Summary of Consolidated Financial Statements
for the Fiscal Year Ended March 31, 2020(Japan GAAP)May 11, 2020
Name of Listed Company: TSUMURA & CO.
Exchange: Tokyo Stock Exchange
Code:
4540
URL:
https://www.tsumura.co.jp
Representative:
President Representative Director and CEO
Name: Terukazu Kato
Contact:
Head of Corporate Communications Dept.
Name: Ritsuko Inukai
Telephone: 81-3-6361-7100
Scheduled date of general meeting of shareholders:June 26, 2020
Scheduled date of dividend payment commencement:
June 29, 2020
Scheduled date of security report submission:
June 26, 2020
Preparation of supplementary materials for the financial statements: Yes
Holding of the financial results briefing:
Yes (for institutional investors, securities analysts and news media)(Figures are rounded down to the nearest one million yen.)

1. Consolidated business results for the term ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(1) Financial results (total sum)

(Figures in percentages denote the year-on-year change.)

Net sales

Fiscal Year 3/2020
Fiscal Year 3/2019

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

123,248
120,906

1.9
2.6

18,876
18,5201.9
8.6

19,64919,702(0.3)
10.0

13,765
14,593(5.7)
0.6(Note) Comprehensive income: FY 3/2020: 8,415 million yen [(35.7)%]

FY 3/2019: 13,090 million yen [(19.6)%]

Fully diluted profit
per share

Profit per share

Ratio of ordinary
income to total assets

Return on equity

Ratio of operating
profit to sales

Yen

Yen

%

%

%

Fiscal Year 3/2020

179.96

－

6.8

6.6

15.3

Fiscal Year 3/2019

190.87

－

7.4

6.8

15.3

(Reference) Equity in earnings of affiliates: FY 3/2020: 96 million yen

FY 3/2019: 112 million yen(2) Consolidated financial conditions
Total assets

As of March 31, 2020
As of March 31, 2019

Million yen

Million yen%

Yen

311,042
287,322

213,048
206,14166.0
70.2

2,684.38
2,639.59(Reference) Shareholders’ equity: FY 3/2020: 205,377 million yen(3) Consolidated cash flow
Cash flows from operating
activities
Fiscal Year 3/2020
Fiscal Year 3/2019

Shareholders’ equity
per share

Shareholders’ equity ratio

Net assets

FY 3/2019: 201,816 million yen

Cash flows frominvesting activities

Cash flows fromfinancing activities

Closing balance of cash
and cash equivalents

Million yen

Million yen

Million yen

Million yen

18,191
5,450(23,488)(7,697)

7,111(18,528)

57,692
56,243

2. Dividends
Dividend per share
End of Q1

End of Q2

End of Q3

End of FY

Total cash
dividends(annual)

Total

Dividends
payout(consolidated)

Net assets
dividend ratio(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen%%

FY 3/2019

‒

32.00

‒

32.00

64.00

4,893

33.5

2.5

FY 3/2020

‒

32.00

‒

32.00

64.00

4,896

35.6

2.4

FY 3/2021 (Projection)

‒

32.00

‒

32.00

64.00

37.7

3. Projections of consolidated business results for the term ending March 31, 2021
(From April 1, 2020 to March 31, 2021)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year
and from the second quarter of the previous fiscal year for second quarter (aggregate).)Net sales
Million yen

First half
Full-year

64,200132,000

Operating profit% Million yen

5.6
7.1

9,100
17,000

Profit attributable toowners of parent

Ordinary profit% Million yen

(6.9)
(9.9)

9,400
17,900% Million yen

(4.6)
(8.9)

6,800
13,000

Profit per share

%

Yen

(3.4)
(5.6)

88.88
169.92(Note) Since it is difficult to accurately predict when the coronavirus outbreak will end, the above forecasts do not factor in the impactof the virus. Based on the assumption that the coronavirus outbreak peaks between April and June and is then gradually brought undercontrol, the Company estimates a negative impact on net sales of 2-4%. However, if the outbreak drags on or if there is any othermaterial change in the situation, the Company will disclose information in a timely and appropriate manner.

Notes(1) Important changes of subsidiaries during the term (change of specified subsidiaries that lead to a change in the scope of
consolidation): Yes
New: Two companies
Names: Tianjin China Medico Technology Co., Ltd., Shengshi Baicao Pharmaceutical Co., Ltd.
Exclusion:
Name:(Note) For details, please refer to “3. Consolidated Financial Statements and Key Notes (5) Notes to the Consolidated Financial
Statements (Transfer of important subsidiaries during the fiscal year under review)” on page 13 of the Attached Documents.
(2) Changes in accounting principles and procedures and the method for indication, etc.
1) Changes associated with the revision of accounting principles, etc.: No
2) Change other than 1):
No3) Accounting estimate change:
No4) Retrospective restatement:No(3) Number of shares issued (common stock)1) Number of shares issued at the end of the term(including treasury stock) (shares)

FY 3/2020

76,758,362

FY 3/201976,758,362

2) Number of treasury stock at the end of the term
(shares)

FY 3/2020

250,049

FY 3/2019

300,631

3) Average number of shares during the term
(shares)

