Summary of Consolidated Financial Statements for the Second Quarter Fiscal 2020 (JPGAAP)
October 28, 2020
Tokuyama Corporation
Stock exchange listings:
Tokyo(URL https://www.tokuyama.co.jp/eng/)
Local Code :4043
Representative:
Hiroshi Yokota, President and Representative Director
Contact:
Taro Kobayashi, General Manager, Corporate Communications & Investor Relations Dept.
+81-3-5207-2552
Scheduled date of dividends payout :December 1, 2020
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 second quarter ended Sept. 30, 2020 (Apr. 1, 2020 – Sept. 30, 2020)(1) Performance

Note: All amounts are rounded down to the nearest million yen.
Net sales
Year-on(millions ofyear change
yen)
[%]

Operating profit
Year-on(millions ofyear change
yen)
[%]

Ordinary profit
Year-on(millions ofyear change
yen)
[%]

Second Quarter Fiscal 2020
143,289(6.2)
12,941(11.4)
12,498(8.4)
Second Quarter Fiscal 2019
152,749
0.0
14,612(14.1)
13,643(11.8)(Note) Comprehensive income: 2nd Q FY20: 11,696 million yen [25.0%] 2nd Q FY19: 9,359 million yen [(25.9) %]Profit attributable toowners of parent
Year-on-year(millions of yen)change [%]Second Quarter Fiscal 2020
Second Quarter Fiscal 2019

Basic earnings per
share

Diluted earnings
per share

(yen)

(yen)

143.90149.75

Net assets per
share
(yen)

2,560.17
2,431.21

9,994
10,400(3.9)(19.0)

Total assets

Net assets(millions of yen)(millions of yen)

Shareholders’Equity ratio(%)

379,306
383,447

190,371
180,42946.9
44.0(2) Consolidated financial position

September 30, 2020
March 31, 2020
(Reference) Shareholders' equity:

Sept. 30, 2020: 177,821 million yen

Mar. 31, 2020: 168,861 million yen

2. Dividends
1st quarter（Period）(yen)

Fiscal 2019, ended
Mar 31, 2020
Fiscal 2020, ending
Mar 31, 2021
Fiscal 2020
（Forecast）

Annual dividends per share
2nd quarter 3rd quarter
Year-end
(yen)

-

35.00

-

35.00

(yen)

Total

(yen)

(yen)

-

35.00

70.00

-

35.00

70.00

(Note) Revision of the latest dividends forecast: Yes* The Company announced the release, “Notice concerning Revision of Performance Forecast and Dividend Forecast for Fiscal
2020,” on Oct. 28, 2020.

3. Consolidated performance forecast for fiscal 2020 (April 1, 2020 - March 31, 2021)(% indicates the rate of change over the corresponding previous periods respectively)
attributable to Basic earnings
Net sales
Operating profit Ordinary profit Profit
owners of parent
per share

Fiscal 2020

(millions ofyen)

300,000

[%]

(5.1)

(millions of
yen)

[%]

28,000 (18.3)(millions of
yen)

[%]

28,000 (14.7)(millions ofyen)

22,000

[%]

10.3

(yen)

316.75(Note) Revision of the latest consolidated performance forecast: Yes* The Company announced the release, “Notice concerning Revision of Performance Forecast and Dividend Forecast for Fiscal
2020,” on Oct. 28, 2020.
1

*Notes(1) Changes in significant subsidiaries during this period: Yes
Addition to the scope of consolidation: Reduction from the scope of consolidation: 1 (Company Name: Tianjin Tokuyama Plastics Co., Ltd.)(Note) For more details, please refer to “2. Quarterly Consolidated Financial Statements and (5) Notes on
Quarterly Consolidated Financial Statements (Changes in significant subsidiaries during this period)” on page
14 of the Accompanying Materials to this Summary of Quarterly Consolidated Financial Statement.
(2) Application of accounting methods specific to the preparation of the quarterly consolidated
financial statements: Yes(Note) For more details, please refer to “2. Quarterly Consolidated Financial Statements and (5) Notes on
Quarterly Consolidated Financial Statements (Application of accounting methods specific to the preparation of
the quarterly consolidated financial statements)” on page 14 of the Accompanying Materials to this Summaryof Quarterly Consolidated Financial Statement.
(3) Changes of accounting policies, changes in accounting estimates, and retrospective restatements
i. Changes of accounting policies by revision of accounting standards:
ii. Changes of accounting policies other than the above:iii. Changes in accounting estimates:
iv. Retrospective restatements:(4) Number of shares issued (in common stock)
Number of shares issued at end of period 2nd Quarteri.
(including treasury stock):
Fiscal 2020:
2nd Quarterii. Number of treasury stock at end of period:
Fiscal 2020:
2nd Quarteriii. Average number of shares over period:
Fiscal 2020:

