Summary of Consolidated Financial Statements for the Third Quarter Fiscal 2014 (JPGAAP)
January 30, 2015
Tokuyama Corporation
Stock exchange listings:
Tokyo(URL http://www.tokuyama.co.jp/)
Local Code :4043
Representative:
Kazuhisa Kogo, President and Representative Director
Contact:
Taro Kobayashi, General Manager, Corporate Communications & Investor Relations Dept.
+81-3-6205-4832
Scheduled date for the filing of the quarterly consolidated financial statements : February 13, 2015
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 third quarter ended Dec. 31, 2014 (April 1, 2014 - Dec. 31, 2014)(1) Performance

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

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

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

Third Quarter Fiscal 2014
222,029
6.8
15,86726.9
11,057
12.4
Third Quarter Fiscal 2013
207,920
10.0
12,508353.6
9,835(Note) Comprehensive income: 3rd Q FY14: (73,623) million yen [-%]; 3rd Q FY13: 10,850 million yen [-%]Net income

Third Quarter Fiscal 2014
Third Quarter Fiscal 2013

Net income per
share

Diluted net income
per share(millions of yen)

Year-on-yearchange [%]

(yen)

(yen)

(78,878)7,491-(226.73)
21.53-

Total assets

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

Shareholders’Equity ratio(%)

Net assets per
share
(yen)

(2) Consolidated financial position

Dec. 31, 2014
Mar. 31, 2014

564,570
160,491
576,315
236,453
Dec. 31, 2014: 153,751 million yen(Reference) Shareholders' equity:

27.2
441.9839.9
660.18Mar. 31, 2014: 229,667 million yen

2. Dividends（Period）

1st quarter(yen)

Fiscal 2013, ended
Mar 31, 2014
Fiscal 2014, ending
Mar 31, 2015
Fiscal 2014
（Forecast）

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

(yen)

-

3.00

-

-

0.00

-

Total

(yen)

(yen)

3.00

6.00

0.00

0.00

(Note) Revision of the latest dividends forecast: No

3. Consolidated performance forecast for fiscal 2014 (April 1, 2014 - March 31, 2015)(% indicates the rate of change over the corresponding previous period)

Net sales(millionsofyen)Operating income Ordinary income[%](millions

of
yen)

[%]

(millions

of
yen)

[%]

(millionsofyen)Fiscal 2014
309,000
7.5
21,0003.6
15,0000.2 (75,000)(Note) Revision of the latest consolidated performance forecast: No-1-

Net income pershare

Net income
[%]

-

(yen)

(215.58)

*Notes(1) Changes in significant subsidiaries during this period (Apr. 1, 2014 – Dec. 30, 2014): No
Addition to the scope of consolidation: Reduction from the scope of consolidation: (Note) This item means changes in significant subsidiaries with changes in the scope of consolidation
during this period (Apr. 1, 2014 – Dec. 30, 2014).
(2) Application of accounting methods specific to the preparation of the quarterly consolidated
financial statements: Yes(3) Changes of accounting policies, changes in accounting estimates, and retrospective restatements
i. Changes of accounting policies by revision of accounting standards: Yes
ii. Changes of accounting policies other than the above:Noiii. Changes in accounting estimates:No
No
iv. Retrospective restatements:(4) Number of shares issued (in common stock)
Number of shares issued at end of period Third Quarteri.
Fiscal 2014:(including treasury stock):ii.

Number of treasury stock at end of period:iii. Average number of shares over period:

Third Quarter

Fiscal 2014:
Third Quarter

Fiscal 2014:

349,671,876

Fiscal 2013:

349,671,876

1,802,130

Fiscal 2013:

1,782,644

347,899,311

Third Quarter

Fiscal 2013:

347,914,599(Note) Notice on the implementation of quarterly review proceduresThis summary of quarterly consolidated financial statements is not subject to quarterly review procedures inline with 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 linewith the Financial Instruments and Exchange Act are underway.

(Note) Cautions pertaining to appropriate use of performance forecast and other particular items
The performance forecasts and other forward-looking statements contained in this material have been
prepared on the basis of information available at the date of disclosure and certain assumptions which are
judged to be rational. As a result, actual performance may differ materially from forecasts due to a variety
of factors that may arise in the future.

