April 28, 2022

Summary of Fiscal 2021
(The Fiscal Year ended March 31, 2022)
Tokuyama Corporation
1. Summary of performance and other corporate data (consolidated)

Net sales
Operating profit
Ordinary profit
Profit attributable to owners of parent
Basic earnings per share (Unit: yen)
Capital expenditures
Depreciation and amortization
R&D expenses
Financial income and expenses(Unit: Billions of yen, except number of employees)
Fiscal 2021
Fiscal 2020
Changes
2 93 .8
3 02 .4( 8. 5)
2 4 .5
3 0 .9( 6.3)
2 5 .83 0 .7( 4.9)
2 8 .02 4 .5+3.4
3 89 .0 9
3 51 .11+ 3 7 .98
3 3 .32 6 .4+6 .9
1 9 .71 7 .0+2 .7
1 2 .6
1 0 .8
+1 .7
(0.7)
+0 .2
(1.0)

As of March
As of March
Changes31, 2022
31, 2021
Interest-bearing debt
1 09 .2
9 8 .4+1 0 .7
Number of employees
5 ,665
5 ,476+1 89(Note) Due to the application of the Accounting Standard for Revenue Recognition and otherstandards from the beginning of the fiscal 2021, net sales decreased by ¥46.5 billion compared withthe previous accounting method.

12. Net sales and operating profit by business segment (year on year)(Unit: Billions of yen)

FY2021 Results
Operating
Net sales
profitFY2020 Results
Operating
Net sales
profitChanges
Operating
Net sales
profitChemicals

101.4

14.2

81.3

13.5

+20.0

+0.6

Cement

50.3

(1.9)

89.5

4.4

(39.2)(6.3)

Electronic Materials

74.9

7.2

61.8

7.1

+13.1

+0.1

Life Science

33.5

6.0

28.6

3.4

+4.9

+2.5

Eco Business

10.3

(0.4)

9.5

(0.3)

+0.7

(0.1)

Others

36.3

3.8

62.3

5.6

(26.0)

(1.8)

Total

307.0

28.9

333.4

33.9

(26.4)(4.9)

Inter-segment
eliminations andcorporate-wide
expenses(13.1)(4.4)(31.0)

(3.0)

+17.8

(1.3)

Consolidated results

293.8

24.5

302.4

30.9

(8.5)

(6.3)

(Note) Effective from fiscal 2021, the fiscal year ending March 31, 2022, Tokuyama has changed tosix business segments: Chemicals, Cement, Electronics Materials, Life Science, Eco Business, andOthers. The actual results for the fiscal 2021 are shown after having been rearranged into thechanged segments.
(Note) Due to the application of the Accounting Standard for Revenue Recognition and otherstandards, net sales of Chemicals decreased by ¥1.3 billion, Cement by ¥43.6billion, Electronic
Materials by ¥0.2 billion, Life Science by ¥0.0 billion, Eco Business by ¥0.7 billion Others by ¥24.2
billion. The total decrease in sales, including inter-segment eliminations and corporate-wide
expenses, was 46.5 billion yen.

○ In the Chemicals segment, there were higher earnings on the upturn in export prices ofvinyl chloride-related products.
○ In the Cement segment, earnings deteriorated due to manufacturing costs rising as aresult of higher raw material costs.
○ In the Electronic Materials segment, despite solid sales of semiconductor-related
products, the segment reported only a slight increase in earnings mainly due to
upswing in investment and raw material costs.
○ In the Life Science segment, earnings increased owing to a an increase in shipments tooverseas of products such as dental materials.
○ The Eco Business Segment is a new segment established in the fiscal year ended
March 31, 2022.