No
No
No
No

69,934,375

Fiscal 2019:69,934,375

477,506

Fiscal 2019:478,862

69,456,302

2nd Quarter
Fiscal 2019:69,454,574(Note) Notice on the implementation of quarterly review proceduresThis summary of quarterly consolidated financial statements is not subject to quarterly review procedures in linewith the Financial Instruments and Exchange Act. At the point of disclosure of this summary of quarterly
consolidated financial statements, the quarterly consolidated financial statements review procedures in line with the
Financial Instruments and Exchange Act are underway.
(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.

2

Contents for Accompanying Materials
1. Qualitative information on consolidated results for this quarter…………………

P. 2(1) Explanation concerning business results…………………

P. 2(2) Explanation concerning financial position…………………

P. 6…………………

P. 7

2. Quarterly Consolidated Financial Statements…………………

P. 8(1) Quarterly Consolidated Balance Sheets…………………

P. 8(2) Quarterly Consolidated Statements of Income…………………

P. 10(3) Quarterly Consolidated Statements of Comprehensive Income…………………

P. 11(4) Consolidated Statements of Cash Flows…………………

P. 12(5) Notes on Quarterly Consolidated Financial Statements…………………

P. 14(6) Segment Information…………………

P. 15(7) Material Subsequent Event…………………

P. 16(3) Explanation concerning information related to future
prediction such as consolidated performance forecast

11. Qualitative information on consolidated results for this quarter(1) Explanation concerning business results
Consolidated results for the second quarter fiscal 2020 (April 1, 2020 - September 30, 2020) aresummarized as follows:(Unit: Millions of yen)
OperatingprofitNet sales

Ordinary profit

Profitattributable toowners ofparentSecond Quarter Fiscal 2020

143,289

12,941

12,498

9,994

Second Quarter Fiscal 2019

152,749

14,612

13,643

10,400(6.2)(11.4)

(8.4)

(3.9)

Rate of change (%)

Net sales
Consolidated net sales decreased 6.2%, or ¥9,460 million compared with the corresponding
period of the previous year, to ¥143,289 million. Despite firm sales of semiconductor-related
products, this decrease was largely attributable to the impact of the novel coronavirus(COVID-19) pandemic, which triggered the drop in sales volumes of caustic soda in Japan, weak
petrochemical product sales prices, and lower export volumes of dental materials to Europe andthe United States.
Cost of sales
Cost of sales decreased 7.0%, or ¥7,484 million compared with the corresponding period of theprevious year, to ¥98,777 million. This was due mainly to a downturn in raw material and fuelcosts.
SG&A expenses
SG&A expenses decreased 1.0%, or ¥305 million compared with the corresponding period of
the previous year, to ¥31,570 million. While R&D and other expenses increased, this decrease
largely reflected the drop in advertising expenses and such operating costs as travel expenses dueto the COVID-19 pandemic.

2Operating profit
Operating profit decreased 11.4 %, or ¥1,670 million compared with the corresponding periodof the previous consolidated fiscal year, to ¥12,941 million. Despite lower raw material and fuelcosts, this decrease in operating profit was mainly due to the impact of COVID-19, which
triggered a drop in sales volumes of caustic soda in Japan, and weak petrochemical product sales
prices.
Non-operating income/expenses, Ordinary profit
Non-operating income/expenses improved by ¥525 million compared with the corresponding
period of the previous consolidated fiscal year.
As a result of the above, ordinary profit decreased 8.4%, or ¥1,145 million compared with thecorresponding period of the previous consolidated fiscal year, to ¥12,498 million.
Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable toowners of parent
Extraordinary income/losses deteriorated by ¥148 million compared with the corresponding
period of the previous consolidated fiscal year.
As a result of the above, profit before income taxes decreased 9.6%, or ¥1,293 million comparedwith the corresponding period of the previous consolidated fiscal year, to ¥12,117 million.
Profit after deducting income taxes calculated in an appropriate way decreased 3.5%, or ¥376
million compared with the corresponding period of the previous consolidated fiscal year, to¥10,340 million.
Profit attributable to owners of parent decreased 3.9%, or ¥406 million compared with thecorresponding period of the previous consolidated fiscal year, to ¥9,994 million.