-2-

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

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

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

P. 8…………………

P. 9

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

P. 10(1) Consolidated Quarterly Balance Sheets…………………

P. 10(2) Consolidated Quarterly Statements of Income…………………

P. 12(3) Consolidated Quarterly Statements of Comprehensive Income…………………

P. 13(4) Segment Information…………………

P. 14(3) Explanation concerning information related to future
prediction such as consolidated performance forecast-1-1. Qualitative information on consolidated quarterly results(1) Explanation concerning business results
Consolidated results for the third quarter fiscal 2014 (accumulated figures, April 1,2014 - December 31, 2014) are summarized as follows:(Unit: Millions of yen)
Net sales

Operating income

Ordinary income

Net income (loss)

Third Quarter Fiscal 2014

222,029

15,867

11,057(78,878)

Third Quarter Fiscal 2013

207,920

12,508

9,835

7,491

6.8

26.9

12.4

-

Rate of change (%)

Net sales
Consolidated net sales increased 6.8%, or ¥14.1 billion compared with thecorresponding period of the previous year, to ¥222.0 billion. In addition toincreased sales volumes of polycrystalline silicon and high-purity chemicals forelectronics manufacturing and selling price revisions of petrochemicals and caustic
soda, this was largely attributable to strong sales mainly of active pharmaceuticalingredients and the commencement of the operation of the newly added
consolidated subsidiaries.
Cost of sales
Cost of sales increased 5.4%, or ¥8.1 billion compared with the corresponding
period of the previous year, to ¥159.3 billion, due chiefly to increased sales
volumes and a rise in raw material costs arising from domestic naphtha price hikes.
SG&A expenses
SG&A expenses increased 5.9%, or ¥2.6 billion compared with the corresponding
period of the previous year, to ¥46.7 billion, due mainly to higher distribution
costs resulting from increased sales volumes and an increase in amortization of
goodwill.
-2-

Operating income
Operating income increased 26.9%, or ¥3.3 billion compared with thecorresponding period of the previous year, to ¥15.8 billion, due chiefly toincreased sales volumes and profitability improvement of petrochemicals.
Non-operating income/expenses, Ordinary income
Despite a decrease in costs of idle operations, non-operating income/expenses
deteriorated by ¥2.1 billion compared with the corresponding period of theprevious year, due chiefly to an increase in interest expenses and the posting of trial
production expenses at Tokuyama Malaysia Sdn. Bhd.
As a result, ordinary income increased 12.4%, or ¥1.2 billion compared with thecorresponding period of the previous year, to ¥11.0 billion.
Extraordinary income/losses, Income/loss before income taxes andminority interests, Income/loss before minority interests, Net income/loss
Extraordinary income/losses deteriorated by ¥87.7 billion compared with thecorresponding period of the previous year. This was largely attributable to theposting of an impairment loss on the polycrystalline silicon manufacturing facilitiesof Tokuyama Malaysia Sdn. Bhd.
As a result of the above, income/loss before income taxes and minority interests
deteriorated by ¥86.5 billion compared with the corresponding period of theprevious year, to a loss of ¥77.1 billion.
Income/loss before minority interests deteriorated by ¥86.5 billion compared withthe corresponding period of the previous year, to a loss of ¥79.1 billion. After
deducting minority interests, the Company recorded a net loss of ¥78.8 billion.
Consequently, net income/loss deteriorated by ¥86.3 billion compared with thecorresponding period of the previous year.

-3-

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

Others

Total

Adjustment

Figures inquarterly
consolidated
incomestatement

43,83638,305249,123(27,093)

222,029

58,14740,58235,782

233,770(25,850)

207,920

3.9

8.0

7.1

6.6

-

6.8

Reportable segment

Third Quarter
Fiscal 2014
Third Quarter
Fiscal 2013

Chemicals

Specialty
Products

Cement68,10538,47860,39664,01635,241

6.4

9.2

Rate of change (%)

Life &
Amenity

Operating income(Unit: Millions of yen)

Others

Total

Adjustment

Figures inquarterly
consolidated
incomestatement

3,659

4,404

19,040(3,173)

15,867

4,773

3,083

3,439

15,005(2,497)

12,508(26.0)

18.7

28.1

26.9

-

26.9

Reportable segment

Third Quarter
Fiscal 2014
Third Quarter
Fiscal 2013
Rate of change (%)

Chemicals

Specialty
Products

Cement

3,800

3,645

3,530

1,398

2,310

171.8

57.8

Life &
Amenity(Note) Sales and operating income in each segment include inter-segment transactions.