2

3. Net sales and operating profit by business segment (forecasts)(1) Net sales and operating profit by business segment (full year comparison)(Unit: Billions of yen)

FY2022 Forecast
Operating
Net sales
profitFY2021 Results
Operating
Net sales
profitChanges
Operating
Net sales
profitChemicals

125.5

16.0

101.4

14.2

+24.0

+1.7

Cement

63.0

(1.5)

50.3

(1.9)

+12.6

+0.4

Electronic Materials

93.5

7.0

74.9

7.2

+18.5

(0.2)

Life Science

35.0

6.0

33.5

6.0

+1.4

(0.0)

Eco Business

15.0

0.0

10.3

(0.4)

+4.6

+0.4

Others

41.5

2.5

36.3

3.8

+5.1

(1.3)

Total

373.5

30.0

307.0

28.9

+66.4

+1.0

Inter-segment
eliminations andcorporate-wide
expenses(13.5)(5.5)(13.1)

(4.4)

(0.3)

(1.0)

Consolidated results

360.0

24.5

293.8

24.5

+66.1

(0.0)

(2) Assumptions of performance forecasts for fiscal 2022

Domestic Naphtha Price (¥/kl)
Exchange Rate (¥/$)

Fiscal 2022

Fiscal 2021

78,00056,800125

112

Sales are forecast to increase due to price revisions for products in Chemicals and Cement,
as well as robust sales for semiconductor-related products. Operating profit is expected to beabout the same as the fiscal year ending March 2022 due to an increase in raw material andfuel costs.
○ In the Chemicals segment, an increase in raw material and fuel costs and pricerevisions have been taken into account.
○ In the Cement segment, an increase in raw material costs and price revisions havebeen taken into account.
○ In the Electronic Materials segment, an increase in sales of semiconductor-relatedmaterials as well as an increase in investment have been taken into account.
○ In the Life Science segment, an increase in sales of healthcare products has beentaken into account.
○ In the Eco Business Segment, an increase in sales of products such as ion exchange
membranes has been taken into account.

3

Summary of Consolidated Financial Statements for the Fiscal 2021 (JPGAAP)
April 28, 2022
Tokuyama Corporation
Stock exchange listings:
Tokyo(URL https://www.tokuyama.co.jp/eng/)
Local Code :4043
Representative:
Hiroshi Yokota, President and Representative Director
Contact:
Tetsuya Nakano, General Manager, Corporate Communications & Investor Relations Dept.
+81-3-5207-2552
Scheduled 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)
Note: All amounts are rounded down to the nearest million yen.
% indicates year-on-year changes.

(1) Performance

Net sales
Fiscal 2021
Fiscal 2020

(millions of yen)

293,830
302,407(Note) Comprehensive income: FY21:

Operating profit[%] (millions of yen)

(2.8)
(4.3)

[%]

(20.6)(9.8)

31,160 million yen [2.1%]

Basic earnings
per share

Diluted net
income per share(yen)

Fiscal 2021
Fiscal 2020

24,53930,921389.09351.11

Profit attributable toowners of parent

Ordinary profit(millions of yen)

25,85530,796FY20:

28,00024,534

[%]

14.1
23.1

Ordinary profit to Operating profit
total assets
to net sales

[%]

[%]

13.2
13.4

－
－

(millions of yen)

30,524million yen [43.4％]

Net income toshareholders’equity(yen)[%](16.0)
(6.2)

6.3
8.0

(Reference) Equity in earnings of unconsolidated subsidiaries and affiliates: FY21: 1,043 million yen

[%]

8.4
10.2

FY20: 949 million yen(2) Financial position

Total assets
Mar 31, 2022
Mar 31, 2021
(Reference)

Shareholders’ equity
ratio

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

433,210
386,794

232,917205,261

Shareholders' equity:

FY21:

[%]

51.8
51.3
224,506 million yen

Net assets per share(yen)

3,120.25
2,758.37

FY20: 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 fromoperating activities
Fiscal 2021
Fiscal 2020

(millions of yen)

25,98643,314

Cash flows frominvesting activities(millions of yen)

(33,797)(19,276)

1

Cash flows fromfinancing activities(millions of yen)

5,118
(22,530)

Cash and cash
equivalents at the endof the year
(millions of yen)

82,496
83,0502. Dividends（Period）

1stquarter(yen)

Annual dividends
3rd
Year2ndquarter quarter
end

Total

Total
dividends paid
(Total)Dividend
payout ratio(Consolidated)

