Disclaimer: This document has been translated from the financial section of the JapaneseAnnual Securities Report for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

Annual Securities Report（Financial Section）

The 159th Fiscal Term (April 1, 2022 to March 31, 2023)

Tokuyama Corporation

1. Consolidated financial statements etc.
(1) Consolidated financial statements(i) Consolidated balance sheets(Millions of yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
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

As of March 31, 2023

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

68,0808,672
83,38811
24,111
19,90237,31012,282(71)

223,950

253,689*2, *3 108,926*3 116,841(78,815)(80,555)

30,11136,285*2, *3 475,226*2, *3 487,746(424,410)(430,082)

50,81557,663*3 23,356*3 24,395(20,368)(21,125)

2,987

3,269

*2 32,112

8,682(3,302)33,033
9,788(4,124)

5,379

5,664

Construction in progress

18,195

19,419Total property, plant and equipment

139,602155,33668
25*3 2,588349
17*3 3,098

2,682

3,465

*1, *2 28,255*1, *2 29,499

2,094
21,111
10,482*1 5,077
(46)

2,185
19,416
10,023*1 4,777(7)(44)

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 investment loss
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets―1―

66,97465,850209,259

224,653433,210478,342(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Lease obligations
Income taxes payable
Asset retirement obligation
Provision for bonuses
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
Provision for contract loss
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (andother 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-salesecurities
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―2―

As of March 31, 2023

49,055463*2 20,823
1,225
2,157
3,462
5,409
908
73
108
14
47
18,587

49,8222,491*2 1,407
1,196
1,231
63
2,768
3,922
519
72
129
5
15
469
24,129102,337

88,24415,00015,000*2 67,951*2 118,333

3,754
248

4,019
228

194

197

33
1,181
874

37
1,513
631

88

48

118
2,081
57
6,370
97,954200,292

90
2,113
11
6,269
148,495
236,739

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

10,00023,443
184,852(414)
217,880

3,587

4,053

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

(3)
5,630
1,889
11,56912,151
241,602478,342

(ii) Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2022
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
methodOutsourcing service income
Trial products income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Fiduciary obligation expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Subsidy income
Gain on sales of know-how
Gain on insurance claims
Gain on step acquisitions
Compensation income for damages
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
assetsLoss on disposal of non-current assets
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent―3―

Fiscal year ended
March 31, 2023

*1 293,830*1 351,790*2, *5 198,417*2, *5 261,009

95,41290,781*3 44,854*3 47,440*4, *5 26,017*4, *5 29,004

70,872
24,53976,444
14,336

139
502

184
574

1,043

1,592

618
610
1,000
2,979
6,894

938
668
2,256
6,214

1,382
410
3,785
5,578
25,855

1,592
684
565
2,926
5,768
14,783*6 474

*6 80

161
203
36
2,218
35
3,129

145
110
85
22
5
20
469

*7 14

*7 11

*8 3

*8 12

157

70

115

63

820
224
1,334
27,6494,306(4,831)(525)
28,175174
28,000607
62827
14,424
2,703
2,358
5,061
9,362
(1)
9,364

Consolidated statements of comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2022
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 ofparentComprehensive income attributable to non-controllinginterests―4―

Fiscal year ended
March 31, 2023

(iii) Consolidated statements of changes in equity
Fiscal year ended March 31, 2022
(Millions of yen)
Shareholders' equity

Balance as of April 1,
2021

Share capital

Capital surplus

10,00023,455Retainedearnings
157,332

Treasury shares

Total
shareholders’equity(349)

190,438

Changes during period
Profit attributable toowners of parent

28,00028,000

Dividends of surplus(5,045)(5,045)Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Increase (decrease) due
to changes in theaccounting period of
consolidated subsidiaries
Net changes in items
other than shareholders'equityTotal changes during
periodBalance as of March 31,
2022

(112)

(112)

47

47

(0)

(2)

(2)

247

247

-

(2)

23,202(64)

23,135

10,00023,453

180,534(414)

213,573

Accumulated other comprehensive income
Total
Valuation
Deferred gains Foreign currency Remeasurements accumulated Non-controlling Total net assets
difference oninterests
or losses
translationof defined benefit
otheravailable-for-saleon hedges
adjustment
planscomprehensive
securities
incomeBalance as of April 1,
2021

3,274

(19)

2,165

2,702

8,122

6,700

205,261

Changes during period
Profit attributable toowners of parent

28,000

Dividends of surplus(5,045)Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Increase (decrease) due
to changes in theaccounting period of
consolidated subsidiaries
Net changes in items
other than shareholders'equityTotal changes during
periodBalance as of March 31,
2022

(112)
47

(2)

247

313

10

2,683

(197)

2,810

1,711

4,521

313

10

2,683

(197)

2,810

1,711

27,656

3,587

(8)

4,849

2,505

10,932

8,411

232,917―5―

Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders' equity

Balance as of April 1,
2022

Share capital

Capital surplus

10,00023,453Retainedearnings
180,534

Treasury shares

Total
shareholders’equity(414)

213,573

Changes during period
Profit attributable toowners of parent

9,364

9,364

Dividends of surplus(5,045)(5,045)Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Change in scope of
consolidation
Net changes in items
other than shareholders'equityTotal changes during
periodBalance as of March 31,
2023

(3)

(3)

3

3

(9)

(9)

(1)

(1)

-

(9)

4,317

(0)

4,307

10,00023,443

184,852(414)

217,880

Accumulated other comprehensive income
Total
Valuation
Deferred gains Foreign currency Remeasurements accumulated Non-controlling Total net assets
difference oninterests
or losses
translationof defined benefit
otheravailable-for-saleon hedges
adjustment
planscomprehensive
securities
incomeBalance as of April 1,
2022

3,587

(8)

4,849

2,505

10,932

8,411

232,917

Changes during period
Profit attributable toowners of parent

9,364

Dividends of surplus(5,045)Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Change in scope of
consolidation
Net changes in items
other than shareholders'equityTotal changes during
periodBalance as of March 31,
2023

(3)
3

(9)

(1)
466

5

780

(615)

637

3,740

4,377

466

5

780

(615)

637

3,740

8,684

4,053

(3)

5,630

1,889

11,56912,151

241,602―6―

(iv) Consolidated statements of cash flows(Millions of yen)
Fiscal year ended
March 31, 2022
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 sale of property, plant and equipment
Loss (gain) on sale 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
assetsImpairment losses
Loss (gain) on disposal of non-current assets
Gain on insurance claims
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

Fiscal year ended
March 31, 2023
27,64919,716
1,451
102
(121)
(641)
(458)
(460)
(161)

14,424
20,773(1,293)
30
(458)
(759)
(317)
(68)
(145)

(1,043)(1,592)

(203)
1,382

(110)
1,592

115

63

3
820
(36)
(2,218)(6,796)(15,704)(1,207)
8,538(1,928)
(251)

12
607
(22)
(5)
(13,527)(25,407)(4,703)
561
3,074
155

Subtotal

28,547(7,115)Interest and dividends received
Interest paid
Proceeds from insurance income
Compensation for damage received
Compensation for damage paid
Income taxes refund (paid)

1,174(1,386)
36
2,218
(117)
(4,486)

1,441(1,541)22(1)(4,606)

Net cash provided by (used in) operating activities

25,986(11,800)―7―

(Millions of yen)
Fiscal year ended
March 31, 2022
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
Other, net

Fiscal year ended
March 31, 2023

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

(1,301)
1,400(31,916)
135
(146)
718

-

(370)

(201)
187
203
(2,948)

(316)
190
110
(2,261)(33,797)(33,757)(1,787)
6,218

2,116
51,504

Repayments of long-term borrowings
Proceeds from issuance of bonds
Proceeds from issuance of shares
Purchase of shares of subsidiaries not resulting inchange in scope of consolidation
Dividends paid
Dividends paid to non-controlling interests
Decrease (increase) in treasury shares
Other, net(9,150)14,926
1,514(20,827)
4,103

-

(312)

(5,034)(158)(101)(1,307)(5,036)(144)(3)(1,249)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

5,118

30,151

1,267

445(1,424)(14,961)

83,05082,496

870

-

-

21

*1 82,496*1 67,556

Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents due tochanges in the accounting period of consolidated
subsidiaries
Increase (decrease) in cash and cash equivalents due tochanges in the accounting period of consolidated
subsidiaries
Cash and cash equivalents at end of period―8―Notes to Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Significant Matters that Serve as the Basis for Preparing Consolidated Financial Statements)
1. Scope of consolidation(1) The number of consolidated subsidiaries: 56
Tokuyama Asia Pacific Pte. Ltd., which had been a consolidated subsidiary until the previous consolidated fiscal year, has been
excluded from the scope of consolidation because it was absorbed in an absorption-type merger in which Tokuyama Electronic
Chemicals Pte. Ltd. (renamed to Tokuyama Singapore Pte. Ltd. on April 1, 2022), a consolidated subsidiary, was the surviving
company.
Tokuyama Information Service Corporation, which had been a consolidated subsidiary until the previous consolidated fiscal year,
has been excluded from the scope of consolidation because it was absorbed in an absorption-type merger in which the Company is
the surviving company.
Tokuyama Taiwan Marketing & Research Center Co., Ltd. (renamed to Tokuyama Taiwan Corporation on November 11, 2022),
which had been a non-consolidated subsidiary until the previous consolidated fiscal year, has been included in the scope of
consolidation due to the increased materiality.
From the consolidated fiscal year under review, STAC Co., Ltd., a newly established subsidiary, has been included in the scope of
consolidation.
From the consolidated fiscal year under review, ASM Inc. and Super Nano Design Co., Ltd. have been included in the scope of
consolidation due to the acquisition of their shares.
(2) The names, etc., of major non-consolidated subsidiaries
The non-consolidated subsidiary is Tokuyama You You Farm Co., Ltd.
(Reason for excluding these subsidiaries from the scope of consolidation)
The non-consolidated subsidiary is of small size, and none of its total assets, net sales, profit/loss (corresponding to equity
interest), retained earnings (corresponding to equity interest), etc., have any material impact on the consolidated financial
statements.
2. Application of equity method(1) The number of associates accounted for using the equity method: 11(2) The non-consolidated subsidiary that is not accounted for by the equity method (Tokuyama You You Farm Co., Ltd.) and theaffiliates that are not accounted for by the equity method (Oita Mining Co., Ltd. and others) have been excluded from the scope of
consolidation because they have little impact on the consolidated financial statements in terms of profit/loss (corresponding toequity interest), retained earnings (corresponding to equity interest), etc. when they are excluded from the scope of application of
the equity method, nor have any material impact on an aggregate basis.
(3) Of equity method affiliates, with regard to the company of which the last date of its fiscal year is different from the consolidated
fiscal year-end, the financial statements of its fiscal year are used in the preparation of consolidated financial statements.
3. Business year, etc. of consolidated subsidiaries
Of consolidated subsidiaries, the fiscal year-end of ASM Inc. is December 31. The Company used the subsidiary’s financial
statements as of December 31 in the preparation of consolidated financial statements and made adjustments necessary forconsolidation purposes to material transactions arising between that date and the consolidated fiscal year-end.
Of consolidated subsidiaries, Tokuyama Chemicals (Zhejiang) Co., Ltd. and other five companies whose original fiscal year-end is
December 31, are consolidated by performing provisional settlement of accounts on March 31, the consolidated fiscal year-end, incompliance with the regular settlement of accounts.
―9―

