374 180,946 19.0 (4.4) [%] (millions of yen) 14,641 22,232 [%] (34.1) (15.2) (millions of yen) [%] 16,947 (26.7) (9.4) 23,127 (millions of yen) [%] 22,614 22,514 0.4 51.0 Net profit per share Diluted net profit per share (yen) 314.24 322.20 (yen) － － Fiscal 2021 Fiscal 2020 (2) Financial position Total assets Net assets Shareholders’ equity ratio Net assets per share Mar 31, 2022 Mar 31, 2021 (millions of yen) 354,316 315,154 (millions of yen) 168,828 150,983 FY21: 168,828 million yen 47.6 47.9 [%] (yen) 2,346.42 2,097.44 (Reference) Shareholders’ equity: FY20: 150,983 million yen(Note)The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020), etc. effective from the beginning of the first quarter ended June 30, 2021 in accordance with transitional treatment. (Note) This summary of consolidated financial statements is not inside the scope of audit procedure by certified public accountants or audit corporations. (Note) Cautions pertaining to appropriate use of performance forecast and other particular items (Cautions related to Forward-looking statement) The performance forecast and other forward-looking statements contained in this material have been prepared on the basis of information available at this point and certain assumptions which are judged to be rational, and may be substantially different from the actual performance because of various factors that may arise from now on. (Access to supplementary explanations on business results) The Company also supplementary materials “Presentation for IR Meeting” through TDnet at the same date. 3Contents for Accompanying Materials 1. Management Policy (1) Assessment of Operating Environment (2) Management Policy (3) Pending Issues (4) Targets of Medium-Term Management Plan 2025 2. Analysis of Operating Results and Financial Position (1) Analysis of Operating Results (2) Analysis of Financial Position (3) Achievement of Medium-Term Management Plan 3. Consolidated Financial Statements (1) Consolidated Balance Sheets (2) Consolidated Statements of Income (3) Consolidated Statements of Comprehensive Income (4) Consolidated Statements of Cash Flows (5) Notes on Consolidated Financial Statements (6) Segment Information (7) Material Subsequent Event …………… …………… …………… …………… …………… …………… P. 2 P. 2 P. 2 P. 5 P. 6 P. 6 …………… P. 12 …………… P. 15 …………… P. 16 …………… P. 16 …………… P. 18 …………… P. 19 …………… P. 20 …………… P. 22 …………… P. 24 …………… P. 27 (4) Basic Policy for Profit Distribution and Dividends for Fiscal 2021 and 2022 …………… P. 15 11. Management Policy (1) Assessment of Operating Environment Our Tokuyama Factory’s highly efficient integrated production processes are the source of our competitiveness, and energy-intensive businesses dependent on coal-fired power generation are our earnings drivers. However, changes in the industrial structure are accelerating, while a number of factors are expected to remain ongoing: changes in the social environment, including the rapid progress of the digital revolution; shrinkage in domestic demand in Japan due to the low birthrate and aging demographics; increased health awareness; growing environmental awareness and the tightening of regulations toward the realization of a recycling-based society. We therefore believe that it is essential to secure earnings power and competitiveness by building and growing businesses that branch out in new directions. (2) Management Policy Based on this assessment of the operating environment, we are acutely aware of the need to stay in harmony with the environment and have adopted the goal of remaining a company that creates the value that consumers demand in collaboration with its customers. We have also updated our mission statement (management philosophy): “To create a bright future in harmony with the environment, in collaboration with its customers, based on chemistry.” To serve as a management policy based on our mission statement, we have also formulated the following ideals. ・ Be a value-creative company that places first priority on R&D and marketing ・ Be a company that never stops challenging new domains while refining and exploiting its ・ Be a company with healthy employees who have healthy families and take pride in their work ・ Be a company that fosters bonds with people in communities and societies worldwide unique strengths at their company (3) Pending Issues To serve as Tokuyama’s management strategies over the medium to long term, the following three themes have been positioned as priority measures in the Medium-Term Management Plan 2025, which was formulated on February 25, 2021. 1. Transform business portfolio Positioning electronics, health, and the environment as new growth fields, we are aiming for these to account for 50% or more of the consolidated net sales ratio. In the Chemicals and Cement business segments, we will promote increased efficiency and ensure stable profits. In the fiscal year ended March 31, 2022, the Company completed construction of 2manufacturing facilities to demonstrate mass production technology for silicon nitride, which is used as an insulation and heat-dissipation material for the power semiconductor modules installed in eco-friendly automobiles and other applications. In the years to come, we will continue to accelerate business development in the thermal management materials market, where high growth is expected, for example in the automotive field, where progress is being made in electrification, and in the information and communications field. The Company also agreed to establish a joint venture with SK Geo Centric Co., Ltd. (SKGC) in Korea, which manufactures and sells high-purity isopropyl alcohol (IPA) to the electronics industry, where the product is used in the semiconductor manufacturing process. By combining its strengths in high-purity IPA manufacturing technology and quality control capabilities with SKGC’s strong presence in Korea, the Company will establish a new production and sales system to meet the needs of Korean customers. At the Kashima Factory, work to enhance the dental filling manufacturing process has been completed. In addition to Europe and the United States, which are the main markets for dental materials, the Company will develop business globally while capturing growing demand, for example in India and Brazil, which will lead to business expansion. 