ChemicalsWith regard to caustic soda, sales increased compared with the corresponding
period of the previous year. In addition to steady domestic sales, this was
attributable to our efforts to revise selling prices in order to absorb a rise in raw
materials prices.
With regard to vinyl chloride monomer (VCM), despite an increase in raw
material costs arising from domestic naphtha price hikes, profitability improved
owing to high export prices against the backdrop of stronger Asian market
conditions and the weaker yen.
With regard to polyvinyl chloride (PVC), although sales volume decreased due
mainly to a drop in housing starts arising from reaction to the rush housing-4-

demand before the consumption tax increase, sales increased compared with thecorresponding period of the previous year. This was attributable to selling pricerevisions we made to absorb a rise in raw materials prices.
With regard to soda ash and calcium chloride, sales increased compared with thecorresponding period of the previous year. This was attributable to thecommencement of the operation of TOKUYAMA & CENTRAL SODA Inc.
As a result of the above, segment net sales increased 6.4% compared with thecorresponding period of the previous year, to ¥68.1 billion and operating
income increased 171.8% to ¥3.8 billion. The segment reported higher earnings
on higher sales.

Specialty Products
With regard to semiconductor-grade polycrystalline silicon, sales volume
increased owing mainly to strong demand for mobile terminals including
smartphones. On the other hand, with regard to solar cell-grade polycrystalline
silicon, the Company’s consolidated subsidiary Tokuyama Malaysia Sdn. Bhd.
commenced shipments of solar cell-grade polycrystalline silicon undercircumstances where demand for solar panels continued to expand. As a resultof the above, sales of polycrystalline silicon increased compared with thecorresponding period of the previous year.
With regard to fumed silica, sales were steady, mainly of its application as apolishing material for semiconductors. As a result of this, sales increased
compared with the corresponding period of the previous year.
With regard to aluminum nitride, sales increased compared with thecorresponding period of the previous year. This was attributable to an increasein sales volumes of such applications as heat dissipation materials used for
power devices for industrial machinery and LEDs.
-5-

With regard to high-purity chemicals for electronics manufacturing, sales
increased compared with the corresponding period of the previous year, owing
to strong sales of such applications as semiconductor and liquid crystal
production.
As a result of the above, segment net sales increased 9.2% compared with thecorresponding period of the previous year, to ¥38.4 billion and operating
income increased 57.8% to ¥3.6 billion. The segment reported higher earnings
on higher sales.

CementIn the cement business, domestic sales volume decreased due chiefly to a labor
shortage in the construction industry and delay in construction work caused byunseasonably bad weather. On the other hand, exports to Asia increased against
the backdrop of steady demand in the Asian market. As a result of the above,
total sales volumes were roughly flat compared with the corresponding period of
the previous year. On the cost front, distribution costs increased due largely tothe construction of new cement tankers.
In the recycling and environment-related business, the amount of waste theCompany accepted remained almost flat.
With regard to consolidated subsidiaries, sales increased compared with thecorresponding period of the previous year, mainly because Hiroshima Tokuyama
Ready Mixed Concrete Co., Ltd. launched its operations.
As a result of the above, segment net sales increased 3.9% compared with thecorresponding period of the previous year, to ¥60.3 billion, while operating
income decreased 26.0% to ¥3.5 billion. The segment reported lower earnings
on higher sales.