4. Significant accounting policies(1) Valuation basis and valuation methods for significant assets(i) Securitiesi) Bonds held to maturity
Stated at cost by the amortized cost method (straight line method).
ii) Available-for-sale securities
Securities other than shares, etc. that do not have a market priceStated at the fair value based on the quoted market price as of the fiscal year-end (Valuation differences are recognizedin net assets; the cost of securities sold is calculated by the moving-average method).
Shares, etc. that do not have a market priceStated at cost by the moving-average method.
(ii) Derivatives
Derivatives are stated at fair value.
(iii) Inventories
Inventories held for sale in the ordinary course of businessStated at cost mainly by the moving-average method. (The balance sheet value of the inventories is calculated by writedown based on the decreased profitability.)(2) Depreciation and amortization methods of significant depreciable and amortizable assets(i) Property, plant and equipment (excluding leased assets)
Buildings and structures acquired on or after April 1, 2016: Depreciated mainly by the straight-line method.
Other than the above: Depreciated mainly by the declining-balance method.
The estimated useful lives of major items are as follows:
Buildings and structures: 2 to 75 years
Machinery, equipment and vehicles: 2 to 20 years(ii) Intangible assets (excluding leased assets)
Amortized mainly by the straight-line method.
Internal use software is amortized by the straight-line method over the internally expected useful life (5 years).
(iii) Leased assets
Leased assets in finance lease transactions that transfer ownership
The Company uses the same depreciation method that is applied to owned fixed assets.
Leased assets in finance lease transactions that do not transfer ownership
Depreciated by the straight-line method based on the assumption that the useful life is equal to the lease term and theresidual value is equal to zero.
(3) Significant allowances and provisions(i) Allowance for doubtful accounts
To cover possible bad debt expenses on trade receivables, loans receivable and others, the allowance for doubtful accounts isprovided at the estimated uncollectable amounts based on the historical default rate for normal receivables, or taking into
account collectability on a case-by-case basis for certain receivables such as doubtful receivables with higher possibility ofdefault.
(ii) Allowance for investment loss
The allowance for investment loss is recorded after considering asset condition and other factors of investees.
(iii) Provision for bonuses
To prepare for the payment of next bonuses to executive officers and employees, provision for bonuses is recorded based on
the portion of the estimated amount of bonus payments attributable to the consolidated fiscal year under review.
(iv) Provision for repairs
Repair expenses are calculated individually and recorded to prepare for periodic repairs of manufacturing facilities.

―10―(v) Provision for decommissioning and removal
Decommissioning and removal expenses are calculated individually and recorded to prepare for decommissioning andremoval of manufacturing facilities.
(vi) Provision for product warranties
For required expenses incurred during the warranty period with free servicing (warranty expenses for free servicing) for
laboratory information systems and laboratory automation systems, the estimated amount of expenses is recorded based on
the historical rate of incurrence (proportion of expenses paid to net sales).
(vii) Provision for loss on compensation for damage
The Company records provisions based on reasonably estimated monetary amounts at the end of the consolidated fiscal year
under review for loss on compensation for damages caused by customer delivery delays and defective products of ion
exchange membranes.
(viii) Provision for environmental measures
The Company records provisions based on estimated amounts at the end of the consolidated fiscal year under review toprepare for payments for environmental measures.
(ix) Provision for loss on disaster
The Company records provisions based on estimated amounts at the end of the consolidated fiscal year under review toprepare for payments required for restoration, etc. of assets damaged by disasters.
(x) Provision for restructuring
The Company records provisions based on estimated amounts to prepare for payments for restructuring.
(xi) Provision for contract loss
The Company records provisions based on estimated amounts of losses to prepare for possible losses that may be incurred infuture contract performance.
(xii) Provision for retirement benefits for directors (and other officers)
At certain consolidated subsidiaries, the amount to be required at the end of the consolidated fiscal year under review inaccordance with internal rules is recorded to prepare for payment of directors’ retirement benefits.
(xiii) Provision for share awards
The Company records estimated amounts for share benefit obligations at the end of the consolidated fiscal year under review
in order to prepare for the Company share benefits provided to directors and other executives based on the Company’s shareissuance rules.
(xiv) Allowance for loss on compensation for building materials
The estimated amount of losses incurred in replacement, renovation, etc. is recorded to prepare for repairs and maintenanceof plastic sashes for houses and buildings (fire protection and resistance grade).
(4) Accounting method of retirement benefits(i) Method of attributing estimated retirement benefits to accounting periods
When calculating retirement benefit obligations, the benefit formula basis is used to attribute estimated retirement benefits tothe period through the end of the consolidated fiscal year under review.
(ii) Amortization of actuarial differences
Actuarial differences are amortized by using the straight-line method over a period of time within the average remaining
service period of employees (14 years) from the subsequent consolidated fiscal year when they are incurred.
(iii) Application of simplified accounting method used by small companies
In calculating retirement benefit liability and retirement benefit expenses, some of the consolidated subsidiaries apply asimplified accounting method in which an assumed amount of benefits to be paid for voluntary base retirement at theconsolidated fiscal year-end is deemed as retirement benefit obligations.
(5) Revenue and expense recognition standards
The Group’s major businesses are the manufacture and sale of products in the Chemicals business, the Cement business, theElectronic Materials business, the Life Science business, and the Eco Business, and its performance obligation is primarily to―11―

supply products to customers.
For sale of products, considering that it is when the product is delivered to or accepted by a customer that the customer gains thecontrol of the product and the performance obligation is fulfilled, the Group recognizes revenue when such performanceobligation is fulfilled. However, for sale of products in Japan, the Group applies the alternative treatment regarding materiality,
etc. and recognizes revenue when the product is shipped with regard to transactions in which the period from when the product isshipped to when the product is delivered to a customer is of normal length.
With respect to transactions in which the Group considers it serves as an agent, the Group recognizes revenue on a net basis (inthe amount of the fees or commissions that the Group expects it will be entitled to receive for the transactions).
The Group receives consideration under sales contracts for the products generally within one year after revenue for the products
is recognized, and it does not contain a significant financing component.
(6) Accounting method for deferred assets
All deferred assets are charged to expenses when incurred.
(7) Translation standards of significant assets or liabilities denominated in foreign currencies into Japanese yen
Monetary receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at theconsolidated balance sheet date and the resulting exchange gains or losses are credited or charged to income as incurred.
Assets and liabilities of overseas subsidiaries and the like are translated into yen at the exchange rate in effect at the consolidatedbalance sheet date, while their revenues and expenses are translated into yen at the average rates of exchange prevailing during
the year. The resulting translation adjustments are included in “Foreign currency translation adjustment” and “Non-controllinginterests” in net assets.
(8) Method of significant hedge accounting(i) Method of hedge accounting
For the method of hedge accounting, in general, the deferral hedge accounting is applied. Among hedging instruments,
forward exchange contracts that fulfill the requirement for allocation method are subjected to the allocation method. Interest
rate swaps that fulfill the requirement for special treatment are subjected to the special treatment.
(ii) Hedging instruments and hedged items
Hedging instruments and hedged items to which hedge accounting has been applied in the fiscal year under review are as
follows:
Hedging instruments: Forward exchange contracts, interest rate swaps
Hedged items: Forecast transactions in foreign currencies, accounts receivable and payable, and borrowings denominated inforeign currencies(iii) Hedging policy
Foreign exchange risk and interest rate risk of hedged items are hedged within a certain range.
(iv) Method of assessing hedge effectivenessHedge effectiveness is assessed by comparing cumulative changes in cash flows or market fluctuations of hedged items andcumulative changes in cash flows or market fluctuations of hedging instruments on a quarterly basis and based on changes inboth, etc. For interest rate swaps to which the special treatment is applied, assessment of hedge effectiveness is omitted.
(9) Amortization method and amortization period of goodwill
Goodwill is equally amortized over five years.
(10) Scope of cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents in the consolidated statements of cash flows consist of cash on hand, at-call deposits with banks andshort-term investments that have maturities within three months from acquisition, are readily convertible to cash and are
subject to an insignificant risk of changes in value.