2. Contribute to mitigation of global warming In response to growing global environmental awareness, we have set the goal of “achieving carbon neutrality in 2050.” To achieve this goal, we are aiming to decarbonize raw material and fuel inputs, develop and deploy green products as well as accelerate the technological development and the starting of new businesses in next-generation energies, such as hydrogen and ammonia. In addition, we will work to improve the processes at the Tokuyama Factory, promote the development and utilization of biomass fuels in Japan and overseas, and realize a 30% reduction in total CO2 emissions (compared with FY2019) in FY2030. In the consolidated fiscal year under review, the Company participated in the Shunan Petrochemical Complex Decarbonization Council, which was established with the aim of maintaining and strengthening the industrial competitiveness of the Shunan Petrochemical Complex and promoting decarbonization. In the years to come, we will undertake approaches from the perspectives of collaboration with the petrochemical complex, industrial collaboration, and regional collaboration toward the realization of carbon neutrality in 2050. In addition, the Company has signed a memorandum of understanding (MOU) with Mitsubishi Heavy Industries Engineering Ltd. with regard the implementation of a CO₂capture demonstration testing program for cement plants. The plan involves conducting demonstration tests to capture CO₂from an operational cement plant over a period of nine months from June 2022. We will evaluate the reliability of long-term continuous operations and analyze data such as impurities in the recovered CO₂gas to verify the applicability of the optimum CO₂recovery technology in cement factories. to 3 3. Practice socially responsible management Tokuyama approaches its CSR activities in accordance with a basic philosophy of continuously working with society to build a sustainable future by contributing to the resolution of social issues and earning greater trust from various stakeholders with the aim of improving corporate value. To achieve this, we extracted social issues related to CSR management and identified the following 10 items as materiality (important issues) by adding the promotion of mental and physical health to the nine items listed up to last year. We are now working on solving each of these problems. ・ Helping to fight global warming ・ Conserving the environment ・ Preventing accidents and preparing for disasters ・ Developing products and technologies that address social issues ・ Better chemical management and product safety ・ Engaging with local communities ・ Promoting CSR procurement ・ Developing human resources ・ Promotion of diversity and career fulfillment ・ Promotion of physical / mental health With regard to contributions to the mitigation of global warming, which for us remains one of the Group’s most important issues, we expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in March 2021. In March, 2022, we announced the Group’s efforts to address climate change. Our climate change-related governance structure and risk management processes, which are required to be disclosed by the TCFD, as well as climate-related risks and opportunities were discussed as important matters at a meeting of the CSR Promotion Council, which is chaired by the president, comprises all executive officers in Japan and reports to the Board of Directors. A variety of committees have been set up to enhance the effectiveness of the CSR Promotion Council, and in the fiscal year under review we newly established a Sustainability Committee to deliberate matters, such as climate change, human rights, and CSR procurement, and build a mechanism to proactively evaluate risks and opportunities. Concerning the promotion of physical and mental health, the president, who is the senior manager, has been serving as the general manager in charge of health management and working on health management to improve the physical and mental health of employees and their families and to create a comfortable workplace. As a result, in March 2022, Tokuyama was certified for the first time as a Health & Productivity Management Outstanding Organization (White 500) under the program jointly undertaken by the Ministry of Economy, Trade and Industry and the Japan Health Council. Underpinned by the commitment of its top management, the Company will continue to promote health management initiatives. 4(4) Targets of Medium-Term Management Plan 2025 The goals to be achieved in 2025 are as follows. Index FY2021 (Results) FY2025 (Target) 293.8 billions of yen 320.0 billions of yen 24.5 billions of yen 40.0 billions of yen Growth Business Net Sales Growth Rate (CAGR) Net Sales Operating Profit ROE Assumption Exchange rate (¥/US$) Domestic naphtha price (¥/kl) 19.9% 13.2% 112 56,800 Over 10% Over 10% 105 32,500 52. Analysis of Operating Results and Financial Position (1) Analysis of Operating Results <1> Operating results for the fiscal year under review [1] Overview of performance for the fiscal year under review In the fiscal year ended March 31, 2022, the global economy was on a recovery trend as, supported by the fiscal and monetary policies in each country, the measures designed to restrict economic activities to prevent the spread of COVID-19 infections had been gradually relaxed. In the latter part of the fiscal year, however, Russia’s invasion of Ukraine occurred and its effects such of upswing in energy prices began to be felt. In the Japanese economy, supply constraints, including shortages of semiconductors and in the supply of parts due to the spread of COVID-19 infections in Southeast Asia, hindered exports and personal consumption in the first half of the fiscal year under review, and economic recovery remained moderate. In the latter half of the fiscal year, the economy showed signs of picking up as the level of economic and social activity was gradually raised, but it became uncertain due to the effects of the spread of the omicron variant of COVID-19 and the situation in Ukraine. The Company has been working on the priority measures of its Medium-Term Management Plan 2025: transform business portfolio, contribute to mitigation of global warming, and practice socially responsible management. In terms of business performance, the increase in net sales was due to the rise in the selling prices of petrochemical products and the steady sales of semiconductor-related products. However, sales decreased as a result of applying the Accounting Standard for Revenue Recognition. In addition, operating profit decreased due to factors that included increases in the costs of raw materials and fuel. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020), etc. effective from the beginning of the first quarter ended June 30, 2021 in accordance with transitional treatment. The effect of this change was to decrease net sales by ¥ 46,530 million and cost of sales by ¥ 46,530 million compared with the previous accounting method. For more details, please refer to “3. Consolidated Financial Statements and (5) Notes on Consolidated Financial Statements (Changes in accounting policy).” Fiscal 2021 Fiscal 2020 Rate of change (%) Net sales Ordinary profit Operating profit (Unit: Millions of yen) Profit attributable to owners of parent 24,539 30,921 (20.6) 25,855 30,796 (16.0) 28,000 24,534 14.1 293,830 302,047 (2.8) 6Net sales Sales rose owing to higher petrochemical product sales prices and solid sales of semiconductor-related products. Nevertheless, net sales decreased 2.8%, or ¥ 8,577 million compared with the previous consolidated fiscal year, to ¥ 293,830 million due to the application of Accounting Standard for Revenue Recognition, etc. Although raw material and fuel costs increased, cost of sales decreased 4.3%, or ¥ 8,837 million compared with the previous consolidated fiscal year, to ¥ 198,417 million due to the application of Accounting Standard for Revenue Recognition, etc. SG&A expenses increased 10.3%, or ¥ 6,642 million compared with the previous consolidated fiscal year, to ¥ 70,872 million mainly due to increases in logistics costs and R&D expenses. Cost of sales SG&A expenses Operating profit Operating profit decreased 20.6%, or ¥ 6,382 million compared with the previous consolidated fiscal year to ¥ 24,539 million. Despite upturn in export prices of vinyl chloride monomer, this decrease in operating profit was mainly due to higher raw material and fuel costs. Non-operating income/expenses, Ordinary profit Non-operating income/expenses improved by ¥ 1,440 million compared with the previous consolidated fiscal year. As a result of the above, ordinary profit decreased 16.0 %, or ¥ 4,941 million compared with the corresponding period of the previous consolidated fiscal year, to ¥ 25,855 million. Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable to owners of parent consolidated fiscal year. Extraordinary income/losses improved by ¥ 1,631 million compared with the previous As a result of the above, profit before income taxes decreased 10.7%, or ¥ 3,309 million compared with the previous consolidated fiscal year, to ¥ 27,649 million. Profit after deducting income taxes calculated in an appropriate way increased 11.3%, or ¥ 2,854 million compared with the previous consolidated fiscal year, to ¥ 28,175 million. Profit attributable to owners of parent increased 14.1%, or ¥ 3,466 million compared with the corresponding period of the previous consolidated fiscal year, to ¥ 28,000 million. 7[2] Operating performance by business segment (Operating results by segment) Effective from the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, the Company has reviewed our business segment and changed them to six segments: Chemicals, Cement, Electronics Materials, Life Science, Eco Business and Others. Data for the corresponding period of the previous fiscal year has been adjusted to reflect this change to enable the year-on-year comparison presented as follows. Sales Reportable segment (Unit: Millions of yen) Chemicals Cement Electronic Materials Life Science Eco Business Others Total Adjustment Fiscal 2021 101,482 50,366 74,996 33,564 10,305 36,302 307,018 (13,188) Fiscal 2020 81,385 89,593 61,853 28,662 9,581 62,383 333,460 (31,053) 302,407 24.7 (43.8) 21.2 17.1 7.6 (41.8) (7.9) – (2.8) Rate of change (%) Operating profit (loss) Fiscal 2021 Fiscal 2020 Rate of change (%) Chemicals (Unit: Millions of yen) Reportable segment Chemicals Cement Electronic Materials Life Science Eco Business Others Total Adjustment 14,225 (1,912) 7,232 6,036 (468) 3,851 28,964 (4,425) 24,539 13,585 4,454 7,104 3,498 (368) 5,677 33,952 (3,030) 30,921 4.7 – 1.8 72.6 – (32.2) (14.7) – (20.6) (Note) Sales and operating profit (loss) in each segment include inter-segment transactions. Figures in quarterly consolidated profit statement 293,830 Figures in quarterly consolidated profit statement Caustic soda earnings declined. This downturn in earnings was due to manufacturing costs rising as a result of higher raw material and fuel costs. Earnings from vinyl chloride monomer increased due to the upturn in export prices. Earnings from vinyl chloride resin increased due to factors that included the progress made with domestic sales price revisions. Decrease in earnings from soda ash and calcium chloride was owing to the upswing in raw material and fuel costs triggering an increase in manufacturing costs. As a result of the above, segment net sales increased 24.7% compared with the previous consolidated fiscal year, to ¥ 101,482 million and operating profit increased 4.7% to ¥ 14,225 million. The segment reported higher earnings on higher sales. 8Cement Despite shipments of being in line with the corresponding period of the previous year, cement earnings deteriorated due to manufacturing costs rising as a result of higher raw material costs. As a result of the above, segment net sales decreased 43.8% compared with the corresponding period of the previous year, to ¥ 50,366 million and operating loss amounted to ¥ 1,912 million (Posted operating profit of ¥ 4,454 million in the previous consolidated fiscal year). Electronic Materials Sales of semiconductor-grade polycrystalline silicon were firm due to the spread of 5G and the expansion of data centers, and although raw material prices rose, earnings increased. IC Chemicals earnings decreased despite sales volumes increasing mainly overseas. This downturn largely reflected higher raw material costs. Despite an upswing in raw material costs, earnings from fumed silica increased owing to higher sales volume centered on applications for semiconductor abrasives. Thermal management materials earnings were in line with the previous consolidated fiscal year. Although sales volume was solid, this largely reflected higher R&D expenses at the Center for Commercialization of Advanced Technology. As a result of the above, segment net sales increased 21.2% compared with the previous consolidated fiscal year, to ¥ 74,996 million and operating profit increased 1.8% to ¥ 7,232 million. The segment reported higher earnings on higher sales. Life Science Dental materials earnings grew thanks to an increase in shipments to overseas. Plastic lens-related materials earnings increased owing to a an increase in shipments to overseas of eyeglass lens photochromic materials. Pharmaceutical ingredients and intermediates earnings increased, owing mainly to a robust sales volume of generic pharmaceuticals. As a result of the above, segment net sales increased 17.1% compared with the previous consolidated fiscal year, to ¥ 33,564 million and operating profit increased 72.6% to ¥ 6,036 million. The segment reported higher earnings on higher sales. 