3

(Operating results by segment)
Sales(Unit: Millions of yen)
Total

Adjustment

Figures inquarterly
consolidated
profitstatement

27,701

159,954(16,664)

143,289

27,72232,261

173,655(20,905)

152,749(10.0)(14.1)

(7.9)

-

(6.2)

Adjustment

Figures inquarterly
consolidated
profitstatement

Reportable segment

Second Quarter
Fiscal 2020
Second Quarter
Fiscal 2019
Rate of change (%)

Chemicals

Specialty
Products

CementLife &
Amenity

38,527

26,052

42,72624,945

46,34824,60342,719(16.9)

5.9

0.0

Operating profit

Others(Unit: Millions of yen)
Reportable segment

Second Quarter
Fiscal 2020
Second Quarter
Fiscal 2019
Rate of change (%)

OthersTotal

Chemicals

Specialty
Products

CementLife &
Amenity

5,386

2,746

2,335

823

2,873

14,164(1,222)

12,941

7,511

2,813

1,185

1,562

2,462

15,535(923)

14,612(28.3)

(2.4)

96.9

(47.3)

16.7

(8.8)

-

(11.4)(Note) Sales and operating profit in each segment include inter-segment transactions.

Chemicals
Caustic soda earnings declined. This downturn in earnings was largely due to the drop in sales
volumes in Japan owing to the spread of COVID-19 and a deterioration in overseas market
conditions.
Vinyl chloride monomer (VCM) earnings decreased. Despite a downturn in manufacturing costs
as a result of the drop in domestic naphtha prices, this decrease in earnings was mainly
attributable to COVID-19, which placed downward pressure on overseas market conditions.
Results in vinyl chloride resin were essentially in line with the corresponding period of theprevious consolidated fiscal year. This largely reflected robust demand in overseas market and theCompany’s ability to maintain the spread between raw material costs and selling prices.
Soda ash earnings declined. This downturn in earnings was largely due to the drop in sales
volumes in Japan owing to the spread of COVID-19.
As a result of the above, segment net sales decreased 16.9% compared with the corresponding
period of the previous consolidated fiscal year, to ¥38,527 million and operating profit decreased
28.3% to ¥5,386 million. The segment reported lower earnings on lower sales.

4Specialty Products
Semiconductor-grade polycrystalline silicon results were also in line with the corresponding
period of the previous consolidated fiscal year owing to firm sales on the back of theintroduction of 5G and an increase in remote work.
Earnings from high-purity chemicals for electronic manufacturing increased. This was due to anincrease in the volume mainly overseas.
Earnings of fumed silica decreased largely due to the drop in sales volumes owing to the spreadof COVID-19.
As a result of the above, segment net sales increased 5.9% compared with the corresponding
period of the previous consolidated fiscal year, to ¥26,052 million and operating profit decreased
2.4% to ¥2,746 million. The segment reported lower earnings on higher sales.
CementCement earnings increased. This upswing in earnings reflected the limited impact of COVID-19
on domestic shipments and successful steps to reduce manufacturing costs on the back of adecline in raw material prices.
As a result of the above, segment net sales increased 0.0% compared with the corresponding
period of the previous consolidated fiscal year, to ¥42,726 million and operating profit increased
96.9% to ¥2,335 million. The segment reported higher earnings on higher sales.
Life & Amenity
Earnings from plastic lens-related materials decreased as a result of COVID-19, which pushed
down export volumes of photochromic materials for eyeglass lenses to Europe and the UnitedStates.
With regard to microporous film, earnings increased as robust demand for sanitary articles
including disposable diapers.
Earnings from polyolefin film increased. While sales volumes were weak, this largely reflected theCompany’s ability to improve the spread between raw material costs and selling prices.
Impacted by the spread of COVID-19, export volumes of dental materials to Europe and theUnited States also declined resulting in a drop in earnings.
As a result of the above, segment net sales decreased 10.0% compared with the corresponding
period of the previous consolidated fiscal year, to ¥24,945 million and operating profit decreased
47.3% to ¥823 million. The segment reported lower earnings on lower sales.