―12―

(Significant Accounting Estimates)
1. Recoverability of deferred tax assets(1) Deferred tax assets recorded in the consolidated financial statements for the fiscal year under review(Millions of yen)
As of March 31, 2022
Deferred tax assets

As of March 31, 2023

21,111

19,416(2) Information on significant accounting estimates for identified items
The recoverability of deferred tax assets is determined by assessing if deductible temporary differences and tax loss
carryforwards have an effect of reducing the amounts of future tax payments. In the assessment, the Company considers if
sufficient taxable profit before adjustments of temporary differences will be available based on the Company’s profitability, if
sufficient taxable profit before adjustments of temporary differences will be available based on the Company’s tax planning or if
sufficient taxable temporary differences will be available in the future.
In assessing the availability of sufficient taxable profit before adjustments of temporary differences based on the Company’s
profitability, the Company estimates taxable profit for the fiscal year in which temporary differences are expected to reverse, as
well as for carryback and carryforward periods. Taxable profit before adjustments of temporary differences is estimated basedon the Company’s future business plan, which includes material assumptions such as: revenue projections based on estimateddemand for the Company’s products and planned new product launches in the Company’s growth businesses in the areas ofelectronics, health and the environment; market forecasts for coal, the Company’s major raw material and fuel; sale price passthrough to customers; and capital investment in the Company’s growth businesses.
If it becomes necessary to revise these estimates and assumptions due to changes in the actual timings of events and realized
values from estimates as a result of changes in the status of the Company’s business and unforeseeable economic conditions,such as issuance of government policy measures for decarbonization, fluctuations in the price of coal, the Company’s major raw
material and fuel, sale price pass through to customers, etc., it can have a material effect on the amounts of deferred tax assets
and deferred income taxes recognized in the Company’s consolidated financial statements for subsequent fiscal years. In
addition, if the effective tax rate is changed due to tax reforms, it can have a material effect on the amounts of deferred tax
assets and deferred income taxes recognized in the Company’s consolidated financial statements for subsequent fiscal years.
2. Determination on whether or not to recognize impairment losses on property, plant and equipment in the Cement business of
Tokuyama Corporation(1) Property, plant and equipment recorded in the consolidated financial statements for the fiscal year under review(Millions of yen)
As of March 31, 2022
Property, plant and equipment in
the Cement business of
Tokuyama Corporation

17,791

As of March 31, 2023
20,431(2) Information on significant accounting estimates for identified items
The Group groups its non-current assets based on business performance management categories. With regard to assets or asset
groups for which there is any indication of impairment, the Group determines whether or not to recognize impairment losses by
estimating the undiscounted future cash flows to be derived from the assets or asset groups and comparing them to the carrying
amount.
The Cement business of Tokuyama Corporation was determined to have an indication of impairment due to its consecutive
losses from operating activities caused by the impact of the rising price of coal, the Company’s major raw material, and theGroup therefore assessed whether or not to recognize impairment losses. As a result of the assessment, no impairment losses
were recognized as the total undiscounted future cash flows of the Cement business of Tokuyama Corporation exceeded thecarrying amount of the assets.
The undiscounted future cash flows of the Cement business of Tokuyama Corporation are based on the Company’s future―13―

business plan, which includes material assumptions such as market forecasts for coal, the Company’s major raw material for
cement products, sale price pass-through to customers, and estimated demand for the Company’s products.
If it becomes necessary to revise these estimates and assumptions due to changes in the actual timings of events and realized
values from estimates as a result of changes in the status of the Company’s business and unforeseeable economic conditions,such as issuance of government policy measures for decarbonization, fluctuations in the price of coal, the Company’s major raw
material, sale price pass through to customers, etc., it may be necessary to recognize impairment losses on non-current assets in
the Company’s consolidated financial statements for subsequent fiscal years.
(Changes in Accounting Policy)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”) from the beginning of the consolidated fiscal year underreview, and the new accounting policies set forth by the Fair Value Measurement Guidance will be applied in the future inaccordance with the transitional treatment set forth in Paragraph 27-2 of the Fair Value Measurement Guidance. There is no effecton the consolidated financial statements.
(New Accounting Standards Not Yet Applied) “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, October 28, 2022)
 “Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No. 25, October 28, 2022)
 “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, October 28, 2022)(1) Summary
These accounting standards and guidance define the accounting classification of income taxes, etc. in the case of taxation onother comprehensive income and the treatment of tax effects on sales of shares of subsidiaries, etc. in the case of applicationof the group taxation regime.
(2) Scheduled date of application
These accounting standards and guidance are scheduled to be applied from the beginning of the fiscal year ending March 31,
2025.
(3) Impact of application of such accounting standards, etc.
The impact of the application of the “Accounting Standard for Current Income Taxes,” etc. on the consolidated financial
statements is under evaluation at this time.
(Changes in Presentation)(Consolidated Statements of Income)“Outsourcing service income” and “Trial products income,” which were included in “Other” of “Non-operating income” for theprevious consolidated fiscal year, have been separately presented from the consolidated fiscal year under review as the amount ofeach of these items has exceeded 10% of the total amount of non-operating income. The consolidated financial statements for theprevious consolidated fiscal year have been reclassified to reflect these changes in presentation.
As a result, “Other” of ¥4,208 million, which was presented under “Non-operating income” in the consolidated statements ofincome for the previous consolidated fiscal year, has been reclassified as “Outsourcing service income” of ¥618 million, “Trial
products income” of ¥610 million, and “Other” of ¥2,979 million.
“Provision for decommissioning and removals,” which was separately presented under “Non-operating expenses” for the previous
consolidated fiscal year, has been included in “Other” of “Non-operating expenses” from the consolidated fiscal year under review
as the amount of the item has decreased to 10% or less of the total amount of non-operating expenses. The consolidated financial
statements for the previous consolidated fiscal year have been reclassified to reflect this change in presentation.
“Fiduciary obligation expenses,” which was included in “Other” of “Non-operating expenses” for the previous consolidated fiscal―14―

year, has been separately presented from the consolidated fiscal year under review as the amount of the item has exceeded 10% of
the total amount of non-operating expenses. The consolidated financial statements for the previous consolidated fiscal year havebeen reclassified to reflect this change in presentation.
As a result, “Provision for decommissioning and removals” of ¥558 million and “Other” of ¥3,637 million, which were presented
under “Non-operating expenses” in the consolidated statements of income for the previous consolidated fiscal year, have been
reclassified as “Fiduciary obligation expenses” of ¥410 million and “Other” of ¥3,785 million.

(Changes in Accounting Estimates)
Not applicable.
(Additional Information)(Performance-based stock remuneration program)
On September 3, 2018, the Company introduced a performance-based stock remuneration program geared for its directors(excluding directors who are Audit and Supervisory Committee members, non-executive directors, external directors and persons
not resident in Japan) and executive officers (excluding persons not resident in Japan).
1. Transaction summary
For this program, the Company adopted a Director Remuneration BIP (Board Incentive Plan) Trust (hereinafter referred to as“the BIP Trust”). As with performance-linked stock (performance share) remuneration and transfer-limited stock (restricted
stock) remuneration in the United States and Europe, the BIP Trust is a program that grants the Company’s shares and benefits
as well as the cash equivalent to the conversion value of the Company’s shares in accordance with business performance andthe director’s position.
2. The Company’s own shares that remains in trust
The Company’s shares that remain in trust is recorded as treasury shares in the net assets section based on the carrying amount(excluding the amount of incidental expenses) of the trust. The book value and number of shares of the treasury shares are ¥370
million and 122 thousand shares for the previous consolidated fiscal year and ¥366 million and 121 thousand shares for the
consolidated fiscal year under review.

―15―

(Consolidated Balance Sheets)*1 Items corresponding to unconsolidated subsidiaries and affiliates are as follows:
As of March 31, 2022
Investment securities

12,378 million yen

Investments and other assets - other611

As of March 31, 2023
13,761

million yen

667*2 Assets pledged as collateral and liabilities for which collateral is pledged
Assets pledged as collateral are as follows:
As of March 31, 2022
Buildings and structures

As of March 31, 2023

54 million yen－

million yen

Machinery, equipment and vehicles

990

826

Land

188

－

Investment securities

1,100

1,170

Total

2,333

1,996

As of March 31, 2022

As of March 31, 2023

Liabilities for which collateral is pledged are as follows:

Current portion of long-termborrowings
Long-term borrowings
Total

186 million yen

156 million yen

802

645

988

802

*3 Reduction entry
In the consolidated fiscal year under review, reduction entries of ¥1 million for buildings and structures and ¥62 million formachinery, equipment and vehicles were made due to receipt of subsidies, etc.
In addition, as a result of the retirement of machinery, equipment and vehicles that were subject to reduction entry, cumulative
reduction entries decreased by ¥22 million, and as a result of the retirement of tools, furniture and fixtures that were subject toreduction entry, cumulative reduction entries decreased by ¥0 million.
The cumulative reduction entries due to the receipt of subsidies, etc. in association with fixed assets are as follows:
As of March 31, 2022

As of March 31, 2023

Buildings and structures

1,572 million yen

1,574

Machinery, equipment and vehicles

2,668

2,708

Tools, furniture and fixtures

36

35

Intangible assets - other

4

4

4,280

4,322

Total

―16―

million yen

4Guarantee obligation
The Company provides guarantee of obligations concerning loans from financial institutions by the employee and the companies
other than the consolidated ones.
Loan guarantees
As of March 31, 2022
Employees
Chuyo Ready-mixed
Concrete Cooperative
Association
Kasuga Kawauchi Kyodo
Ready Mixed Concrete Co.,
Ltd.
Total

5

As of March 31, 2023
81 million yen

Employees
Chuyo Ready-mixed
Concrete Cooperative
Association
Kasuga Kawauchi Kyodo
Ready Mixed Concrete Co.,
Ltd.

37
15

12
116

Repurchase obligation due to liquidation of notes receivable

Repurchase obligation due toliquidation of notes receivable

1,304 million yen

As of March 31, 2023
1,183

million yen

Notes receivable endorsed
As of March 31, 2022
Notes receivable endorsed

7

34

135

As of March 31, 2022

6

69 million yen

349 million yen

As of March 31, 2023
625 million yen

Long-term power purchase contracts
As of March 31, 2022
Not applicable.
As of March 31, 2023
The Company has entered into a long-term purchase contract with a power generation company for the receipt of electricity.
Such contract is noncancelable before maturity, and losses may be incurred depending on future market conditions and otherfactors.

―17―

(Consolidated Statements of Income)*1 Revenue from contracts with customers
Net sales do not present revenue from contracts with customers and other revenue separately. The amount of revenue fromcontracts with customers are presented in “Notes (Revenue Recognition) 1. Disaggregation of revenue from contracts withcustomers.”*2 Inventories at the consolidated fiscal year-end represent the amount after the book value was reduced in connection with adecline in the profitability, and the following losses on valuation of inventories (the amount in parentheses represents gains onreversal) are included in cost of sales.