Dividend on
net assets ratio(Consolidated)

[%]

[%]

(yen)

(yen)

(yen)

(millions of yen)

Fiscal 2020

--

35.00

--

35.00

70.00

4,956

19.9

2.7

Fiscal 2021

--

35.00

--

35.00

70.00

5,045

18.0

2.4

Fiscal 2022
（Forecast）

--

35.00

--

35.00

70.00

28.8

3. Consolidated performance forecast for fiscal 2022 (April 1, 2022 - March 31, 2023)(% 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 2022

(millions ofyen)

360,000[%]

22.5(millions ofyen)

24,500[%](0.2)(millions ofyen)

25,000[%](3.3)(millions ofyen)

17,500[%](37.5)(yen)

243.22*Notes(1) Changes in significant subsidiaries during this period: No(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)
Number of shares issued at end of period
Fiscal 2021:i.
(including treasury stock):ii. Number of treasury stock at end of period:
Fiscal 2021:
iii. Average number of shares over period:
Fiscal 2021:

2

72,088,327

Fiscal 2020:

72,088,327

136,954

Fiscal 2020:

103,403

71,963,931

Fiscal 2020:

69,877,138

(Reference) Summary of Non-Consolidated Operating Results
1. Non-consolidated results for fiscal year ended March 31, 2022 (April 1, 2021 – March 31, 2022)
Note: All amounts are rounded down to the nearest million yen.
% indicates year-on-year changes.

(1) Performance

Net sales
Fiscal 2021
Fiscal 2020

(millions of yen)

215,374
180,946

Operating profit[%] (millions of yen)

19.0
(4.4)

Net profit per share
Fiscal 2021
Fiscal 2020

14,641
22,232

Ordinary profit[%](34.1)(15.2)(yen)

16,947 (26.7)
23,127 (9.4)(millions of yen)

22,61422,514

[%]

0.4
51.0

(yen)

－
－

(2) Financial position

Mar 31, 2022
Mar 31, 2021

Net profit[%]

Diluted net profit per
share

314.24322.20Total assets(millions of yen)

Net assets(millions of yen)(millions of yen)354,316
315,154

168,828
150,983

Shareholders’ equity
ratio
[%]

47.6
47.9

Net assets per share(yen)

2,346.42
2,097.44(Reference) Shareholders' equity:
FY21: 168,828 million yen
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 bycertified 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.

3

Contents for Accompanying Materials
1. Management Policy(1) Assessment of Operating Environment

……………

P. 2

(2) Management Policy

……………

P. 2

(3) Pending Issues

……………

P. 2

(4) Targets of Medium-Term Management Plan 2025

……………

P. 5

2. Analysis of Operating Results and Financial Position

……………

P. 6

(1) Analysis of Operating Results

……………

P. 6

(2) Analysis of Financial Position

……………

P. 12

(3) Achievement of Medium-Term Management Plan

……………

P. 15

(4) Basic Policy for Profit Distribution and Dividends for Fiscal 2021 and 2022

……………

P. 15

3. Consolidated Financial Statements

……………

P. 16

(1) Consolidated Balance Sheets

……………

P. 16

(2) Consolidated Statements of Income

……………

P. 18

(3) Consolidated Statements of Comprehensive Income

……………

P. 19

(4) Consolidated Statements of Cash Flows

……………

P. 20

(5) Notes on Consolidated Financial Statements

……………

P. 22

(6) Segment Information

……………

P. 24

(7) Material Subsequent Event

……………

P. 27

1

1. Management Policy(1) Assessment of Operating Environment
Our Tokuyama Factory’s highly efficient integrated production processes are the source of ourcompetitiveness, and energy-intensive businesses dependent on coal-fired power generation are
our earnings drivers. However, changes in the industrial structure are accelerating, while anumber 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 thelow 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 stayin harmony with the environment and have adopted the goal of remaining a company thatcreates 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 amanagement 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
unique strengths
・ Be a company with healthy employees who have healthy families and take pride in their workat their company
・ Be a company that fosters bonds with people in communities and societies worldwide(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 forthese to account for 50% or more of the consolidated net sales ratio. In the Chemicals andCement business segments, we will promote increased efficiency and ensure stable profits.
In the fiscal year ended March 31, 2022, the Company completed construction of2manufacturing 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 theelectronics 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 fordental 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 “achievingcarbon 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 technologicaldevelopment and the starting of new businesses in next-generation energies, such ashydrogen 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 andoverseas, 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 ofmaintaining 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 to theimplementation 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 oflong-term continuous operations and analyze data such as impurities in the recovered CO₂
gas to verify the applicability of the optimum CO₂recovery technology in cement factories.