5(2) Explanation concerning financial position(Status of assets, liabilities and net assets)
As of September 30, 2020, total assets amounted to ¥ 379,306 million, an decrease of ¥ 4,140
million compared with those as of March 31, 2020.
This decrease primarily reflects the decrease of notes and accounts receivable - trade of ¥9,658
million, despite the increase of investment securities due to valuation of investment securities,
other current assets, merchandise and finished goods, and work in process of ¥2,372, ¥1,438,¥800, and ¥769 million, respectively.
Total liabilities amounted to ¥ 188,935 million, down ¥ 14,082 million compared with those asof March 31, 2020.
The principal factors are a decrease in long-term loans payable and current portion of long-termloans payable, other current liabilities mainly due to accounts payable – facilities paid, and notes
and accounts payable-trade of ¥6,171 million, ¥4,846 million, and ¥3,340 million, respectively.
Net assets totaled ¥190,371 million, an increase of ¥9,941 million compared with those as ofMarch 31, 2020.
This mainly reflected the increase of retained earnings primarily due to posting profit attributableand valuation difference on available-for-sale securities of ¥7,560 million and ¥1,352 million
respectively.
(Status of cash flows)
As of September 30, 2020, cash and cash equivalents were ¥81,406 million, an increase of ¥487
million compared with those as of March 31, 2020.
Net cash provided by operating activities totaled ¥20,702 million, an decrease of ¥8,554 million
compared with the corresponding period of the previous year.
Principal items included profit before income taxes of ¥12,117 million , decrease of accounts
receivable of 9,725 million and depreciation of ¥8,180 million.
Net cash used in investing activities totaled ¥11,237 million, an increase of ¥508 million
compared with the corresponding period of the previous year.
Major contributory factor was payments for purchases of property, plant and equipment of¥11,491 million.
Net cash used in financing activities amounted to ¥9,016 million, an increase of ¥467 million
compared with the corresponding period of the previous year.
This was primarily attributed to payments for repayment of long-term loans payable of ¥6,175
million and dividends paid of ¥ 2,429 million.

6(3) Explanation concerning information related to future prediction such as
consolidated performance forecast
Based on the current performance trend and other factors, the Company has revised theperformance forecast and dividend forecast, announced on May 15, 2020. For further details,
please see the Company’s news release, “Notice concerning Revision of Performance Forecast
and Dividend Forecast for Fiscal 2020,” dated October 28, 2020.
The performance forecast has been prepared on the basis of information available at this pointand certain assumptions which are judged to be rational, and may be substantially different fromthe actual performance because of various factors that may arise from now on.

7

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
9/30/2020

3/31/2020
AssetsCurrent assets
Cash and deposits
Notes and 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 assets

8

81,52472,92934
18,506
10,051
16,0884,823(108)
203,849

82,032
63,27032
19,306
10,821
15,6196,262(104)
197,240

108,636(78,109)
30,526
465,761(420,631)
45,12922,488(20,024)
2,463
33,3635,011(2,370)2,641
9,067
123,192

109,426(78,270)
31,155465,902(421,907)
43,99422,804(20,247)
2,557
32,775
5,596(2,587)
3,008
9,485
122,976

3
59
1,594
1,657

－
49
1,604
1,653

19,385
2,302
19,164
9,569
4,382
(56)
54,747
179,597
383,447

21,757
2,237
18,839
9,863
4,798
(62)
57,435
182,065
379,306

3/31/2020
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Lease obligations
Income taxes payable
Provision for bonuses
Provision for share-based remuneration
Provision for repairs
Provision for decommissioning and removal
Provision for product warranties
Provision for loss on compensation for damage
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Provision for share-based remuneration
Provision for repairs
Provision for decommissioning and removal
Allowance for loss on compensation for building materials
Provision for loss on compensation for damage
Provision for environmental measures
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net 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 assets
Total liabilities and net assets
9(Millions of yen)
9/30/2020

42,795
3,082
16,106
870
2,896
3,175
－
5,159
439
84
84
20,545
95,24139,4542,886
16,468
980
2,034
3,091
103
4,643
837
32
111
15,69986,344