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

779 million yen

447 million yen*3 Major items and amounts of selling expenses are as follows:

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Freight-out expenses

26,008 million yen

26,811 million yen

Shipping charges

6,574

6,406

Payroll and allowances

5,098

5,449

Provision for bonuses

555

513

Retirement benefit expenses

165

142

Provision for repairs
Provision of allowance for doubtful
accounts

64

33

7

(1)

*4 Major items and amounts of general and administrative expenses are as follows:

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Technical research expenses

11,314 million yen

12,318 million yen

Payroll and allowances

4,799

4,912

Provision for bonuses

505

486

Retirement benefit expenses
185
139
Provision for retirement benefits for
38
40
directors (and other officers)
Provision for share awards
44
7(Note) Technical research expenses for the previous consolidated fiscal year include provision for bonuses of ¥484 million,
retirement benefit expenses of ¥149 million and provision for repairs of ¥2 million.
Technical research expenses for the consolidated fiscal year under review include provision for bonuses of ¥365
million, retirement benefit expenses of ¥101 million and provision for repairs of ¥6 million.
*5 Total amount of research and development expenses included in general and administrative expenses and production cost

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

12,641 million yen

13,631 million yen―18―

*6 The breakdown of gain on sale of non-current assets is as follows:

Fiscal year ended March 31, 2022
Buildings and structures
Machinery, equipment and vehicles

0 million yen

Fiscal year ended March 31, 2023
1 million yen

174

49

1

13

Land

298

15

Leased assets－

0Intangible assets - other

0

0

474

80

Tools, furniture and fixtures

Total*7 The breakdown of loss on sale of non-current assets is as follows:

Fiscal year ended March 31, 2022
Buildings and structures

1

Machinery, equipment and vehicles

4

million yen

Fiscal year ended March 31, 2023
0 million yen
9Tools, furniture and fixtures

1

2

Land

6

－

14

11

Total
*8 Impairment losses
Fiscal year ended March 31, 2022

The Group groups its assets mainly according to the smallest units independently generating cash flows based on businesscategories. Based on this grouping, impairment losses were recorded for the consolidated fiscal year ended March 31, 2022.
The description of content has been omitted due to the low level of importance.
Fiscal year ended March 31, 2023
The Group groups its assets mainly according to the smallest units independently generating cash flows based on businesscategories. Based on this grouping, impairment losses were recorded for the consolidated fiscal year ended March 31, 2023.
The description of content has been omitted due to the low level of importance.

―19―

(Consolidated Statements of Comprehensive Income)*1

Reclassification adjustments and tax effects relating to other comprehensive income

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

756 million yen

500 million yen

(161)

(138)

595

361

Income tax effectTotal valuation difference on availablefor-sale securities
Deferred gains or losses on hedges:

(278)

105

317

466

Gains arising during the year
Reclassification adjustment to profit orloss
Amount before income tax effect

1

(0)

13

8

Valuation difference on available-for-salesecurities:
Gains arising during the year
Reclassification adjustment to profit orloss
Amount before income tax effect15

7

Income tax effect

(4)

(2)

Total deferred gains or losses on hedges

105

Gains arising during the year
Reclassification adjustment to profit orloss
Total foreign currency translation
adjustment
Remeasurements of defined benefit plans,
net of tax:
Gains arising during the year
Reclassification adjustment to profit orloss
Amount before income tax effect

2,805

584

－

－

2,805

584

(332)

(588)

46

(329)

(285)

(917)

Income tax effectTotal remeasurements of defined
benefit plans, net of tax
Share of other comprehensive income ofentities accounted for using equity method:
Gains arising during the year

86

279

(199)

(637)

50

237

1

1

51

239

2,985

658

Foreign currency translation adjustment:

Reclassification adjustment to profit orloss
Total share of other comprehensive
income of entities accounted for using
equity method
Total other comprehensive income―20―

(Consolidated Statements of Changes in Equity)
Fiscal year ended March 31, 2022
1.

Class and total number of shares issued and class and number of treasury shares
Beginning of year
(Thousands of shares)

Increase during the fiscal Decrease during theyear
fiscal year
(Thousands of shares) (Thousands of shares)

End of year
(Thousands of shares)

Issued shares
Common shares

72,088－－72,088

Total

72,088－－72,088

Common shares(Notes 1, 2, 3)

103

47

13

136

Total

103

47

13

136

Treasury shares(Note 1)
(Note 2)

(Note 3)

2.

The increase in the number of treasury shares of common shares is due to purchase of 3 thousand shares constituting lessthan a share-trading unit and purchase of 44 thousand shares of the Company’s shares related to the BIP Trust account.
The decrease in the number of treasury shares of common shares is a decrease due to the request for additional purchaseof 0 thousand shares constituting less than one share unit and the sale of a portion of the Company’s shares totaling 13
thousand shares held by Director Remuneration BIP Trust.
Included in the number of treasury shares as of the beginning and as of the end of the fiscal year under review are 92
thousand shares and 122 thousand shares, respectively, held by The Master Trust Bank of Japan, Ltd. (executive
compensation BIP trust account; 76,292 accounts).

Dividends(1) Dividend amount paid

Resolution

Class of shares

Dividend
Dividend per share(Millions of yen)
(yen)

Reference date

Effective date

Source ofdividends

Ordinary General
CommonRetained
Meeting of
2,522
35.00 March 31, 2021
June 28, 2021
sharesearnings
Shareholders(June 25, 2021)
Board ofDirectors
CommonSeptember 30,
Retained
Meeting
2,522
35.00
December 1, 2021
shares2021
earnings(October 28,
2021)(Note) Included in the total amount of dividends decided by the Ordinary General Meeting of Shareholders on June 25, 2021 is ¥3
million worth of dividends related to 92 thousand Company shares (treasury shares) held in the executive compensation BIP
trust account. Included in the total amount of dividends decided by the Board of Directors Meeting on October 28, 2021 is ¥4
million worth of dividends related to 122 thousand Company shares (treasury shares) held in the executive compensation
BIP trust account.
(2) Dividends whose record date is within the consolidated fiscal year and whose effective date is in the following consolidated
fiscal year
Resolution

Class ofsharesDividend
Dividend per share(Millions of yen)
(yen)

Reference date

Effective date

Source ofdividends

Ordinary General
Meeting ofCommonRetained
2,522
35.00 March 31, 2022
June 27, 2022
Shareholders
sharesearnings(June 24, 2022)(Note) Included in the total amount of dividends decided by the Ordinary General Meeting of Shareholders on June 24, 2022 is ¥4
million worth of dividends related to 122 thousand Company shares (treasury shares) held in the executive compensation
BIP trust account.

―21―

Fiscal year ended March 31, 2023
1.

Class and total number of shares issued and class and number of treasury shares
Beginning of year
(Thousands of shares)

Increase during the fiscal Decrease during theyear
fiscal year
(Thousands of shares) (Thousands of shares)

End of year
(Thousands of shares)

Issued shares
Common shares

72,088－－72,088

Total

72,088－－72,088

Common shares(Notes 1, 2, 3)

136

1

1

137

Total

136

1

1

137

Treasury shares(Note 1)
(Note 2)
(Note 3)

2.

The increase in the number of treasury shares of common shares is due to purchase of 1 thousand shares constituting lessthan a share-trading unit.
The decrease in the number of treasury shares of common shares is the sale of a portion of the Company’s shares totaling
1 thousand shares held by Director Remuneration BIP Trust.
Included in the number of treasury shares as of the beginning and as of the end of the fiscal year under review are 122
thousand shares and 121 thousand shares, respectively, held by The Master Trust Bank of Japan, Ltd. (executive
compensation BIP trust account; 76,292 accounts).

Dividends(1) Dividend amount paid

Resolution

Class of shares

Dividend
Dividend per share(Millions of yen)
(yen)

Reference date

Effective date

Source ofdividends

Ordinary General
CommonRetained
Meeting of
2,522
35.00 March 31, 2022
June 27, 2022
sharesearnings
Shareholders(June 24, 2022)
Board ofDirectors
CommonSeptember 30,
Retained
Meeting
2,522
35.00
December 1, 2022
shares2022
earnings(October 28,
2022)(Note) Included in the total amount of dividends decided by the Ordinary General Meeting of Shareholders on June 24, 2022 is ¥4
million worth of dividends related to 122 thousand Company shares (treasury shares) held in the executive compensation
BIP trust account. Included in the total amount of dividends decided by the Board of Directors Meeting on October 28, 2022
is ¥4 million worth of dividends related to 121 thousand Company shares (treasury shares) held in the executive
compensation BIP trust account.
(2) Dividends whose record date is within the consolidated fiscal year and whose effective date is in the following consolidated
fiscal year
Resolution

Class ofsharesDividend
Dividend per share(Millions of yen)
(yen)

Reference date

Effective date

Source ofdividends

Ordinary General
Meeting ofCommonRetained
2,522
35.00 March 31, 2023
June 26, 2023
Shareholders
sharesearnings(June 23, 2023)(Note) Included in the total amount of dividends decided by the Ordinary General Meeting of Shareholders on June 23, 2023 is ¥4
million worth of dividends related to 121 thousand Company shares (treasury shares) held in the executive compensation
BIP trust account.

―22―

(Consolidated Statements of Cash Flows)*1 Reconciliation between the balance of cash and cash equivalents at end of period and relevant amount on the consolidatedbalance sheets

Fiscal year ended March 31, 2022
Cash and deposits
Time deposit whose deposit period
exceeds 3 months
Cash and cash equivalents

83,116 million yen

Fiscal year ended March 31, 2023
68,080 million yen

(620)

(523)

82,49667,556(Lease Transactions)(Lessee)(1) Operating lease transactions
Future lease payments related to noncancelable operating lease transactions(Millions of yen)
As of March 31, 2022

As of March 31, 2023

Due within one year

833

578

Due beyond one year

3,730

3,012

4,563

3,590

Total

(Lessor)(1) Operating lease transactions
Future lease income related to noncancelable operating lease transactions(Millions of yen)
As of March 31, 2022