33.

Practice socially responsible management
Tokuyama approaches its CSR activities in accordance with a basic philosophy ofcontinuously working with society to build a sustainable future by contributing to theresolution of social issues and earning greater trust from various stakeholders with the aimof improving corporate value. To achieve this, we extracted social issues related to CSR
management and identified the following 10 items as materiality (important issues) byadding 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 healthWith regard to contributions to the mitigation of global warming, which for us remains oneof the Group’s most important issues, we expressed our support for the recommendationsof the Task Force on Climate-related Financial Disclosures (TCFD) in February 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 arerequired 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 theBoard of Directors. A variety of committees have been set up to enhance the effectivenessof 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, andCSR 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 andworking 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 healthmanagement 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)

Net Sales

293.8 billions of yen

320.0 billions of yen

Operating Profit

24.5 billions of yen

40.0 billions of yen

Growth Business Net Sales Growth Rate (CAGR)

19.9%

Over 10%

ROE

13.2%

Over 10%112
56,800105
32,500Assumption
Exchange rate (¥/US$)
Domestic naphtha price (¥/kl)

5

2. 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 firsthalf of the fiscal year under review, and economic recovery remained moderate. In the latter halfof 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 theomicron 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 thecosts 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 firstquarter 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 comparedwith 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).”(Unit: Millions of yen)
OperatingprofitNet sales

Ordinary profit

Profitattributable toowners ofparentFiscal 2021

293,830

24,53925,85528,000Fiscal 2020

302,047

30,92130,796

24,534(2.8)(20.6)(16.0)

14.1

Rate of change (%)

6

Net sales
Sales rose owing to higher petrochemical product sales prices and solid sales ofsemiconductor-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 applicationof Accounting Standard for Revenue Recognition, etc.
Cost of sales
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 applicationof Accounting Standard for Revenue Recognition, etc.
SG&A expenses
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.
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, thisdecrease 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 thecorresponding period of the previous consolidated fiscal year, to ¥ 25,855 million.
Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable toowners of parent
Extraordinary income/losses improved by ¥ 1,631 million compared with the previous
consolidated fiscal year.
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 thecorresponding 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 thischange to enable the year-on-year comparison presented as follows.
Sales(Unit: Millions of yen)
Reportable segment

Figures inquarterly
Adjustment consolidated
profitstatement

Chemicals

CementElectronic
Materials

Life
ScienceEcoBusiness

Others

Total

Fiscal 2021

101,482

50,36674,99633,564

10,30536,302

307,018 (13,188)

293,830

Fiscal 2020

81,38589,59361,853

28,662

9,581

62,383

333,460 (31,053)

302,407

Rate of change
(%)

24.7

(43.8)

21.2

17.1

7.6

(41.8)

Operating profit (loss)

(7.9)

-

(2.8)

(Unit: Millions of yen)
Reportable segment
Total

Figures inquarterly
Adjustment consolidated
profitstatement

Chemicals

CementElectronic
Materials

Life
ScienceEcoBusiness

OthersFiscal 2021

14,225(1,912)

7,232

6,036

(468)

3,851

28,964(4,425)24,539Fiscal 2020

13,585

4,454

7,104

3,498

(368)

5,677

33,952(3,030)30,921

Rate of change
4.7
1.8
72.6
(32.2)(14.7)(%)(Note) Sales and operating profit (loss) in each segment include inter-segment transactions.

-(20.6)

Chemicals
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 withdomestic 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.
8Cement
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 forCommercialization 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 overseasof 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.