94,255
2,028
204
239
86
944
529
158
－
196
2,277
6
6,848
107,775
203,01787,721
2,252
243
214
－
1,490
1,267
142
19
159
2,024
56
6,998
102,590
188,935

10,00020,018
137,665(1,809)165,874

10,00020,072
145,226(1,803)
173,495

332
(35)
703
1,986
2,986
11,568
180,429
383,447

1,684
(27)
675
1,993
4,326
12,549190,371379,306

(2) Quarterly Consolidated Statements of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Outsourcing service income
Rental income from non-current assets
Other
Total non-operating income
Non-operating expenses
Interest expenses
Fiduciary obligation expenses
Provision for decommissioning and removals
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Gain on insurance claims
Gain on sales of patent right and other
Gain on liquidation of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Impairment loss
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 losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

10

Q2 FY2019 YTD
152,749
106,261
46,488(Millions of yen)
Q2 FY2020 YTD
143,289
98,77744,512

21,08910,78631,876
14,612

20,116
11,45331,57012,941

90
207
435
483
229
1,119
2,564

48
264
493
482
237
661
2,188

866
507
550
1,609
3,533
13,643

794
468
368
1,000
2,631
12,498

8
2
13
83
－
－
108

38
4
－
－
1,477
197
1,717

16
－
45
1
277
－
－
341
13,4102,693
10,717316
10,400

－
826
99
－
228
862
83
2,098
12,117
1,776
10,340346
9,994

(3) Quarterly Consolidated Statements of Comprehensive Income

ProfitOther 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 income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

11

Q2 FY2019 YTD
10,717(Millions of yen)
Q2 FY2020 YTD
10,340(8)
8(1,085)
(144)

1,344
8
90
7

(127)

(95)

(1,358)
9,359

1,355
11,696

9,057
301

11,334362

(4) Consolidated Statements of Cash Flows(Millions of yen)
Q2 FY2019 YTD Q2 FY2020 YTD
Cash 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 sales of property, plant and equipment
Loss (gain) on sales of investment securities
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 loss
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
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
SubtotalInterest and dividends received
Interest paid
Proceeds from insurance income
Compensation for damage received
Compensation for damage paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Long-term loan advances
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 activities

12

13,410
7,664
476
36
(628)
(297)
347
7
(2)
(435)
(13)
866
1
－
277
(83)
－
－
12,990(266)(1,130)(5,190)(459)(103)
27,467
843
(874)
83
5,865
(832)
(3,296)29,256

12,117
8,180
1,145
(214)
(325)
(313)
53
(38)
(4)
(493)
－
794
－
826
228
－
(1,477)(197)
9,725(1,052)(1,221)(3,383)(1,123)
138
23,365
750
(801)
－
－
－
(2,611)
20,702(51)
171(10,014)
52
(9)
3
(110)
(2)
91
13
－
(871)
(10,728)(103)
200(11,491)
157
(241)
10
－
(27)
89
－
720
(550)
(11,237)(Millions of yen)
Q2 FY2019 YTD Q2 FY2020 YTD
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
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 activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

13(1,494)
1,503(6,291)－(1,735)
(129)
2
(405)
(8,549)(638)
9,339
67,991
77,331(276)
75(6,175)821(2,429)
(122)
(0)
(909)
(9,016)39
487
80,91881,406

(5) Notes on Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Changes in significant subsidiaries during this period)
The Company’s subsidiary, Tianjin Tokuyama Plastics Co., Ltd., has been removed from theCompany’s consolidation during the second quarter consolidated accounting period for the
consolidated fiscal year ending March 31, 2021 due to completion of liquidation as of July 17 2020.
(Application of accounting methods specific to the preparation of the quarterly consolidated
financial statements)(Calculation of Tax Expense)
The Company rationally estimated the effective tax rate after the application of accounting policy
for deferred tax, which was applied to the profit/loss before income tax for the consolidated fiscal
year under review including the second quarter consolidated accounting period for the
consolidated fiscal year ending March 31, 2021, and calculated the tax expense by multiplying theestimated effective tax rate to the profit/loss before income tax. However, if the application ofsaid estimated effective tax rate reduces the rationality of the calculation of tax expense, theCompany applies the effective statutory tax rate.

(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 thenonconsolidated 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 EffectAccounting 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), andthe amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the
tax laws before the revision.