As of March 31, 2023

Due within one year

121

112

Due beyond one year

750

605

871

718

Total

―23―

(Financial Instruments)
1. Matters Regarding Financial Instruments(1) Management policy on financial instruments
The Group raises funds as required (mainly through bank loans and the issuance of corporate bonds) in line with its business
investment program aimed at implementing a customer-oriented approach toward “strengthening the profitability of its
businesses.” The Group invests temporary surplus funds in highly secure financial assets and raises short-term operating capitalwith bank loans and CP (commercial paper). We use derivatives only to hedge risks described below and have a policy of not
implementing derivative transactions for speculative purposes.
(2) Type and risk of financial instruments
Notes and accounts receivable – trade, which are operating receivables, are exposed to credit risks of customers. In addition,although foreign currency-denominated receivables are exposed to foreign exchange fluctuation risk, the Company takes
measures to reduce that risk by managing its foreign currency exposure by letting them be equal to foreign currencydenominated debts and implementing forward exchange contracts on an as needed basis.
Investment securities are mainly shares related to business or capital tie-ups with counterparties, etc., and available for-salesecurities are exposed to the risk of market price fluctuations. In addition, the Group provides long-term loans to counterparties
and others.
Notes and accounts payable – trade, which are operating payables, become due within one year. In addition, although foreign
currency-denominated debts are exposed to foreign exchange fluctuation risk, the Company takes measures to reduce that risk
by managing its foreign currency exposure by letting them be equal to foreign currency-denominated receivables andimplementing forward exchange contracts on an as needed basis.
Borrowings and bonds payable are principally for raising funds necessary for capital investments, and the repayment datecomes up to 55 years after the balance sheet date. Floating rate borrowings are exposed to interest rate risk, some of which are
hedged using derivative transactions (interest rate swaps).
Derivative transactions include forward exchange contracts for the purpose of curbing the foreign exchange fluctuation risks
associated with foreign currency-denominated receivables and payables and forecast transactions, and interest rate swap
transactions for the purpose of fixing the interest rate on borrowings or reducing the interest expenses. With regard to hedging
instruments and hedged items related to hedge accounting, hedge policies and hedge effectiveness evaluation methods, pleaserefer to “(Significant Matters that Serve as the Basis for Preparing Consolidated Financial Statements) 4. Significant accounting
policies (8) Method of significant hedge accounting.”(3) Risk management system for financial instruments(i)Management of credit risk (risk related to default of counterparties, etc.)
With regard to operating receivables and loans receivable, the Company has a division in charge in each businessdepartment monitoring the status of major counterparties regularly and managing maturities and balances for eachcounterparty in accordance with the credit management rules and others, while making efforts to identify early andmitigate any concerns about collection arising from deterioration in the economic environment, its financial position, etc.
Consolidated subsidiaries also conduct similar management as necessary in conformity with the Company’s credit
management rules and others.
In the use of derivative transactions, the Company conducts transactions only with financial institutions with high credit
ratings to mitigate counterparty risk.

(ii)Management of market risk (fluctuation risk of foreign exchange, interest rate, etc.)
On an as needed basis, the Company and some of its consolidated subsidiaries use forward exchange contracts with respect
to the identified currency fluctuation risks of foreign currency-denominated receivables and debts.
In addition, the Company and some of its consolidated subsidiaries use interest rate swaps to reduce the risk of fluctuationsin interest payments on borrowings.
The Company periodically assesses the fair value of securities and investment securities as well as financial conditions of―24―issuers (counterparty companies), etc., and continuously reviews the holding status in view of relationships withcounterparty companies.
With regard to derivative transactions, the Finance & Investment Management Dept. conducts transactions based on theinterest rate risk management policy and foreign exchange risk management policy approved by the Board of Directors,
makes entries and collates the balances with contract partners, etc. For consolidated subsidiaries, the Finance & Investment
Management Dept. also manages derivative transactions by having them report the content of derivative transactions when
they conduct such transactions or by other means.
(iii)

Management of liquidity risk associated with financing (risk of inability to make a payment on due date)
The Company manages liquidity risk through timely preparation and updating of the cash flow management plan by the
Finance & Investment Management Dept. based on reports from each division and the consolidated subsidiaries and by
maintaining liquidity on hand at a certain level and by other means.

(4) Supplemental remarks on fair values of financial instruments
Since variable factors are incorporated in calculation of the fair value, the value may vary depending on different preconditions
adopted. In addition, the contract amounts of derivative transactions described in “2. Fair values of financial instruments”
should not be, in themselves, considered indicative of the market risk associated with derivative transactions.

―25―

2. Fair values of financial instruments
The book value of financial instruments, their fair value, and the differences between the two were as follows.
As of March 31, 2022
Book value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)

(1) Securities and investment securities(i) Held-to-maturity debt securities

1,080

1,079

(0)

(ii) Available-for-sale securities

13,725

13,725－(2) Long-term loans receivable(Note 1)

2,280

2,280

－

Total assets

17,08517,085(0)(1) Bonds payable

15,00015,04545(2) Long-term borrowings (Note 2)

88,77588,81135

Total liabilities

103,775

103,856

80

(136)

(136)

(0)

Derivative financial instruments(Note 3)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)The book value and fair value of long-term loans receivable include the current portion of long-term loans receivable.
The book value and fair value of long-term borrowings include the current portion of long-term borrowings.
Receivables and payables arising from derivative transactions are presented on a net basis, and a value of a net payable
after totaling receivables and payables is shown in parentheses.
The descriptions of “Cash and deposits,” “Notes receivable – trade,” “Accounts receivable – trade,” “Notes and accounts
payable – trade” and “Short-term borrowings” are omitted because with regard to these accounts the fair value
approximates to the book value as they are settled in cash and in a short period of time.
Shares, etc., that have no market price are not included in “(1) Securities and investment securities.” The book values ofthese financial instruments are as follows:Class

As of March 31, 2022 (Millions of yen)

Unlisted shares

2,127

Shares of associates

11,298

Total(Note 6)

13,426

Investments in partnerships and other equivalent entities for which equity interest are recorded on a net basis in the
consolidated balance sheets are not included in (1) Securities and investment securities.” The book value of theinvestments is ¥23 million.

―26―

As of March 31, 2023
Book value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)

(1) Securities and investment securities(i) Held-to-maturity debt securities

1,150

1,126

(23)

(ii) Available-for-sale securities

13,54913,549－(2) Long-term loans receivable(Note 1)

2,401

2,400

(0)

Total assets

17,10017,075(24)(1) Bonds payable

15,00014,819(181)(2) Long-term borrowings (Note 2)

119,740

117,993(1,747)

Total liabilities

134,740

132,812(1,928)

(235)

(235)

－

Derivative financial instruments(Note 3)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)The book value and fair value of long-term loans receivable include the current portion of long-term loans receivable.
The book value and fair value of long-term borrowings include the current portion of long-term borrowings.
Receivables and payables arising from derivative transactions are presented on a net basis, and a value of a net payable
after totaling receivables and payables is shown in parentheses.
The descriptions of “Cash and deposits,” “Notes receivable – trade,” “Accounts receivable – trade,” “Notes and accounts
payable – trade” and “Short-term borrowings” are omitted because with regard to these accounts the fair value
approximates to the book value as they are settled in cash and in a short period of time.
Shares, etc., that have no market price are not included in “(1) Securities and investment securities.” The book values ofthese financial instruments are as follows:Class

As of March 31, 2023 (Millions of yen)

Unlisted shares

2,117

Shares of associates

12,611

Total(Note 6)

14,729Investments in partnerships and other equivalent entities for which equity interest are recorded on a net basis in the
consolidated balance sheets are not included in (1) Securities and investment securities.” The book value of theinvestments is ¥70 million.

―27―

Note 1: Redemption schedule for monetary receivables and securities with maturities after the consolidated balance sheet date
As of March 31, 2022
(Millions of yen)More than 1 More than 5More than 10
Within 1 year year, within 5 years, within
years
10 years
years
Cash and deposits

83,116－－－

Notes receivable - trade

7,212

－

－

－

Accounts receivable - trade

70,989

－

－

－

－

－

1,080

－

185

798

954

341

161,504

798

2,034

341

Securities and investment securities
Held-to-maturity debt securities
Long-term loans receivable
Total

As of March 31, 2023
(Millions of yen)More than 1 More than 5More than 10
Within 1 year year, within 5 years, within
years
years
10 years
Cash and deposits

68,080－－－Notes receivable - trade

8,672

－

－

－

Accounts receivable - trade83,388

－

－

－

－

－

1,150

－

215

930

1,083

172

160,357

930

2,233

172

Securities and investment securities
Held-to-maturity debt securities
Long-term loans receivable
Total

Note 2: Repayment schedule by term for bonds payable, long-term borrowings and other interest-bearing debt after the consolidatedbalance sheet date
As of March 31, 2022
(Millions of yen)More than 1 More than 2 More than 3 More than 4More than 5
Within 1 year year, within 2 years, within 3 years, within 4 years, within 5
years
years
years
years
years
Short-term borrowings

463

－

－

－

－

－

Bonds payable

－

－

－

－

10,0005,000

20,823

1,034

1,199

996

525

64,19521,287

1,034

1,199

996

10,52569,195Long-term borrowings
Total
As of March 31, 2023

(Millions of yen)More than 1 More than 2 More than 3 More than 4More than 5
Within 1 year year, within 2 years, within 3 years, within 4 years, within 5
years
years
years
years
years
Short-term borrowings
Bonds payable
Long-term borrowings
Total

2,491

－

－

－

－

－

－

－

－

10,000

－

5,000

1,407

2,078

2,889

2,397

3,562

107,404

3,898

2,078

2,889

12,397

3,562

112,404―28―

3. Fair value information on financial instruments by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to the observability and materiality of
inputs used to measure fair value.
Level 1 fair value:

Fair value measured using (unadjusted) quoted prices in active markets for the same assets or liabilities

Level 2 fair value:

Fair value measured using directly or indirectly observable inputs other than Level 1 inputs

Level 3 fair value:

Fair value measured using unobservable material inputs

If multiple inputs are used that are significant to the fair value measurement, the fair value measurement is categorized in its entirety
in the level of the lowest level input that is significant to the entire measurement.
(1) Financial instruments recorded at fair value in the consolidated balance sheets
Fiscal year ended March 31, 2022
Class

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
Equity securities

13,725－－

13,725

13,725－－

13,725

Forward exchange contracts

－

123

－

123

Interest

－

12

－

12

－

136

－

136

Total assets
Derivative financial instruments

Total liabilities
Fiscal year ended March 31, 2023
Class

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
Equity securities

13,549－－13,54913,549－－13,549Forward exchange contracts

－

230

－

230

Interest

－

4

－

4

－

235

－

235

Total assets
Derivative financial instruments

Total liabilities(2) Financial instruments other than the financial instruments recorded in fair value in the consolidated balance sheets
Fiscal year ended March 31, 2022
Class

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Held-to-maturity debt securities
Bonds of associates
Long-term loans receivable

－

1,079

－

1,079

－

2,280

－

2,280

－

3,359

－

3,359

Bonds payable－

15,045－15,045Long-term borrowings－

88,811－

88,811

Total assets

Derivative financial instruments
Interest
Total liabilities

－

0

－

0

－

103,856－

103,856―29―

Fiscal year ended March 31, 2023
Class

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Held-to-maturity debt securities
Bonds of associates