9Eco Business To make the environment segment one of our business pillars of the future, we consolidated the environment-related businesses scattered within the Group and newly established them as a segment that aims for new business development from the current fiscal year. Segment net sales increased 7.6% compared with the corresponding period of the previous year, to ¥ 103,05 million and operating loss amounted to ¥ 468 million (posted operating loss of ¥ 368 million in the corresponding period of the previous year). <2> Outlook for fiscal 2022 [1] Outlook for operating forecasts for fiscal 2022 In the current fiscal year, as coexistence with COVID-19 progresses due to vaccinations and other factors, and social activities head toward normalization, it is expected that the Japanese economy will recover due to the improvement of overseas economies. Impacted by the situation in Ukraine, however, there are downside risks, such as rising raw material prices, fluctuations in the financial and capital markets, and supply constraints. Based on current information, we forecast net sales of ¥ 360 billion, an increase of 22.5% (¥ 66.1 billion) compared with the consolidated fiscal year under review, operating profit of ¥24.5 billion, a decrease of 0.2% (¥ 0.0 billion), ordinary profit of ¥25 billion, a decrease of 3.3% (¥ 0.8 billion) and profit attributable to owners of parent of ¥17.5 billion, a decrease of 37.5% (¥ 10.5 billion). Net sales Operating profit Ordinary profit (Unit: Millions of yen) Profit attributable to owners of parent 25,000 25,855 (3.3) 17,500 28,000 (37.5) Fiscal 2022 Fiscal 2021 Rate of change (%) 360,000 293,830 22.5 24,500 24,539 (0.2) price of ¥78,000/kl. [2] Outlook for segment forecasts for fiscal 2022 Chemicals These forecasts are calculated based on an exchange rate of ¥125/$ and a domestic naphtha Due to rising market prices of crude oil, coal, etc., raw material and fuel costs are on the rise, especially for petrochemical products. In terms of earnings, we expect that the high fluctuation risk situation will continue. In such an environment, we will strengthen cost competitiveness by adjusting selling prices and reducing basic unit and fixed costs while striving to secure revenue. 10Cement Expected to recover moderately due to full-scale redevelopment work in urban areas, domestic demand for cement is expected to remain on par with fiscal 2021 due to a decrease in public investment and longer construction periods. However, we anticipate that the environment surrounding the business, such as trends in raw material prices, will remain beset with uncertainty. In such an environment, we will continue to revise sales prices and work to secure earnings by, for example, thoroughly reduce manufacturing costs and implementing measures at each sales base. Electronic Materials In this segment, the Company will aggressively make investments to further expand sales of semiconductor-related products. The semiconductor market is expected to remain firm against the backdrop of the spread of 5G and the increase in the number of data centers. In accordance with the progress being made in miniaturization, customer demands for higher quality and stable supply are increasing. In such an environment, we will pursue higher quality polycrystalline silicon for semiconductors and thereby set ourselves apart from other companies. Establishing manufacturing and sales bases in Taiwan and South Korea, in IC chemicals we will focus on establishing a global supply system that responds to growing demand. In the case of thermal management materials, we will continue to expand sales of existing products while commercializing new products. Life Science The overseas shipment volumes of plastic lens-related materials and dental materials are on an increase trend. We will continue to focus on new product development and sales activities in response to changes in customer needs and the market, while aiming to increase profits. With regard to medical diagnosis systems, We will promote the utilization and collaboration of resources throughout the Group, further strengthen the development of diagnostic reagents, and expand our business. Eco Business To make the environment segment one of our business pillars of the future, we will expand existing businesses, such as ion exchange membranes, plastic window sashes, and recycling of waste gypsum boards, while accelerating technological development and commercialization to reduce CO2 emissions. Serving as a symbol of our business portfolio transformation, the eco business will contribute to a sustainable society and realize business growth. Others The “Others” segment includes businesses which are responsible for the Group’s sales, logistics, utilities and other functions. The segment will work to increase Group-wide earnings by continuing to reduce costs. 