9Eco BusinessTo make the environment segment one of our business pillars of the future, we consolidated theenvironment-related businesses scattered within the Group and newly established them as asegment 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 andother 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 situationin 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(Unit: Millions of yen)
Profit attributable
Ordinary profit
to owners ofparent25,00017,500Fiscal 2022

360,000

24,500Fiscal 2021

293,830

24,53925,85528,000

22.5

(0.2)

(3.3)

(37.5)

Rate of change (%)

These forecasts are calculated based on an exchange rate of ¥125/$ and a domestic naphtha
price of ¥78,000/kl.
[2] Outlook for segment forecasts for fiscal 2022
Chemicals
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 byadjusting selling prices and reducing basic unit and fixed costs while striving to secure revenue.

10

Cement
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 ofsemiconductor-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 accordancewith the progress being made in miniaturization, customer demands for higher quality and stablesupply 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 onestablishing 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, andexpand our business.
Eco BusinessTo 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 ofwaste 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.
OthersThe “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 bycontinuing to reduce costs.
11

(2) Analysis of Financial Position<1> Analysis of assets, liabilities and net assets
Summary of Consolidated Balance Sheets(Unit: Millions of yen)
Mar 31, 2021

Mar 31, 2022

Amount ofRate ofchangechange (%)

Assets386,794433,210

46,415

12.0

Liabilities

181,533

200,292

18,758

10.3（Interest-bearing debt）

98,437109,219

10,78211.0

Net assets

205,261

232,917

27,656

13.5（Shareholders' equity）

198,561

224,506

25,945

13.1

Mar 31, 2021

Mar 31, 2022

Amount of

Financial indicatorschangeD/E ratio

0.50

0.49

(0.01)Net D/E ratio

0.07

0.12

0.05

Shareholders’ equity ratio (%)

51.3

51.8

0.5points

Shareholders’ equity ratio based on market price

52.0

28.5

(23.5)points(%)(Note)*D/E ratio: interest-bearing debt / shareholders' equity
Net D/E ratio: (interest-bearing debt - Cash and cash equivalents) / shareholders' equity
Shareholders’ equity ratio (%): interest-bearing debt / total assets
Shareholders’ equity ratio based on market price (%) : market capitalization / 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 comparedwith 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.
As a result, total liabilities amounted to ¥ 200,292 million, up ¥18,758 million compared withthose as of March 31, 2021.

12

(Net assets)
Retained earnings increased ¥ 23,202 million as a result of posting profit attributable to ownersof 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 withthose as of March 31, 2021.

(Financial indicators)
With regard to the consolidated fiscal year under review, the D/E ratio improved 0.01 comparedwith 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(Unit: Millions of yen)
Fiscal 2020

Fiscal 2021

Cash flows from operating activities

43,31425,986

Cash flows from investing activities(19,276)(33,797)

Cash flows from financing activities(22,530)

5,118

623

1,267

2,131

(1,424)-870

83,05082,496

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Increase/decrease in cash and cash equivalents due to changes in
the accounting period of consolidated subsidiaries
Cash and cash equivalents at end of year

(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 theworking 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 ofcontributing to the mitigation of global warming, such as rationalization, energy saving, andmeasures to reduce CO2 emissions, as well as to promote strategic investments. While theprincipal 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 topromote its business activities. In addition, Tokuyama has executed revolving credit facility,
overdraft, and credit liquidation agreements with a financial institution. Accounting for thesefactors, 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 ofsemiconductor-related products in the electronic materials segment as well as an increase inoverseas 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 and2022

As far as the distribution of profits is concerned, Tokuyama’s basic policy is the ensure thecontinuous and stable payment of dividends to its shareholders. Our basic policy remains thetaking into consideration of business performance, dividend payout ratio, our medium- tolong-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.
In fiscal 2021, the Company expects to pay out a year-end dividend of ¥35 per share in line withthe basic policy mentioned above.
As far as dividends for the next period are concerned, Tokuyama plans to undertake the paymentof 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 Sheets(Millions of yen)
3/31/2022