－

1,126

－

1,126

Long-term loans receivable

－

2,400

－

2,400

－

3,526

－

3,526

Bonds payable

Total assets－

14,819－14,819Long-term borrowings－

117,993－

117,993－

132,812－

132,812

Total liabilities(Note) Description of the valuation techniques and inputs used in the fair value measurement
Securities and investment securities
Listed shares are valued using quoted prices. As listed shares are traded in active markets, their fair value is classified as Level 1 fairvalue. On the other hand, the fair value of the bonds payable held by the Company are classified as Level 2 fair value as the bonds
are private placement bonds and do not have a market, and the total amount of their principal and interest is, therefore, calculated by
the discounted present value method using an interest rate that is determined by replacing the level of interest rates at the time ofissuance of the bonds with the level of interest rates at a fiscal year end.
Derivative financial instruments
The fair values of the interest rate swaps and forward exchange are measured using prices offered by counterparty financial
institutions, etc., and are classified as Level 2 fair value.
Long-term loans receivable
Because long-term loans receivable with floating interest rates reflect market interest rates in a short period, and credit standing ofborrowers has not changed significantly since the loans were executed, their fair value is based on the book value and is classified
as Level 2 fair value. In addition, the fair value of the long-term loans receivable with fixed interest rates is classified as Level 2 fairvalue as they are loans to subsidiaries and do not have a market, and the total amount of their principal and interest is, therefore,
calculated by the discounted present value method using the loan interest at a fiscal year end.
Bonds payable
The fair value of bonds issued by the Company is measured using quoted prices, but as the bonds are not traded frequently in markets
and the quoted prices, therefore, cannot be considered quoted prices in active markets, the fair value of the bonds is classified as
Level 2 fair value.
Long-term borrowings
Of the long-term borrowings, those with floating interest rates reflect market interest rates in a short period, and there has been no
significant change in the Company’s credit standing since the execution of the borrowing. Therefore, it is considered that the fairvalue of those long-term borrowings approximates the book value. Accordingly, the fair value of those long-term borrowings ismeasured using book value and is classified as Level 2 fair value. The fair value of the long-term borrowings with fixed interest rates
is classified as Level 2 fair value as the total amount of their principal and interest is calculated by the discounted present value
method using an interest rate that is expected to be applied when similar borrowing is newly executed.

―30―

(Securities)
1. Trading securities
Not applicable.
2. Held-to-maturity debt securities
Fiscal year ended March 31, 2022
Book value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)Held-to maturity debt
securities with fair values notexceeding book values
Corporate bonds

1,080

1,079

(0)

Fiscal year ended March 31, 2023
Book value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)Held-to maturity debt
securities with fair values notexceeding book values
Corporate bonds

1,150

1,126

(23)

3. Available-for-sale securities
As of March 31, 2022
Book value(Millions of yen)

Acquisition cost
(Millions of yen)

Unrealized gain
(Millions of yen)

Securities with book values
exceeding acquisition costs
Equity securities

13,209

7,679

5,530

Debt securities

－

－

－

Other

－

－

－

13,209

7,679

5,530

Equity securities

516

635

(119)

Debt securities

－

－

－

Other

－

－

－

Subtotal

516

635

(119)

Total

13,725

8,314

5,411

Subtotal
Securities with book values
not exceeding acquisition
costs

―31―

As of March 31, 2023
Book value(Millions of yen)

Acquisition cost
(Millions of yen)

Unrealized gain
(Millions of yen)

Securities with book values
exceeding acquisition costs
Equity securities

13,146

7,348

5,797

Debt securities

－

－

－

Other

－

－

－

13,146

7,348

5,797

Equity securities

403

436

(33)

Debt securities

－

－

－

Other

－

－

－

Subtotal

403

436

(33)

Total

13,549

7,784

5,764

Subtotal
Securities with book values
not exceeding acquisition
costs

―32―

4. Available-for-sale securities soldFiscal year ended March 31, 2022
Sales amount(Millions of yen)
Equity securities

Total gain on sale(Millions of yen)

Total loss on sale(Millions of yen)

247

161

－

Government andmunicipal bonds

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

247

161

－

Debt securities

Other
Total

Fiscal year ended March 31, 2023
Sales amount(Millions of yen)
Equity securities

Total gain on sale(Millions of yen)

Total loss on sale(Millions of yen)

719

145

0

Government andmunicipal bonds

－

－

－

Corporate bonds

－

－

－

Other

－

－

－

－

－

－

719

145

0

Debt securities

Other
Total

5. Impairment of marketable securities
During the previous consolidated fiscal year, an impairment of ¥19 million was made for securities (equity securities of availablefor-sale securities). In making impairments of stocks that decline 30% to 50%, the Company makes a comprehensive assessment foreach individual issue by considering the stock price movements over the past two years and quantitatively evaluating credit risk by
examining various figures based on the published financial statements.

―33―

(Derivatives)
1. Derivative transactions to which hedge accounting is not applied(1) Currency-related derivatives
As of March 31, 2022
Not applied Hedge
accounting method
Principle-based
accounting

Transaction type

Main hedged items

Notional value(Millions of yen)

Maturing after one
Fair value
year(Millions of yen)
(Millions of yen)

Forward exchange
contracts
Short position, TWD

Long-term
borrowings

Total

2,139

2,139

(123)

2,139

2,139

(123)

As of March 31, 2023
Not applied Hedge
accounting method
Principle-based
accounting

Transaction type

Main hedged items

Notional value(Millions of yen)

Maturing after one
Fair value
year(Millions of yen)
(Millions of yen)

Forward exchange
contracts
Short position, TWD

Long-term
borrowings

Total(2) Interest
Not applicable.
2. Derivative transactions to which hedge accounting is applied(1) Currency-related derivatives
As of March 31, 2022
Not applicable.
As of March 31, 2023
Not applicable.

―34―

2,139

1,772

(230)

2,139

1,772

(230)

(2) Interest
As of March 31, 2022
Hedge accounting
methodTransaction type

Main hedged items

Notional value(Millions of yen)

Maturing after one
Fair value
year(Millions of yen)
(Millions of yen)Interest rate swaps
Principle-based
accounting

Pay fixed rate, receive
floating rateLong-term
borrowings

Subtotal

1,000

600

(12)

1,000

600

(12)

30

－

(0)

30

－

(0)

1,030

600

(12)

Interest rate swaps
Special treatment
for interest rate
swaps

Pay fixed rate, receive
floating rateLong-term
borrowings

Subtotal
Total
As of March 31, 2023
Hedge accounting
methodTransaction type

Main hedged items

Notional value(Millions of yen)

Maturing after one
Fair value
year(Millions of yen)
(Millions of yen)Interest rate swaps
Principle-based
accounting

Pay fixed rate, receive
floating rateLong-term
borrowings

Subtotal
Total

―35―

600

200

(4)

600

200

(4)

600

200

(4)

(Retirement Benefits)
1. Outline of adopted retirement benefit plans
The Company and its consolidated domestic subsidiaries have lump-sum severance benefits plans and defined benefit pension plans
as a vested benefits system (DB scheme). They also have defined contribution pension plans as DC scheme. The Company and its
consolidated domestic subsidiaries may pay, under certain circumstances, extra retirement allowances when their employees leave thecompanies. The Company has a retirement benefit trust.
2. Defined benefit plans(1) Reconciliation of beginning and ending balances of retirement benefit obligations

Fiscal year ended March 31, 2022
Balance of defined benefit
obligations at beginning of year
Service cost
Interest cost
Occurrence of actuarial gain andloss
Payments of retirement benefits

17,047 million yen

Fiscal year ended March 31, 2023
17,202 million yen

877

922

124

125

191

7

(1,045)(1,063)

Other
8
(0)
Balance of defined benefit
17,202
17,193
obligations at end of year
(Note) The consolidated domestic subsidiaries, except for two companies, have adopted the simplified accounting method in
calculating retirement benefit obligations.
(2) Reconciliation of beginning and ending balances of pension assets

Fiscal year ended March 31, 2022
Balance of pension assets at
beginning of year
Expected return on pension assets
Occurrence of actuarial gain andloss
Corporation’s contributions
Payments of retirement benefits
Balance of pension assets at end ofyear

25,717 million yen

Fiscal year ended March 31, 2023
25,603 million yen

279

278

(141)

(580)

608

612

(860)

(810)

25,60325,102―36―

(3) Reconciliation of ending balances of retirement benefit obligations and pension assets to retirement benefit liability
and retirement benefit asset recorded in the consolidated balance sheets

As of March 31, 2022

As of March 31, 2023

Funded defined benefit obligations

15,121 million yen

15,079 million yen

Pension assets(25,603)(25,102)(10,482)(10,023)

Unfunded defined benefit obligations

2,081

2,113

Net amount shown on consolidatedbalance sheets(8,400)(7,909)Retirement benefit liability

2,081

2,113

Retirement benefit asset(10,482)(10,023)

Net amount shown on consolidatedbalance sheets(8,400)(7,909)(4) Retirement benefit expenses and a breakdown of the retirement benefit expenses

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Service cost (Note)

877 million yen

922 million yen

Interest cost

124

125

Expected return on pension assets

(279)

(278)

Expensed actuarial gain and loss
46
(329)
Retirement benefit expenses
768
440
regarding to vested benefits system(Note) Retirement benefit expenses of the consolidated domestic subsidiaries that have adopted the simplified accounting
method are included in “Service cost.”(5) Remeasurements of defined benefit plans
A breakdown of items recorded in remeasurements of retirement benefit plans (before deduction of tax effects) is as follows:

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Actuarial gain and loss

(285) million yen(917) million yen

Total

(285)

(917)

(6) Accumulated adjustment of retirement benefit plans
A breakdown of items recorded in accumulated adjustment of retirement benefit plans (before deduction of tax effects) is asfollows:

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Unrecognized actuarial gain and loss

3,622 million yen

2,704 million yen

Total

3,622

2,704

―37―

(7) Matters relating to pension assets(i) Principal items of pension assets
The proportion of each principal category to the total of pension assets is as follows:
As of March 31, 2022

As of March 31, 2023

Domestic stocks

7 %

5 %

Foreign stocks

8

4

Domestic bonds

43

44

Foreign bonds

15

13

Insurance product (General account)17

21

Deposits

9

12

Other

0

1

Total

100

100

(Note) Total of pension assets as of March 31, 2022 and March 31, 2023 included a retirement benefit trust, established for
the Company’s pension plans that represented 9% and 10% of the total of pension assets, respectively.
(ii) Method for setting the expected long-term rate of return
The expected long-term rate of return on pension assets has been set based on the allocation of the pension assets as well as
the current and expected rate of return from each category of the pension assets.
(8) Matters relating to the basis for calculation used in the actuarial calculation
Main basis for calculation used in the actuarial calculation (principally represented by the rate used)
As of March 31, 2022

As of March 31, 2023

0.8 %

0.8 %

1.2

1.2

Discount rate
Expected long-term return on pension
assets3.