-6-Life & Amenity
Sales of active pharmaceutical ingredients grew owing to increased sales volumesof generic drugs and other applications.
With regard to microporous film, the manufacturing facilities of Tianjin
Tokuyama Plastics Co., Ltd. commenced operations, and due to this, sales
volumes of such applications as sanitary articles including disposable diapers
increased. As a result of this, sales increased compared with the corresponding
period of the previous year.
With regard to polyolefin film, in addition to steady sales mainly of its
application as packaging material for everyday items at convenience stores, werevised selling prices to absorb a rise in raw material prices. As a result of theabove, sales increased compared with the corresponding period of the previous
year.
With regard to gas sensors, sales increased compared with the corresponding
period of the previous year. This was attributable to strong overseas sales ofsuch applications as gas alarm devices and air cleaners.
With regard to medical diagnosis systems, profitability rose compared with thecorresponding period of the previous year. In addition to steady sales of
products for blood testing, this was attributable to our cost reduction efforts.
With regard to plastic window sashes, sales decreased compared with thecorresponding period of the previous year. This was attributable to a decrease insales volume arising from reaction to the rush demand before the consumption
tax increase.
As a result of the above, segment net sales increased 8.0% compared with thecorresponding period of the previous year, to ¥43.8 billion and operating
income increased 18.7% to ¥3.6 billion. The segment reported higher earnings
on higher sales.
-7-(2) Explanation concerning financial position(Status of assets, liabilities and net assets)
As of December 31, 2014, total assets amounted to ¥564.5 billion, a decrease of¥11.7 billion compared with those as of March 31, 2014.
This was largely attributable to a decrease in property, plant and equipment
resulting from the posting of a loss on the impairment of polycrystalline silicon
manufacturing facilities of Tokuyama Malaysia Sdn. Bhd.
Total liabilities amounted to ¥404.0 billion, an increase of ¥64.2 billion comparedwith those as of March 31, 2014.
This was largely attributable to long-term loans payable through a medium-term
commitment line agreement.
Net assets totaled ¥160.4 billion, a decrease of ¥75.9 billion compared with those
as of March 31, 2014.
This was largely attributable to a decrease in retained earnings resulting from theposting of the impairment loss.
At the end of the second quarter of fiscal 2014, the fiscal year ending March 31,
2015, Tokuyama had infringed financial covenants of certain loan agreements it haswith some financial institutions. In order to address this matter, the Company
requested the financial institutions to negotiate with us about exemption fromfinancial covenants and continuous transactions, and through negotiation
Tokuyama has received approval from the financial institutions to its exemption
from financial covenants and continuous transactions.
Moreover, although there were concerns that it would infringe certain financial
covenants of some loan agreements at the time of its settlement of accounts forthe fiscal year ending March 31, 2015, the Company has resolved concerns
regarding future infringement by revising financial covenants.

-8-

(3) Explanation concerning information related to future prediction suchas consolidated performance forecasts
Although the future business environment is uncertain because of the sharp
depreciation of the yen and fluctuations in raw material and fuel prices, theCompany’s results were in line with our expectations at this time. Therefore, theCompany has not revised the performance forecasts, announced on October 31,
2014.
The performance forecasts contained in this material have been prepared on thebasis of information available at the date of disclosure and certain assumptions
which are judged to be rational. As a result, actual performance may differ
materially from forecasts due to a variety of factors that may arise in the future.

-9-2. Consolidated Quarterly Financial Statements(1) Consolidated Quarterly Balance Sheets
Millions of yen
3/31/201412/31/2014
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
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
Net defined benefit asset
Other
Allowance for investment loss
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-10-

27,60567,49543,05014,131
9,896
17,878
1,068
10,635(138)
191,623

59,891
72,00453,053
16,772
12,251
18,7201,250
10,779(110)
244,613102,709(71,685)
31,024
441,874(392,062)
49,812
23,002(21,360)
1,642
32,667
2,156
(895)
1,261
206,692
323,100

136,973(73,621)
63,351545,871(399,856)
146,015
23,167(21,069)
2,097
33,163
2,225
(973)
1,252
8,970
254,850

3,608
29
6,493
10,131

5,755
48
5,011
10,81533,334
3,473
839
7,804
6,264
(21)
(233)
51,460384,692
576,315

39,512
3,346
829
5,909
5,068
(25)
(350)
54,290319,956
564,570

Millions of yen
3/31/201412/31/2014
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Commercial papers
Current portion of long-term loans payable
Current portion of bonds
Lease obligations
Income taxes payable
Deferred tax liabilities
Provision for bonuses
Provision for repairs
Provision for product warranties
Provision For Restructuring
Provision for loss on purchase contract
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors' retirement benefits
Provision for repairs
Allowance for loss on compensation for building materials
Provision for environmental measures
Provision for loss on purchase contract
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
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
Minority interests
Total net assets
Total liabilities and net assets-11-

40,08912,347
4,000
8,811
－
376
1,865
1
2,056
1,429
132
13
－
28,17399,29746,88013,7783,000
26,750
5,000
330
653
3
1,196
996
50
3
3,718
26,218
128,582

50,000164,278
953
7,338
207
2,747
842
131
－
1,112
5
12,946
240,565
339,862

45,000195,564
996
9,437
214
3,078
624
94
7,162
1,137
5
12,180275,496404,078

53,45857,670107,155(1,428)
216,856

53,45857,67025,781(1,434)135,476

8,369
749
2,710
982
12,811
6,785
236,453
576,315

12,282
329
4,594
1,068
18,275
6,740
160,491
564,570

(2) Consolidated Quarterly 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 income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Trial production expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on bargain purchase
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Impairment loss
Loss on disaster
Loss on reduction of non-current assets
Loss on disposal of non-current assets
Loss on sales of shares of subsidiaries and associates
Provision for loss on purchase contract
Loss on purchase contract
Other
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes
Income (loss) before minority interests
Minority interests in loss
Net income (loss)-12-