11(2) Analysis of Financial Position <1> Analysis of assets, liabilities and net assets Summary of Consolidated Balance Sheets Mar 31, 2021 Mar 31, 2022 (Unit: Millions of yen) Amount of Rate of change change (%) Assets Liabilities （Interest-bearing debt） Net assets （Shareholders’ equity） Financial indicators D/E ratio Net D/E ratio Shareholders’ equity ratio (%) (%) 386,794 181,533 98,437 205,261 198,561 433,210 200,292 109,219 232,917 224,506 46,415 18,758 10,782 27,656 25,945 Mar 31, 2021 Mar 31, 2022 Amount of change (0.01) 0.05 0.5points 0.49 0.12 51.8 0.50 0.07 51.3 52.0 12.0 10.3 11.0 13.5 13.1 Shareholders’ equity ratio based on market price 28.5 (23.5)points (Note) *D/E ratio Net D/E ratio Shareholders’ equity ratio (%) Shareholders’ equity ratio based on market price (%) : market capitalization / total assets : interest-bearing debt / shareholders’ equity : (interest-bearing debt – Cash and cash equivalents) / shareholders’ equity : interest-bearing debt / total assets (Assets) Property, plant and equipment, raw materials and supplies, notes and accounts receivable – trade, investments and other assets, merchandise and finished goods, work in process and other current assets increased by ¥ 15,576 million, ¥ 8,335 million, ¥ 7,300 million, ¥ 5,848 million, ¥ 4,519 million, ¥ 3,268 million and ¥ 1,302 million, respectively. As a result, total assets amounted to ¥ 433,210 million, an increase of ¥ 46,415 million compared with those as of March 31, 2021. (Liabilities) Bonds payable increased ¥ 15,000 million and notes and accounts payable – trade increased ¥ 9,507, while long-term loans payable and the current portion of long-term loans payable decreased ¥ 2,936 million, other current assets decreased ¥ 1,491 million, and short-term loans payable decreased ¥ 1,386 million. those as of March 31, 2021. As a result, total liabilities amounted to ¥ 200,292 million, up ¥18,758 million compared with 12(Net assets) Retained earnings increased ¥ 23,202 million as a result of posting profit attributable to owners of parent mainly, and foreign currency translation adjustment increased ¥ 2,683 million. As a result, net assets totaled ¥ 232,917 million, an increase of ¥ 27,656 million compared with those as of March 31, 2021. (Financial indicators) With regard to the consolidated fiscal year under review, the D/E ratio improved 0.01 compared with the previous consolidated fiscal year to 0.49 times due to a ¥ 25,945 increase in shareholders’ equity, in spite of a ¥ 10,782 million increase in interest-bearing debt. <2> Analysis of cash flows Summary of Consolidated Statements of Cash Flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents (Unit: Millions of yen) Fiscal 2020 Fiscal 2021 43,314 (19,276) (22,530) 623 2,131 25,986 (33,797) 5,118 1,267 (1,424) Increase/decrease in cash and cash equivalents due to changes in the accounting period of consolidated subsidiaries – 870 Cash and cash equivalents at end of year 83,050 82,496 (Cash flows from operating activities) Net cash provided by operating activities totaled ¥ 25,986 million, a decrease ¥ 17,328 million compared with the previous consolidated fiscal year. Principal items included depreciation of ¥ 19,716 million and increase in inventories of ¥ 15,704 million. (Cash flows from investing activities) Net cash used in investing activities totaled ¥ 33,797 million, an increase of ¥ 14,520 million compared with the previous consolidated fiscal year. Major contributory factors were payments for purchases of property, plant and equipment of ¥ 31,887 million. 13(Cash flows from financing activities) Net cash provided in financing activities amounted to ¥ 5,118 million, an increase of ¥ 27,648 million compared with the previous fiscal year. This was primarily attributed to outflow due to repayments of long-term loans of ¥ 9,150 million, cash dividends paid of ¥ 5,034 million, proceeds from issuance of bonds of ¥ 14,926 million, and proceeds from long-term borrowings of ¥ 6,218 million. <3> Procurement of Funds and Liquidity (Procurement of Funds) The Tokuyama Group recognizes the need to retain a certain level of funds in order to secure the working capital required to finance its business activities, for priority investments in growth fields for the purpose of transforming its business portfolio and capital investments for the purpose of contributing to the mitigation of global warming, such as rationalization, energy saving, and measures to reduce CO2 emissions, as well as to promote strategic investments. While the principal method of procuring these funds is to accumulate cash on hand through the continuous posting of business earnings, the Group will also pursue other avenues. These include borrowing from financial institutions and the issuing of unsecured bonds. Furthermore, the Tokuyama Group’s intended investment amount for the next fiscal year is ¥46.2 billion. Plans are in place to utilize cash on hand and borrowings from financial institutions. (Liquidity) Cash and cash equivalents stood at ¥ 82,496 million as of the end of the fiscal year under review. On this basis, the Tokuyama Group is confident that it maintains more than ample liquidity to promote its business activities. In addition, Tokuyama has executed revolving credit facility, overdraft, and credit liquidation agreements with a financial institution. Accounting for these factors, the Company is more than capable of maintain a certain level of liquidity should any impediment arise. To secure liquidity funds in preparation for unforeseen circumstances, we will also set up commitment lines on an as needed basis. 14(3) Achievement of Medium-Term Management Plan 2025 The growth business net sales growth rate (CAGR) was 19.9%, which exceeded the target of 10%. This resulted from increases in sales volumes and in the selling prices of semiconductor-related products in the electronic materials segment as well as an increase in overseas shipments of life science segment products such as dental materials. ROE was 13.2%, maintaining a level on par with that of the previous consolidated fiscal year. (4) Basic Policy for Profit Distribution and Dividends for Fiscal 2021 and 2022 As far as the distribution of profits is concerned, Tokuyama’s basic policy is the ensure the continuous and stable payment of dividends to its shareholders. Our basic policy remains the taking into consideration of business performance, dividend payout ratio, our medium- to long-term business plans and other factors. Meanwhile, the Company will apply internal reserves to investment and lending as well as capital expenditures with the aim of further enhancing its corporate value. the basic policy mentioned above. In fiscal 2021, the Company expects to pay out a year-end dividend of ¥35 per share in line with As far as dividends for the next period are concerned, Tokuyama plans to undertake the payment of an interim and year-end dividend of ¥35 per share respectively based on the assumptions outlined in “<2> Outlook for fiscal 2022 of (1) Analysis of Operating Results.” 