3/31/2021
AssetsCurrent 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 assets

16

83,68170,901－－
25
14,674
10,995
13,9305,666(115)
199,760

83,116－
7,212
70,98911
19,194
14,264
22,265
6,968(72)
223,950

105,028(76,427)
28,601
459,039(413,493)
45,54522,827(19,995)
2,831
31,9036,900(2,431)
4,469
10,674
124,025

108,926(78,815)
30,111
475,226(424,410)
50,81523,356(20,368)
2,987
32,112
8,682(3,302)
5,379
18,195
139,602

86
43
1,751
1,882

68
25
2,588
2,682

27,171
2,094
16,407
10,6604,854(61)
61,126
187,034
386,794

28,255
2,094
21,111
10,482
5,077(46)
66,974
209,259433,210

3/31/2021
Liabilities
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 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
17(Millions of yen)
3/31/2022

39,547
1,850
8,899
1,204
2,375
3,057
33
4,884
1,100
95
122
40
17
－
20,07983,30849,055463
20,823
1,225
2,157
3,462
－
5,409
908
73
108
14
－
47
18,587102,337－
82,812
3,671
247
201
－
1,340
1,028
124
137
1,991
56
6,613
98,224
181,533

15,00067,951
3,754
248
194
33
1,181
874
88
118
2,081
57
6,370
97,954200,292

10,00023,455
157,332(349)
190,438

10,00023,453
180,534(414)
213,573

3,274
(19)
2,165
2,702
8,122
6,700
205,261
386,794

3,587
(8)
4,849
2,505
10,932
8,411
232,917433,210

(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
Foreign exchange gains
Equipment sale income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Provision for decommissioning and removals
Equipment cost of sales
Other
Total non-operating expenses
Ordinary profit
Extraordinary 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 claimsCompensation 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 income
Extraordinary 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 losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent
18

FY2020302,407207,254
95,152(Millions of yen)
FY2021
293,830
198,417
95,41240,51023,71964,23030,92144,85426,01770,872
24,539

94
395
949
320
575
2,836
5,172

139
502
1,043
1,000
－
4,208
6,894

1,524
750
562
2,459
5,297
30,796

1,382
558
－
3,637
5,578
25,855

98
77
746
155
203
－
1,478
197
125
96
3,180

474
161
－
203
36
2,218
－
－
－
35
3,129

2
825
243
3
830
817
293
3,017
30,959
4,336
1,302
5,639
25,320785
24,534

14
3
157
115
820
－
224
1,334
27,6494,306(4,831)(525)
28,175174
28,000(3) Quarterly Consolidated Statements of Comprehensive Income
25,320(Millions of yen)
FY2021
28,175

2,968
16
1,480
694

317
10
2,805
△199

43

51

5,203
30,524

2,985
31,16029,670853

30,814346

FY2020
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 interests19(4) Consolidated Statements of Cash Flows(Millions of yen)
FY2021

FY2020Cash 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
SubtotalInterest 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 activities

20

30,95917,003
1,795
(129)
(69)
(490)
10
(96)
(77)
(746)
(949)
(155)
1,524
3
825
830
(203)
(1,478)
(197)
(125)
－
(2,124)
2,283
(914)
(533)
1,190
319
48,454915(1,530)257－(31)(4,750)43,314

27,64919,716
1,451
102
(121)
(641)
(458)
(460)
(161)
－
(1,043)
(203)
1,382
115
3
820
(36)
－
－
－
(2,218)(6,796)(15,704)(1,207)
8,538(1,928)(251)
28,547
1,174(1,386)
36
2,218
(117)
(4,486)25,986

(Millions of yen)
FY2021

FY2020Cash 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 inscope 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 activities
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 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 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
Increase/decrease in cash and cash equivalents due to changes
in the accounting period of consolidated subsidiaries
Cash and cash equivalents at end of period

21

(106)
240
(23,800)
1,108
(251)
133

(259)
275
(31,887)
713
(428)
547

3,356

－

(29)
180
155
1,489
(1,752)(19,276)