Defined contribution plans
The amount which the Company and its consolidated subsidiaries were required to contribute to the defined contribution plans was¥564 million for the previous consolidated fiscal year and ¥557 million for the consolidated fiscal year under review.

(Stock Options)
Although some consolidated subsidiaries have stock option plans, the description is omitted due to the low level of importance.

―38―

(Tax Effect Accounting)
1. Breakdown of deferred tax assets and liabilities by their main occurrence causes
As of March 31, 2022
Deferred tax assets:

As of March 31, 2023

(Millions of yen)

(Millions of yen)

Deficits (Note 2)

44,08444,505

Provision for repairs

2,449

1,893

Excess depreciation and amortization

1,977

1,792

Investment securities

1,347

1,347

Provision for bonuses

1,097

858

Retirement benefit liability

754

765

Inventories

681

705

Other

2,977

3,223

55,37055,091

Valuation allowance (Deficits) (Note 2)(23,862)(25,514)

Valuation allowance (Temporary difference)(3,368)(3,139)(27,231)(28,654)

28,13926,436(3,005)(2,865)(1,571)(1,465)(1,111)(1,311)

(994)

(974)

Subtotal of deferred tax assets

Less valuation allowance (Note 1)
Total deferred tax assets
Deferred tax liabilities:
Prepaid pension costs
Valuation difference on available-for-salesecurities
Retained earnings of subsidiaries and affiliates
Reserve for tax purpose reduction entry

(592)

(631)

Total deferred tax liabilities

Other(7,275)(7,248)Net deferred tax assets

20,863

19,188(Note 1) Valuation allowance increased by ¥1,423 million. This increase is primarily due to an increase of ¥1,651 million in
valuation allowance (deficits) related to expiration.
(Note 2) Amounts of deficits and related deferred tax assets by tax loss carry-forwards were as follows.
As of March 31, 2022
(Millions of yen)More than More than More than More thanWithin 1
1 year,2 years,
3 years,
4 years, More thanyear
within 2 within 3 within 4 within 5
5 years
years
years
years
years

Total

Deficits (Note 1)

318

200

576

10,497

31,979511

44,084

Valuation allowance

(303)

(191)

(513)

(223)

(22,178)(452)(23,862)

Deferred tax assets

15

9

62

10,2739,801

59(Note 2) 20,221(Note 1) Deficits are the amount after multiplying the statutory tax rate.
(Note 2) Regarding deficits of ¥44,084 million (amount after multiplying the statutory tax rate), the Company recorded
deferred tax assets of ¥20,221 million.
Regarding deficits, valuation allowance related to the portion deemed to be recoverable based on future taxable
income forecasts is not recognized.

―39―

As of March 31, 2023
(Millions of yen)More than More than More than More thanWithin 1
1 year,2 years,
3 years,
4 years, More thanyear
within 2 within 3 within 4 within 5
5 years
years
years
years
years

Total

Deficits (Note 3)

280

593

10,001

32,00059

1,570

44,505

Valuation allowance

(181)

(200)

(706)

(23,275)(59)(1,090)(25,514)

Deferred tax assets

99

392

9,295

8,724

－

480

(Note 4) 18,991(Note 3) Deficits are the amount after multiplying the statutory tax rate.
(Note 4) Regarding deficits of ¥44,505 million (amount after multiplying the statutory tax rate), the Company recorded
deferred tax assets of ¥18,991 million.
Regarding deficits, valuation allowance related to the portion deemed to be recoverable based on future taxable
income forecasts is not recognized.
2. Reconciliation of significant difference between the statutory tax rate and the effective income tax rate after applying tax effectaccounting
As of March 31, 2022

As of March 31, 2023

30.5 %

30.5 %

(3.2)

(9.4)

(30.0)

8.4

2.5

7.2

(1.1)

(3.3)

0.2

(2.4)

(2.9)

(1.4)

0.8

1.4

－

1.2

1.3

3.0

(1.9)

35.1

Statutory tax rate
Increase (decrease) in income taxes resulting from:
Dividend and other items excluded permanently
from taxable income
Change in valuation allowance allocated to income
tax expenses
Inter-company eliminations of dividends income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Inter-company eliminations of allowance forinvestment loss
Effect of tax credits
Retained earnings of subsidiaries and affiliates
Amount affected by absorption-type mergers ofsubsidiaries
Other
Effective income tax rate

3. Accounting treatment of corporation tax, local corporate tax, or tax effect accounting related to these taxes
The Company and some of its domestic consolidated subsidiaries have applied the group tax sharing system from theconsolidated fiscal year under review. In addition, the Company and those domestic consolidated subsidiaries have adopted theaccounting treatment and disclosure of corporation tax, local corporate tax, or tax effect accounting related to these taxes inaccordance with the “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System” (ASBJ PITF
No. 42, issued on August 12, 2021).

―40―

(Business Combination)
Description of content has been omitted due to a lack of importance.
(Asset Retirement Obligations)
1. Asset retirement obligations included in the consolidated balance sheets
The Group has obligations to restore a site to its original state at the time of leaving or termination of the business and aftertermination of mining for branches, etc., that use an office under a real estate lease agreement or certain business offices that use aplant or site for sales facilities, as well as mines. Of these obligations, for certain obligations to restore a site to its original state at
the time of leaving under a building lease agreement for which the timing of performance and amount can be reasonably estimatedat the present moment, asset retirement obligations have been recorded. The note on the content of asset retirement obligations isomitted because of immateriality.
2. Asset retirement obligations not included in the consolidated balance sheets
Because past records other than those stated in 1. above are poor, the period of use of the leased asset related to the obligations is
uncertain, and there is no plan for relocation, etc., or mine closure at the present moment, it is difficult to reasonably estimate thetiming, scope and probability of execution for the obligations. Therefore, asset retirement obligations corresponding to the
obligations have not been recorded.
(Investment and Rental Properties)
Information is omitted because of immateriality of the total amount of investment and rental properties.
(Revenue Recognition)
1. Disaggregation of revenue from contracts with customers
For the disaggregation of revenue from contracts with customers, please refer to “Note (Segment Information).”
2. Useful information in understanding revenue from contracts with customers
For useful information in understanding revenue, please refer to “Note (Significant Matters that Serve as the Basis for Preparing
Consolidated Financial Statements) 4. Significant accounting policies (5) Revenue and expense recognition standards.”
3. Relations between the fulfillment of performance obligations under contracts with customers and cash flows generated from thosecontracts, and information on the amount of revenue from those contracts existing as of the end of the consolidated fiscal year underreview that is expected to be recognized in and after the next consolidated fiscal year and on the timing of recognition(1) Balances of contract assets and contract liabilities, etc.
The descriptions of the Group’s contract assets and contract liabilities are omitted as the balances of these accounts are of minor
importance and there has been no major change in the balances. The amount of revenue recognized in the consolidated fiscal year
under review from the performance obligations that were fulfilled (or partially fulfilled) in previous periods is immaterial.
(2) Transaction price allocated to the remaining performance obligations
The Group has applied a practical expedient and omits the description of the remaining performance obligations as the Group
has no important transaction for which the contract term is expected to exceed one year. In addition, of the consideration generated
from contracts with customers, there is no significant amount of consideration that is not included in the transaction price.

―41―

(Segment Information)
Business segment information
1. Summary of reportable segments
The reportable segments in the Company are defined as individual units, where separate financial information is available and which
are subject to regular review to evaluate their results and decide the allocation of management resources by the board of directors.
The Company has business divisions by product group, and conducts business operations through each business division devising its
comprehensive product strategy for domestic and overseas markets.
The Company is, therefore, composed of reportable segments by product group based on business divisions and has five reportablesegments, “Chemicals,” “Cement,” “Electronic Materials,” “Life Science,” and “Eco Business.”
Main products and services of each reportable segment are as follows:
Reportable segment

Major 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
Life Science
Eco Business

Polycrystalline silicon, fumed silica, tetrachlorosilane, aluminum nitride, high-purity isopropyl
alcohol for electronics manufacturing, photoresist developer and isopropyl alcohol for
manufacturing
Medical diagnosis systems, dental materials and equipment, pharmaceutical ingredients andintermediates, plastic lens-related materials for glasses and microporous film
Ion exchange membranes, plastic window sashes and waste gypsum board recycling,

2. Calculation of net sales, profit (loss), assets and other items by reportable segment
The accounting methods applied to reportable segments are identical to those stated in “(Significant Matters that Serve as the Basisfor Preparing Consolidated Financial Statements).”
Inter-segment sales or transfer are based on market prices.
Reportable segment’s profit (loss) is based on operating profit.

―42―

3. Information on net sales, profit (loss), assets and other items by reportable segment and on the disaggregation of revenue
Fiscal year ended March 31, 2022
(Millions of yen)
Reportable segment
Chemicals Cement

Electronic
Life
Materials Science

Eco
Business

Others(Note 1)

Total

Adjustment(Note 2)

Consolidated(Note 3)

Net sales
Sales to customers

101,093

49,67974,33233,4399,935

25,349293,830－

293,830

Inter-segment
sales/transfer

388

687

664

125

370

10,953

13,188(13,188)－

Total sales

101,482

50,36674,99633,564

10,30536,302

307,018(13,188)

293,830

Segment profit (loss)

14,225(1,912)

7,232

6,036

(468)

3,851

28,964(4,425)24,539Segment assets

59,47258,67091,00839,294

12,36460,593

321,403111,807433,210

Other items
Depreciation and
2,969
3,953
4,952
1,361
605
4,177
18,0201,696
19,716amortization (Note 4)
Increase in property,
plant and equipment
4,891
4,806
14,348
1,657
924
5,238
31,865
3,190
35,056and intangible assets(Note 5)(Note 1)The “Others” segment comprises businesses other than those of the reportable segments and includes overseas sales
business, a distribution business, a real estate business, etc.
(Note 2)Adjustments are as follows:(i) The segment profit (loss) 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.
(ii) The segment assets adjustment amount includes ¥149,158 million of corporate assets that are not allocated to a
specific reportable segment.
(Note 3)
Segment profit (loss) is adjusted for operating profit in the consolidated financial statements.
(Note 4)
Depreciation and amortization includes amortization of long-term prepaid expenses.
(Note 5)
Increase in property, plant and equipment and intangible assets includes the amount of increase in long-term prepaid
expenses.
(Note 6)Regarding net sales, revenue from contracts with customers and other revenue are not presented separately as the amountof other revenue is immaterial.