15 2. Quarterly Consolidated Financial Statements (1) Quarterly Consolidated Balance Sheets3/31/2021(Millions of yen)3/31/2022Assets　Current assets　　Cash and deposits　　Notes and accounts receivable – trade　　Notes receivable – trade　　Accounts receivable – trade　　Lease receivables　　Merchandise and finished goods　　Work in process　　Raw materials and supplies　　Other　　Allowance for doubtful accounts　　Total current assets　Non-current assets　　Property, plant and equipment　　　Buildings and structures　　　　Accumulated depreciation　　　　Buildings and structures, net　　　Machinery, equipment and vehicles　　　　Accumulated depreciation　　　　Machinery, equipment and vehicles, net　　　Tools, furniture and fixtures　　　　Accumulated depreciation　　　　Tools, furniture and fixtures, net　　　Land　　　Leased assets　　　　Accumulated depreciation　　　　Leased assets, net　　　Construction in progress　　　Total property, plant and equipment　　Intangible assets　　　Goodwill　　　Leased assets　　　Other　　　Total intangible assets　　Investments and other assets　　　Investment securities　　　Long-term loans receivable　　　Deferred tax assets　　　Retirement benefit asset　　　Other　　　Allowance for doubtful accounts　　　Total investments and other assets　　Total non-current assets　Total assets83,68170,901－－2514,67410,99513,9305,666(115)199,760105,028(76,427)28,601459,039(413,493)45,54522,827(19,995)2,83131,9036,900(2,431)4,46910,674124,02586431,7511,88227,1712,09416,40710,6604,854(61)61,126187,034386,79483,116－7,21270,9891119,19414,26422,2656,968(72)223,950108,926(78,815)30,111475,226(424,410)50,81523,356(20,368)2,98732,1128,682(3,302)5,37918,195139,60268252,5882,68228,2552,09421,11110,4825,077(46)66,974209,259433,21016Liabilities　Current liabilities　　Notes and accounts payable – trade　　Short-term borrowings　　Current portion of long-term borrowings　　Lease liabilities　　Income taxes payable　　Provision for bonuses　　Provision for share awards　　Provision for repairs　　Provision for decommissioning and removal　　Provision for product warranties　　Provision for loss on compensation for damage　　Provision for environmental measures　　Provision for loss on disaster　　Provision for restructuring　　Other　　Total current liabilities　Non-current liabilities　　Bonds payable　　Long-term borrowings　　Lease liabilities　　Deferred tax liabilities　　Provision for retirement benefits for directors (and other officers)　　Provision for share awards　　Provision for repairs　　Provision for decommissioning and removal　　Allowance for loss on compensation for building materials　　Provision for environmental measures　　Retirement benefit liability　　Asset retirement obligations　　Other　　Total non-current liabilities　Total liabilitiesNet assets　Shareholders’ equity　　Share capital　　Capital surplus　　Retained earnings　　Treasury shares　　Total shareholders’ equity　Accumulated other comprehensive income　　Valuation difference on available-for-sale securities　　Deferred gains or losses on hedges　　Foreign currency translation adjustment　　Remeasurements of defined benefit plans　　Total accumulated other comprehensive income　Non-controlling interests　Total net assetsTotal liabilities and net assets3/31/2021(Millions of yen)3/31/202239,5471,8508,8991,2042,3753,057334,8841,100951224017－20,07983,308－82,8123,671247201－1,3401,0281241371,991566,61398,224181,53310,00023,455157,332(349)190,4383,274(19)2,1652,7028,1226,700205,261386,79449,05546320,8231,2252,1573,462－5,4099087310814－4718,587102,33715,00067,9513,754248194331,181874881182,081576,37097,954200,29210,00023,453180,534(414)213,5733,587(8)4,8492,50510,9328,411232,917433,21017 (2) Quarterly Consolidated Statements of IncomeFY2020(Millions of yen)FY2021Net salesCost of salesGross profitSelling, general and administrative expenses　Selling expenses　General and administrative expenses　Total selling, general and administrative expensesOperating profitNon-operating income　Interest income　Dividend income　Share of profit of entities accounted for using equity method　Foreign exchange gains　Equipment sale income　Other　Total non-operating incomeNon-operating expenses　Interest expenses　Provision for decommissioning and removals　Equipment cost of sales　Other　Total non-operating expensesOrdinary profitExtraordinary income　Gain on sale of non-current assets　Gain on sale of investment securities　Gain on sale of shares of subsidiaries and associates　Subsidy income　Gain on insurance claims　Compensation for damage income　Gain on sales of patent right and other　Gain on liquidation of subsidiaries and associates　Gain on step acquisitions　Other　Total extraordinary incomeExtraordinary losses　Loss on sale of non-current assets　Impairment losses　Loss on disaster　Loss on tax purpose reduction entry of non-current assets　Loss on disposal of non-current assets　Provision for decommissioning and removals　Other　Total extraordinary lossesProfit before income taxesIncome taxes – currentIncome taxes – deferredTotal income taxesProfitProfit attributable to non-controlling interestsProfit attributable to owners of parent302,407207,25495,15240,51023,71964,23030,921943959493205752,8365,1721,5247505622,4595,29730,7969877746155203－1,478197125963,180282524338308172933,01730,9594,3361,3025,63925,32078524,534293,830198,41795,41244,85426,01770,87224,5391395021,0431,000－4,2086,8941,382558－3,6375,57825,855474161－203362,218－－－353,129143157115820－2241,33427,6494,306(4,831)(525)28,17517428,00018 (3) Quarterly Consolidated Statements of Comprehensive IncomeFY2020(Millions of yen)FY2021ProfitOther comprehensive income　Valuation difference on available-for-sale securities　Deferred gains or losses on hedges　Foreign currency translation adjustment　Remeasurements of defined benefit plans, net of tax　Share of other comprehensive income of entities accounted for using　 equity method　Total other comprehensive incomeComprehensive incomeComprehensive income attributable to　Comprehensive income attributable to owners of parent　Comprehensive income attributable to non-controlling interests25,3202,968161,480694435,20330,52429,67085328,175317102,805△199512,98531,16030,81434619 (4) Consolidated Statements of Cash FlowsCash flows from operating activities　Profit before income taxes　Depreciation　Increase (decrease) in provisions　Increase (decrease) in retirement benefit liability　Decrease (increase) in retirement benefit asset　Interest and dividend income　Foreign exchange losses (gains)　Loss (gain) on sale of property, plant and equipment　Loss (gain) on sale of investment securities　Loss (gain) on sale of shares of subsidiaries and associates　Share of loss (profit) of entities accounted for using equity method　Subsidy income　Interest expenses　Loss on tax purpose reduction entry of non-current assets　Impairment losses　Loss (gain) on disposal of non-current assets　Gain on insurance claims　Gain on sales of patent right and other　Gain on liquidation of