14

(6) Segment information
Second Quarter Fiscal 2019 (April 1, 2019 – September 30, 2019)
1. Information on sales and profit by reportable segment(Millions of yen)

Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment profit

Chemicals

Specialty
Products

CementLife &
Amenity

Others*1

45,802545
46,348
7,511

18,7995,804
24,603
2,813

42,467251
42,7191,185

26,759963
27,722
1,562

18,921
13,34032,261
2,462

Figures inquarterly
Adjustment
consolidated*2
incomestatement*3

Total

152,749
20,905
173,655
15,535(20,905)(20,905)(923)

152,749
152,749
14,612*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 The segment profit adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment and the amount of inter-segment eliminations.
*3 With regard to segment profit, 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.
(Information on amortization of goodwill and unamortized balance by reportable segment)
Not applicable.

Second Quarter Fiscal 2020 (April 1, 2020– September 30, 2020)
1. Information on sales and profit by reportable segment(Millions of yen)

Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment profit

Chemicals

Specialty
Products

CementLife &
Amenity

Others*1

38,127400
38,527
5,386

20,4305,622
26,052
2,746

42,501
225
42,726
2,335

24,354591
24,945823

17,876
9,824
27,701
2,873

Total

143,289
16,664
159,954
14,164

Figures inquarterly
Adjustment
consolidated*2
profitstatement*3(16,664)(16,664)(1,222)*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 The segment profit adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment and the amount of inter-segment eliminations.
*3 With regard to segment profit, 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.
(Information on amortization of goodwill and unamortized balance by reportable segment)
An impairment loss on fixed assets in the amount of ¥745 million is recorded as extraordinary loss in the Life &Amenity segment for the second quarter fiscal 2020.

15

143,289
143,289
12,941

(7) Material Subsequent Event(Simplified share exchange to convert A&T Corporation a wholly owned subsidiary ofTokuyama Corporation)
Tokuyama Corporation (“Tokuyama”) hereby announces that Tokuyama resolved at a meetingof the Thomson’s Board of Directors held on October 28, 2020 regarding a share exchange (the“Share Exchange”) whereby Tokuyama will be a wholly owning parent company of A&T
Corporation (“A&T;” and Tokuyama and A&T, collectively the “Companies”) and A&T will be awholly owned subsidiary of Tokuyama. The Share Exchange is scheduled to become effective on
February 1, 2021.
Tokuyama plans to implement the Share Exchange in the form of a simplified share exchange(kan-i kabushiki kokan) pursuant to the provisions of the main clause of Article 796, Paragraph 2of the Companies Act (Act No. 86 of 2005, as amended; the same applies hereinafter), withoutobtaining approval of its general meeting of shareholders for the Share Exchange Agreement andA&T plans to implement the Share Exchange after the Share Exchange Agreement is approved byresolution of the extraordinary meeting of shareholders of A&T that is scheduled to be held on
December 22, 2020.
Prior to the effective date of the Share Exchange, common stock of A&T (the “A&T Shares”)
are scheduled to be delisted from the JASDAQ (Standard) market of the Tokyo Stock Exchange,
Inc. as of January 28, 2021 (the last trading date of the A&T Shares is scheduled to be January 27,2021).

(1) Purpose of Making A&T a Wholly Owned Subsidiary of Tokuyama through the Share
Exchange
Tokuyama aims to reform its portfolio in order to achieve growth amid the global movetowards the creation of a carbon-free and sustainable society and boost Tokuyama’s health carebusiness in the Life & Amenities segment with A&T at its core. A&T aims to accelerate overseas
operations and bolster cooperation between R&D and manufacturing with proactive support
from Tokuyama. It leads to improvement of the corporate value of both Tokuyama and A&T,
thereby Tokuyama aims to maximize the corporate value and profit of the entire TokuyamaGroup.

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(2) Schedule for the Share Exchange
Date on which execution of the Share Exchange Agreement is resolved at Meetings of Boardof Directors
October 28, 2020

Date on which execution of the Share Exchange Agreement is
resolved at Meetings of Board of Directors (the Companies)
Execution date of the Share Exchange Agreement (theCompanies)
Date of announcement of record date of extraordinary meetingof shareholders (A&T)
Record date of extraordinary meeting of shareholders (A&T)

November 12, 2020 (scheduled)

Date of extraordinary meeting of shareholders (A&T)

December 22, 2020 (scheduled)

Last trading date (A&T)

January 27, 2021 (scheduled)

Delisting date (A&T)

January 28, 2021 (scheduled)

Effective date of the Share Exchange

February 1, 2021 (scheduled)

October 28, 2020
October 28, 2020 (scheduled)(Note) If necessary due to the progress of procedures of the Share Exchange or for any other reasons, theschedule set out above may be changed upon consultation and agreement between the Companies.