(201)
187
203
－
(2,948)(33,797)(1,490)187(15,857)－
1,303(4,861)(239)(40)(1,531)(22,530)623
2,131
80,918(1,787)
6,218(9,150)14,926
1,514(5,034)(158)(101)(1,307)5,118
1,267(1,424)
83,050－870

83,05082,496

(5) Notes on Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Changes in significant subsidiaries during this period)
Not applicable.
(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 torecognize revenue at the amount expected to be received in exchange for the promised goods orservices 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 thetransitional 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 earningsof the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, andthus the new accounting policy was applied from the beginning balance; provided, however, thatthe new accounting policy was not retrospectively applied to contracts where recognitions ofnearly all the revenue amounts for periods prior to the beginning of the first quarter ended June30, 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 andcost 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.

22

Due 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 theprevious 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 andParagraph 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 basedon the provisions of the tax laws before the revision.

23

(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 businessdivisions, and has four reportable segments, “Chemicals,” “Specialty Products,” “Cement,” and“Life & Amenity.”
Main products and services of each reportable segment are as follows:

Reportablesegment

Main products and services

Chemicals

Caustic soda, soda ash, calcium chloride, sodium silicate, vinyl chloride
monomer, polyvinyl chloride resin, propylene oxide, chlorinated solvents,and hydrogen

CementCement, ready-mixed concrete, cement-type stabilizer, and resource
recycling businessElectronic
Materials

Polycrystalline silicon, fumed silica, tetrachlorosilane, aluminum nitride,
high-purity chemicals for electronics manufacturing, photoresist developerand isopropyl alcoholLife Science

Medical diagnosis systems, dental materials and equipment, pharmaceuticalingredients and intermediates, plastic lens-related materials for glasses andmicroporous film

Eco Business

Waste gypsum board recycling, ion exchange membranes and plastic
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 thischange.

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The 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).

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<2> Information on sales, income, assets and other items by reportable segment
Fiscal 2020 (April 1, 2020 –March 31, 2021)
Reportable segments

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(Millions of yen)
Figures inquarterly
Adjustment
consolidated*2
incomestatement*3

Chemicals

CementElectronic
Materials

Life
ScienceEcoBusiness

Others*1

Total

80,55588,96949,72827,4089,076

46,668302,407-

302,407829

623

12,125

1,254

504

15,71431,053(31,053)-

81,385
13,58549,22789,593
4,454
56,411

61,853
7,104
69,54728,662
3,498
34,947

9,581(368)
10,65562,383
5,677
52,892

333,460
33,952
273,680(31,053)(3,030)113,113

302,407
30,921
386,794

2,651

3,461

3,706

1,312

481

4,222

15,836

1,167

17,003

3,277

5,154

6,472

1,930

758

6,030

23,624

3,456

27,080*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 specificreportable segments.
(2) Included in the segment assets adjustment amount are corporate assets that are not allocated to specificreportable 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.

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Fiscal 2021

(April 1, 2021 –March 31, 2022)
Reportable segments

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(Millions of yen)
Figures inquarterly
Adjustment
consolidated*2
incomestatement*3

Chemicals

CementElectronic
Materials

Life
ScienceEcoBusiness

Others*1

Total

101,093

49,67974,33233,4399,935

25,349293,830-

293,830

388

687

664

125

370

10,953

13,188(13,188)-

101,482
14,22559,47250,366(1,912)58,67074,996
7,232
91,00833,564
6,036
39,294

10,305(468)
12,36436,302
3,851
60,593307,018
28,964321,403(13,188)(△4,425)
111,807

293,830
24,539433,210

2,969

3,953

4,952

1,361

605

4,177

18,0201,696

19,716

4,891

4,806

14,348

1,657

924

5,238

31,865

3,190

35,056*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 specificreportable segments.
(2) Included in the segment assets adjustment amount are corporate assets that are not allocated to specificreportable segments (¥ 149,158 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.
*6 Net sales are not presented separately from earnings derived from contracts with customers and other earnings
because the amount of other earnings is insignificant.

(7) Material Subsequent Event
Not applicable.

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