subsidiaries and associates　Loss (gain) on step acquisitions　Compensation for damage income　Decrease (increase) in trade receivables　Decrease (increase) in inventories　Decrease (increase) in other current assets　Increase (decrease) in trade payables　Increase (decrease) in other current liabilities　Other, net　Subtotal　Interest and dividends received　Interest paid　Proceeds from insurance income　Compensation for damage received　Compensation paid for damage　Income taxes refund (paid)　Net cash provided by (used in) operating activitiesFY2020(Millions of yen)FY202130,95917,0031,795(129)(69)(490)10(96)(77)(746)(949)(155)1,5243825830(203)(1,478)(197)(125)－(2,124)2,283(914)(533)1,19031948,454915(1,530)257－(31)(4,750)43,31427,64919,7161,451102(121)(641)(458)(460)(161)－(1,043)(203)1,3821153820(36)－－－(2,218)(6,796)(15,704)(1,207)8,538(1,928)(251)28,5471,174(1,386)362,218(117)(4,486)25,98620Cash flows from investing activities　Payments into time deposits　Proceeds from withdrawal of time deposits　Purchase of property, plant and equipment　Proceeds from sale of property, plant and equipment　Purchase of investment securities　Proceeds from sale of investment securities　Proceeds from sale of shares of subsidiaries resulting in change in scope of consolidation　Long-term loan advances　Proceeds from collection of long-term loans receivable　Subsidies received　Gain on sales of patent right and other　Other, net　Net cash provided by (used in) investing activitiesCash flows from financing activities　Increase (decrease) in short-term borrowings　Proceeds from long-term borrowings　Repayments of long-term borrowings　Proceeds from issuance of bonds　Proceeds from issuance of shares　Dividends paid　Dividends paid to non-controlling interests　Decrease (increase) in treasury shares　Other, net　Net cash provided by (used in) financing activitiesEffect of exchange rate change on cash and cash equivalentsNet increase (decrease) in cash and cash equivalentsCash and cash equivalents at beginning of periodIncrease/decrease in cash and cash equivalents due to changes in the accounting period of consolidated subsidiariesCash and cash equivalents at end of periodFY2020(Millions of yen)FY2021(106)240(23,800)1,108(251)1333,356(29)1801551,489(1,752)(19,276)(1,490)187(15,857)－1,303(4,861)(239)(40)(1,531)(22,530)6232,13180,918－83,050(259)275(31,887)713(428)547－(201)187203－(2,948)(33,797)(1,787)6,218(9,150)14,9261,514(5,034)(158)(101)(1,307)5,1181,267(1,424)83,05087082,49621(5) Notes on Consolidated Financial Statements (Going Concern Assumption) Not applicable. Not applicable. (Changes in significant subsidiaries during this period) (Changes in accounting policy) (Application of Accounting Standard for Revenue Recognition) The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020) and other related standards from the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, and has decided to recognize revenue at the amount expected to be received in exchange for the promised goods or services when control of the goods or services is transferred to the customer. The main change due to the adoption of the Accounting Standard for Revenue Recognition is the revenue recognition for agent transactions. The application of the Accounting Standard for Revenue Recognition, etc. is subject to the transitional treatment provided for in the proviso of Paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of the retrospective application, assuming the new accounting policy had been applied to periods prior to the beginning of the first quarter ended June 30, 2021 was added to or subtracted from the beginning balance of retained earnings of the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, and thus the new accounting policy was applied from the beginning balance; provided, however, that the new accounting policy was not retrospectively applied to contracts where recognitions of nearly all the revenue amounts for periods prior to the beginning of the first quarter ended June 30, 2021 were subject to the previous treatment, by applying the method provided for in Paragraph 86 of the Accounting Standard for Revenue Recognition. As a result, for the fiscal year ending March 31, 2022, net sales decreased by ¥ 46,530 million and cost of sales decreased by ¥ 46,530 million. In addition, there was no impact on operating profit, ordinary profit, profit before income taxes, and retained earnings at the beginning of the fiscal year ending March 31, 2022. 22Due to the application of Accounting Standard for Revenue Recognition, “Notes and accounts receivable – trade” which were included in “Current assets” in the consolidated balance sheets for the previous fiscal year, are divided into “Notes receivable – trade” and “accounts receivable – trade” from the first quarter ended June 30, 2021. In accordance with transitional treatment stipulated in Article 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been restated in accordance with the new approach to presentation. (Application of Accounting Standard for Fair Value Measurement) The Company has applied the Accounting Standard for Fair Value Measurement (ASBJ Corporate Accounting Standard No. 30, July 4, 2019) from the beginning of the first quarter ended June 30, 2021, and the new accounting policies set forth by the Accounting Standard for Fair Value Measurement will be applied in the future in accordance with the transitional treatment set forth in Paragraph 19 of the Accounting Standard for fair Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Corporate Accounting Standard No. 10, July 4, 2019). There is no effect on quarterly consolidated statements. (Additional Information) (Application of tax effect accounting associated with the transition from the consolidated taxation system to the group tax sharing system) With regard to the transition to the group tax sharing system established under the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 8 of 2020) and the items for which the nonconsolidated taxation system was revised in line with the transition to the group tax sharing system, pursuant to Paragraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ PITF No. 39, issued on March 31, 2020), the Company and certain domestic consolidated subsidiaries did not apply the provision of Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, issued on February 16, 2018), and the amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the tax laws before the revision. 