Millions of yen
Q3 FY2013
Q3 FY2014
207,920
222,029
151,243
159,393
56,676
62,63625,98018,18744,16812,50827,545
19,223
46,76815,867

34
546
426
588
1,110
2,706

85
624
584
－
1,116
2,411

2,307
－
3,071
5,378
9,835

3,533
1,077
2,610
7,221
11,057

185
－
379
－
565

50
5
－
20
76

37
226
－
－
296
78
－
－
385
1,024
9,376
1,991
7,385
(106)
7,491

－
75,9424
2294
8
10,881567
594
88,297(77,163)
1,967(79,130)(252)(78,878)

(3) Consolidated Quarterly Statements of Comprehensive Income

Income (loss) before minority interests
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, net of tax
Share of other comprehensive income of entities accounted for using equity
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests-13-

Millions of yen
Q3 FY2013
Q3 FY2014
7,385(79,130)
2,659(1,459)
2,051
－
212
3,464
10,850

3,912
(420)
1,864
86
63
5,507
(73,623)

10,83910(73,414)(208)

(4) Segment information
Third Quarter Fiscal 2013 (accumulated figures, April 1, 2013 – December 31, 2013)
1. Information on sales and income (loss) by reportable segment(Millions of yen)
Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment income (loss)

Chemicals

Specialty
Products

Cement63,186829
64,016
1,398

27,4697,772
35,241
2,310

58,016
131
58,147
4,773

Life &
Amenity

39,455
1,126
40,582
3,083

Others*1

Total

19,791
15,99135,782
3,439

207,920
25,850233,770
15,005Adjustment*2

Figures inquarterly
consolidated
incomestatement*3(25,850)(25,850)(2,497)

207,920
207,920
12,508*1 “Others” segment comprises businesses other than those of the reportable segments. Concretely, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.
*2 The segment income adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment.
*3 With regard to segment income, operating income in the quarterly consolidated statement of income has
been calculated by making an adjustment to the sum total of the reportable segments’ income and the “Others”
segment’s income.

2. Information on impairment loss of non-current assets or goodwill by reportable segment
There were no material facts to be reported.

Third Quarter Fiscal 2014 (accumulated figures, April 1, 2014 – December 31, 2014)
1. Information on sales and income (loss) by reportable segment(Millions of yen)
Reportable segments

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

Chemicals

Specialty
Products

Cement67,487
618
68,1053,800

29,801
8,676
38,4783,645

60,31779
60,3963,530Life &
Amenity

42,566
1,270
43,836
3,659

Others*1

Total

21,856
16,44938,305
4,404

222,029
27,093249,123
19,040Adjustment*2

Figures inquarterly
consolidated
incomestatement*3(27,093)(27,093)(3,173)222,029
222,029
15,867*1 The “Others” segment comprises businesses other than those of the reportable segments. Concretely, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.
*2 The segment income adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment.
*3 With regard to segment income, operating income in the quarterly consolidated statement of income has
been calculated by making an adjustment to the sum total of the reportable segments’ income and the “Others”
segment’s income.

2. Information on changes in reportable segments(Adoption of the accounting standard for retirement benefits)
Regarding the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, issued on May 17,
2012; hereinafter “Retirement Benefits Accounting Standard”) and the “Guidance on Accounting Standard for-14-

Retirement Benefits” (ASBJ Guidance No. 25, issued on May 17, 2012; hereinafter “Retirement Benefits
Implementation Guidance”), effective from the first quarter of fiscal 2014, the Company adopted theprovisions specified under the main clause of Section 35 of Retirement Benefits Accounting Standard and themain clause of Section 67 of Retirement Benefits Implementation Guidance. Under the new accounting policy,
the Company has revised a method for calculating retirement benefit obligations and service costs and changed
the attribution method for estimated retirement benefits from a fixed amount standard to a payment calculation
standard. At the same time, the Company has changed a method for determining the discount rate from using a
discount rate based on the years similar to the average remaining service period of employees to using a single
weighted average discount rate which reflects the projected retirement benefit payment period and an amountby projected payment period. The effect of this change on segment information was immaterial.

3. Information on impairment loss of non-current assets or goodwill by reportable segment
There were no material facts to be reported.

-15-