―43―

Fiscal year ended March 31, 2023
(Millions of yen)
Reportable segment
Chemicals Cement

Electronic
Life
Materials Science

Eco
Business

Others(Note 1)

Total

Adjustment(Note 2)

Consolidated(Note 3)

Net sales
Sales to customers

115,866

57,78590,87637,543

13,597

36,121

351,790－351,790

Inter-segment
sales/transfer

397

725

713

23

245

11,20913,314(13,314)－

Total sales

116,263

58,511

91,58937,567

13,84247,331365,105(13,314)351,790

Segment profit (loss)

6,887(3,718)

7,011

7,377

46

2,036

19,640(5,303)

14,336

Segment assets

66,147

66,382

115,317

43,987

14,51570,990377,340

101,001

478,342

Other items
Depreciation and
3,317
3,848
5,634
1,399
640
3,847
18,686
2,087
20,773amortization (Note 4)
Increase in property,
plant and equipment
4,571
6,374
14,113
1,359
2,125
4,092
32,636
4,054
36,690and intangible assets(Note 5)(Note 1)The “Others” segment comprises businesses other than those of the reportable segments and includes overseas sales
business, a distribution business, a real estate business, etc.
(Note 2)Adjustments are as follows:(i) The segment profit (loss) 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.
(ii) The segment assets adjustment amount includes ¥139,726 million of corporate assets that are not allocated to a
specific reportable segment.
(Note 3)
Segment profit (loss) is adjusted for operating profit in the consolidated financial statements.
(Note 4)
Depreciation and amortization includes amortization of long-term prepaid expenses.
(Note 5)
Increase in property, plant and equipment and intangible assets includes the amount of increase in long-term prepaid
expenses.
(Note 6)Regarding net sales, revenue from contracts with customers and other revenue are not presented separately as the amountof other revenue is immaterial.

―44―Related information
Fiscal year ended March 31, 2022
1. Information by product and service
Information is omitted as identical information is disclosed in segment information.
2. Information by region(1) Net sales(Millions of yen)
Japan

Asia
206,515

Others71,928

Total
15,386

293,830(Note) Net sales are categorized into countries or regions based on the location of customers.
(2) Property, plant and equipment(Millions of yen)
Japan

Asia
118,952

Others
19,236

Total
1,413

139,602

3. Information by major customer
Information is omitted because no external customer accounts for 10% or more of net sales in the consolidated statements
of income.
Fiscal year ended March 31, 2023
1. Information by product and service
Information is omitted as identical information is disclosed in segment information.
2. Information by region(1) Net sales(Millions of yen)
Japan

Asia
250,026

Others79,204

Total
22,559351,790(Note) Net sales are categorized into countries or regions based on the location of customers.
(2) Property, plant and equipment(Millions of yen)
Japan

Asia
125,292

Others28,558

Total
1,485

155,336

3. Information by major customer
Information is omitted because no external customer accounts for 10% or more of net sales in the consolidated statements
of income.

―45―

Information on impairment losses on non-current assets by reportable segment
Fiscal year ended March 31, 2022
(Millions of yen)
Chemicals
Impairment
lossesCement－Electronic
Materials－

Life Science Eco Business3－

Others－Adjustment
－

Total
3

－

Fiscal year ended March 31, 2023
(Millions of yen)
Chemicals
Impairment
lossesCement－Electronic
Materials－

Life Science Eco Business
12－

Others－Adjustment
－

Total
12

－

Information on amortization of goodwill and unamortized balance reportable segment
Fiscal year ended March 31, 2022
(Millions of yen)
Chemicals
Amortizationof goodwill
Unamortizedbalance

CementElectronic
Materials

Life Science Eco Business

OthersAdjustment

Total

－

18

－

－

－

－

－

18

－

68

－

－

－

－

－

68

Fiscal year ended March 31, 2023
(Millions of yen)
Chemicals
Amortizationof goodwill
Unamortizedbalance

CementElectronic
Materials

Life Science Eco Business

OthersAdjustment

Total

－

18

－

15

－

249

－

284

－

49

－

300

－

－

－

349

(Note) The amount of “Other” is related to other related businesses.
Information on gain on bargain purchase by reportable segment
Fiscal year ended March 31, 2022
Not applicable.
Fiscal year ended March 31, 2023
Not applicable.
Information on related parties
Fiscal years ended March 31, 2022 and 2023
Not applicable.

―46―

(Per Share Information)

Item

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Net assets per share (yen)3,120.25

3,189.01

Earnings per share (yen)389.09130.15

Not applicable because there are no
dilutive shares.

Diluted earnings per share (yen)Not applicable because there are no
dilutive shares.

(Note 1) The basis for calculation
1. Net assets per share
Item

As of March 31, 2022

As of March 31, 2023

Total net assets on consolidated balance sheets (Millionsof yen)232,917

241,602

Net assets related to common shares (Millions of yen)

224,506

229,450

8,411

12,151

72,08872,088136

137

71,951

71,950Major breakdown of difference (Millions of yen)
Non-controlling interests
Number of shares outstanding of common shares(Thousands of shares)
Number of treasury shares of common shares(Thousands of shares)
Number of common shares used to calculate net assets
per share (Thousands of shares)
2. Earnings per share

Fiscal year ended
March 31, 2022

Item
Profit attributable to owners of parent (Millions of yen)

(Note 2)28,000Fiscal year ended
March 31, 2023
9,364

Amount not attributable to common shareholders－－(Millions of yen)
Profit related to common shares attributable to owners
28,0009,364
of parent (Millions of yen)
Average number of common shares during the period
71,963
71,951(Thousands of shares)
The Company shares held in the executive compensation BIP (Board Incentive Plan) trust are included in treasury sharesdeducted from the total number of shares issued at the end of the consolidated fiscal year in calculating “net assets per
share.” The number of the Company shares held in the executive compensation BIP trust at the end of the consolidated
fiscal year under review was 121 thousand shares. (The number of the Company shares at the end of the previous fiscal
year was 122 thousand shares)
The Company shares held in the executive compensation BIP trust are included in treasury shares deducted whencalculating the average number of common shares for the consolidated fiscal year. Of note, the average number of theCompany shares for the consolidated fiscal year under review held in the executive compensation BIP trust is 121
thousand shares (the average number of the Company shares for the previous consolidated fiscal year was 111 thousand
shares.)(Significant Subsequent Events)
Not applicable.

―47―

(v) Annexed consolidated detailed schedules
Schedule of bonds payable
as ofBalance as of Balance
Interest
March 31,
April
1,
2022
rate
CollateralCompany
Issue2023(Millions of (Millions of
(%)
yen)
yen)
25th unsecured straightMarch 1,
10,00010,000Tokuyama
0.370
No
bonds
2022
(－)
(－)
26th unsecured straightMarch 1,
5,000
5,000
Tokuyama
0.600
No
bonds
2022
(－)
(－)
15,00015,000
Total
―
―
―
(－)
(－)
(Note 1)
Amounts in parentheses represent amounts due within one year.
(Note 2)
Amounts of redemption within five years after the consolidated balance sheet date are as follows:
Date ofissuance

Within 1 year
(Millions of yen)－

Term ofredemption
March 1,2027
March 1,
2032―

More than 1 year,
within 2 years(Millions of yen)More than 2 years,
within 3 years(Millions of yen)More than 3 years,
within 4 years(Millions of yen)More than 4 years,
within 5 years(Millions of yen)－－

10,000－

Schedule of borrowings
Balance as ofApril 1, 2022
(Millions of yen)
Short-term borrowings

Balance as ofMarch 31, 2023 Average interest rate(%)
(Millions of yen)

Repayment date

463

2,491

1.15

―

Current portion of long-termborrowings

20,823

1,407

1.18

―

Current portion of lease obligations

1,225

1,196

－

―

67,951

118,333

1.18

2024 - 2078

3,754

4,019

－

2024 - 2062

94,219127,447－―

Long-term borrowings (excluding
current portion of long-termborrowings)
Lease obligations (excluding current
portion of lease obligations)
Total(Note 1)
(Note 2)
(Note 3)

“Average interest rate” shows the weighted average interest rate on the ending balance of borrowings, etc.
The average interest rate on lease obligations is not presented because lease obligations are recorded at the amount
before deduction of the amount equivalent to interest included in total lease payments, in the consolidated balance sheets.
The amounts of long-term borrowings, and lease obligations (excluding current portion of them) to be repaid within five
years after the consolidated balance sheet date are as follows:

Long-term
borrowings
Lease obligations

More than 1 year,
within 2 years(Millions of yen)More than 2 years,
within 3 years(Millions of yen)More than 3 years,
within 4 years(Millions of yen)More than 4 years,
within 5 years(Millions of yen)

2,078

2,889

2,397

3,562

980

743

545

367

―48―

Schedule of asset retirement obligations
Information is omitted since the amounts of asset retirement obligations at the beginning and end of the consolidated fiscal year
under review are 1% or less of the total of liabilities and net assets at the beginning and end of the consolidated fiscal year underreview.
(2) Others
Quarterly information for the consolidated fiscal year ended March 31, 2023
Accumulated period

1Q

Net sales (Millions of yen)

2Q
84,017

166,370259,010351,790

7,070

10,713

13,17014,424

4,482

6,565

8,526

9,364

62.29

91.25

118.51130.15

Profit before income taxes(Millions of yen)
Profit attributable to owners ofparent (Millions of yen)
Earnings per share (yen)Accumulated period

Current consolidated
fiscal year

3Q

1Q

Earnings per share (yen)

2Q
62.29

Current consolidated
fiscal year

3Q
28.95

27.26

11.65

(Note) The Company records shares held in the executive compensation BIP (Board Incentive Plan) trust as treasury shares. In
addition, said shares are included in treasury shares deducted when calculating the average number of shares for the fiscal year
based on calculations of earnings per share.

―49―