23“Life & Amenity.” Reportable segment Chemicals (6) Segment information <1> Summary of reportable segments The reportable segments of the Tokuyama Group are defined as individual units, where separate financial information is available and which are subject to regular review by the Board of Directors of the Company to evaluate their results and decide the allocation of management resources. The Company has business divisions by product group, and the Tokuyama Group conducts business operations through each business division devising its comprehensive product strategy for domestic and overseas markets. The Tokuyama Group is, therefore, composed of segments by product group based on business divisions, and has four reportable segments, “Chemicals,” “Specialty Products,” “Cement,” and Main products and services of each reportable segment are as follows: Main products and services Caustic soda, soda ash, calcium chloride, sodium silicate, vinyl chloride monomer, polyvinyl chloride resin, propylene oxide, chlorinated solvents, Cement Cement, ready-mixed concrete, cement-type stabilizer, and resource Electronic Materials Polycrystalline silicon, fumed silica, tetrachlorosilane, aluminum nitride, high-purity chemicals for electronics manufacturing, photoresist developer Life Science Medical diagnosis systems, dental materials and equipment, pharmaceutical ingredients and intermediates, plastic lens-related materials for glasses and Eco Business Waste gypsum board recycling, ion exchange membranes and plastic and hydrogen recycling business and isopropyl alcohol microporous film window sashes (Information on changes in reportable segments) Effective from the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, the Company has reviewed our business segment and changed them to six segments: Chemicals, Cement, Electronics Materials, Life Science, Eco Business and Others. The segment information for the third quarter of the consolidated accounting period for the fiscal year ending March 31, 2021 is disclosed based on the reporting segment classification after this change. 24The Company has applied the Accounting Standard for Revenue Recognition, etc. and changed the method of accounting for revenue recognition from the beginning of the first quarter ended June 30, 2021 as described in above “Changes in accounting policy.” Therefore, the Company has similarly changed the measuring method of segment profit or loss. As a result of this change, net sales in the Chemicals, Cement, Electronics Materials, Life Science, Eco Business and Others segments decreased by ¥ 1,389 million, ¥ 43,642 million, ¥ 228 million, ¥ 10 million, ¥ 742 million and ¥ 24,229 million, respectively, compared with the previous method for the fiscal year ending March 31, 2022. The total decrease in net sales after taking into account intersegment eliminations and corporate expenses is ¥ 46,530 million. There is no effect on segment profit (loss). 25<2> Information on sales, income, assets and other items by reportable segment Fiscal 2020 (April 1, 2020 –March 31, 2021) (Millions of yen) Figures in quarterly consolidated income statement*3 302,407 – Chemicals Cement Electronic Materials Life Science Eco Business Others*1 Total Adjustment*2 Reportable segments Sales Sales to customers Inter-segment sales/transfer 80,555 88,969 49,728 27,408 9,076 46,668 302,407 829 623 12,125 1,254 504 15,714 31,053 (31,053) – 81,385 13,585 49,227 2,651 3,277 89,593 4,454 56,411 3,461 5,154 61,853 7,104 69,547 3,706 6,472 Total Segment profit (loss) Segment assets Other items Depreciation expenses*4 Increase in tangible and intangible fixed assets*5 *1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, the segment includes overseas sales companies, a distribution company, a real estate business, etc. *2 Adjustment is as follows: (1) The segment profit adjustment amount consists mainly of basic R&D expenses that are not related to specific (31,053) (3,030) 113,113 1,167 3,456 333,460 33,952 273,680 15,836 23,624 9,581 (368) 10,655 481 758 28,662 3,498 34,947 1,312 1,930 62,383 5,677 52,892 4,222 6,030 302,407 30,921 386,794 17,003 27,080 (2) Included in the segment assets adjustment amount are corporate assets that are not allocated to specific reportable segments. reportable segments (¥ 142,698 million). *3 With regard to segment profit (loss), operating profit in the quarterly consolidated statement of profit has been calculated by making an adjustment to the sum total of the reportable segments’ profit and the “Others” segment’s profit. *4 Included in depreciation expenses is the long-term prepaid expense depreciation amount. *5 Included in increase in tangible and intangible fixed assets is the long-term prepaid expense increase amount. 2. Information on impairment loss on fixed assets and goodwill by reported segment (Significant impairment loss on fixed assets) Not applicable. 26Fiscal 2021 (April 1, 2021 –March 31, 2022) Reportable segments Chemicals Cement Electronic Materials Life Science Eco Business Others*1 Total Adjustment*2(Millions of yen) Figures in quarterly consolidated income statement*3 Sales Sales to customers Inter-segment sales/transfer Total Segment profit (loss) Segment assets Other items Depreciation expenses*4 Increase in tangible and intangible fixed assets*5 101,093 49,679 74,332 33,439 9,935 25,349 293,830 – 293,830 388 687 664 125 370 10,953 13,188 (13,188) – 101,482 14,225 59,472 50,366 (1,912) 58,670 74,996 7,232 91,008 33,564 6,036 39,294 10,305 (468) 12,364 36,302 3,851 60,593 307,018 28,964 321,403 (13,188) (△4,425)111,807 293,830 24,539 433,210 2,969 3,953 4,952 1,361 4,177 18,020 1,696 19,716 4,891 4,806 14,348 1,657 5,238 31,865 3,190 35,056 605 924 *1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.*2 Adjustment is as follows:(1) The segment profit adjustment amount consists mainly of basic R&D expenses that are not related to specific(2) Included in the segment assets adjustment amount are corporate assets that are not allocated to specificreportable segments.reportable segments (¥ 149,158 million).*3 With regard to segment profit (loss), operating profit in the quarterly consolidated statement of profit has beencalculated by making an adjustment to the sum total of the reportable segments’ profit and the “Others” segment’sprofit.*4 Included in depreciation expenses is the long-term prepaid expense depreciation amount.*5 Included in increase in tangible and intangible fixed assets is the long-t