(3) Allotment in the Share Exchange
Company name

Tokuyama(wholly owning parent
company in share exchange)

A&T(wholly owned subsidiary inshare exchange)

Ratio of allotment in the Share1
0.68
Exchange
Number of shares to be delivered
Common stock of Tokuyama:
upon the Share Exchange
2,543,952 shares (scheduled)(Note 1) Share allotment ratio
0.68 shares of common stock of Tokuyama (the “Tokuyama Shares”) will be allotted anddelivered in exchange for each share of A&T Shares; provided, however, that no shares will beallotted in the Share Exchange for the A&T Shares held by Tokuyama (2,515,700 shares as of
October 28, 2020). Tokuyama and A&T may consult and agree to change the ratio of allotment in
the Share Exchange (the “Share Exchange Ratio”) described in the table above in the event of any
material changes to the conditions that served as the basis of the calculation.
(Note 2) Number of Tokuyama Shares to be delivered upon the Share Exchange
Upon the Share Exchange, Tokuyama plans to allot and deliver the number of shares ofTokuyama calculated based on the Share Exchange Ratio described in the table above to theshareholders of A&T (excluding Tokuyama) as of the time immediately preceding the time when
Tokuyama acquires all issued shares of A&T (excluding A&T Shares held by Tokuyama; the “BaseTime”) in exchange for A&T Shares held by such shareholders. The Tokuyama Shares to be
allotted and delivered will comprise new shares to be issued by Tokuyama and treasury shares ofTokuyama (385,018 shares as of September 30, 2020).
In accordance with a resolution of the meeting of the Board of Directors that will be held prior
to the day immediately preceding the effective date of the Share Exchange, A&T will cancel all of
its treasury shares it holds at the time immediately preceding the Base Time (including the treasury
shares to be acquired by A&T through the purchase of shares pertaining to the dissenters’ appraisal
right exercised pursuant to the provisions of Article 785, Paragraph 1 of the Companies Act upon
the Share Exchange). The total number of common stock to be allotted and delivered upon the
Share Exchange may be subject to change in the future due to reasons such as the acquisition orcancellation of the treasury shares by A&T.
17

(4) Basis for Calculation of the Allotment Concerning the Share Exchange
In order to ensure the fairness and validity in their decisions of the Share Exchange Ratio, theCompanies decided to have third-party valuation institutions independent of the Companies
calculate the Share Exchange Ratio respectively. Tokuyama appointed Nomura Securities Co., Ltd.
and A&T appointed Mizuho Securities Co., Ltd. as their respective financial advisors andthird-party valuation institutions. Also, Tokuyama appointed Mori Hamada & Matsumoto andA&T appointed Anderson Mori & Tomotsune, as their respective legal advisors.
Each of the Companies engaged in careful review based on the results of the due diligence
conducted by each company with respect to the other company, referring to the calculation results
obtained from each third-party valuation institution, and engaged in negotiations and discussions
while taking into consideration the financial condition, business performance trends, share pricetrends, and other factors related to the other company. As a result, the Companies came to theconclusion that the Share Exchange Ratio is appropriate and contributes to the interests of theirrespective shareholders, and therefore, the Companies agreed to implement the Share Exchangewith the Share Exchange Ratio. Based on resolution at meetings of each of the Company’s Boardof Directors on October 28, 2020, they decided to execute a share exchange agreement.
The Share Exchange Ratio may be subject to change upon consultation and mutual agreement
between the Companies in the case of any material changes to the conditions that served as thebasis of the calculation.
(5) Overview of Accounting Practices
In accordance with “Accounting Standard for Business Combinations” (the AccountingStandards Board of Japan (“ASBJ”) Statement No.21 as of January 16, 2019), and“Implementation Guidance on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Statement No.10 as of January 16, 2019), the Share
Exchange will be treated as a transaction under common control.

18