FY 3/2020

76,488,918

FY 3/201976,457,903* This Summary of Consolidated Financial Statements is not subject to audit procedures performed by a certified public accountant oraudit corporation.
* Explanation about the proper use of financial projections and other important notes
Forward-looking statements such as financial projections, which are stated in this document, are based on information currently
available to the Company and certain assumptions deemed reasonable. There is a possibility that actual results, etc. will differ
materially from forecasts due to various factors. Please see “1. Overview of Operating Results, etc. (4) Future outlook” on page 3
for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials
1. Overview of Operating Results, etc. ·······································································································

2(1) Overview of operating results for the fiscal year ended March 31, 2020 ·························································

2(2) Overview of financial position during the fiscal year ended March 31, 2020 ···················································

3(3) Overview of cash flow during the fiscal year ended March 31, 2020 ·····························································

3(4) Future outlook ····························································································································

3(5) Critical contracts for operation ·········································································································

4

2. Basic idea of the selection of accounting standards······················································································

4

3. Consolidated Financial Statements and Key Notes ······················································································

5(1) Consolidated Balance Sheets ···········································································································

5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ······························

7(3) Consolidated Statements of Changes in Equity ······················································································

9(4) Consolidated Statements of Cash Flows ·····························································································

11(5) Notes to the Consolidated Financial Statements ····················································································

13(Notes on premise of a going concern) ······························································································

13(Transfer of important subsidiaries during the fiscal year under review) ·······················································

13(Business combinations) ···············································································································

13(Segment information) ·················································································································

14(Per share information) ················································································································

15(Significant subsequent events) ·······································································································

151

1. Overview of Operating Results, etc.
(1) Overview of operating results for the fiscal year ended March 31, 2020
During the fiscal year under review, the pharmaceutical business in Japan continued to face a difficult environment amid theimplementation of measures for controlling medical expenses to curb ever-increasing social security spending. In addition, the
COVID-19 coronavirus pandemic caused the economic outlook to become more uncertain than ever and made the businessenvironment even more challenging.
Under these circumstances, some of the production bases of Tsumura and its group companies in China were affected, but those inJapan continued to operate without stoppages. The supply of Kampo products was, therefore, unaffected and sales of prescription
Kampo products continued to grow.
As a result, the consolidated net sales for the fiscal year under review increased 1.9% year on year, to 123,248 million yen.
Looking at profit, operating profit was 18,876 million yen (up 1.9% year on year) and ordinary profit was 19,649 million yen (down
0.3% year on year). Profit attributable to owners of parent was 13,765 million yen (down 5.7% year on year), reflecting the recordingof a loss on valuation of investments in capital of subsidiaries and associates of 431 million yen under extraordinary losses inconnection with a decision to dissolve and liquidate SPH TSUMURA PHARMACEUTICALS CO., LTD. The cost-to-sales ratio rose
0.3 percentage points year on year because the Company was unable to absorb the cost increase arising from the NHI drug pricerevision. In addition, the cost-to-SGA ratio fell 0.3 percentage point year on year, partly due to the voluntary cancellation of activities
due to the coronavirus outbreak. As a result, the operating profit margin was 15.3%, unchanged from a year ago.
[Consolidated business results]
FY 3/2019(Million yen)
YoY Change(Percent Change)

FY 3/2020

Net sales

120,906

123,248

2,341
1.9 %

Operating profit

18,52018,876356
1.9 %Ordinary profit

19,702

19,649(52)(0.3 ) %Profit attributable toowners of parent

14,593

13,765(828)(5.7) %Net sales of overall prescription Kampo products grew 1.8% year on year. To expand the Kampo market and establish a presence inthe market in a sustained manner, which are the strategic challenges adopted in the Medium-Term Management Plan, the Company
has positioned the geriatric field, the cancer domain (supportive care) and the gynecology field as three important domains. The
Company has been active in providing information on matters focused on five drug fostering program formulations*1 and fivegrowing formulations*2.
In the fiscal year under review, net sales of Daikenchuto, a drug fostering program formulation that is a staple item for the Company,
decreased 0.7% year on year. The Company will fully implement activities for providing information in the hospitals market afresh. At
the same time, the Company will step up activities for winning new markets by focusing on abdominal flatulence, in relation to which
satisfaction with treatment may be low. Net sales grew solidly for Hangeshashinto, another drug fostering program formulation, andBakumondoto and Goreisan, both of which are growing formulations. In other formulations, net sales of Ninjin’yoeito increased
favorably.
Demand for Kampo medicine is diversifying increasingly among health care professionals. The Company will continue its activities
for providing appropriate information on subjects, including evidence in basic and clinical medicine, clinical practice guidelines inwhich Kampo products are described, and the proper use of Kampo medicine based on Kampo diagnosis, with positioning meetings
with doctors, presentations for medical institutions and Kampo medicine seminars as well as web seminars as the basis of these
operations.
*1 five “Drug fostering” program formulations:
Formulations the Company is addressing by looking hard at the structure of diseases in recent years, targeting diseases that are
difficult to treat with new drugs for which prescription Kampo preparations prove specifically effective in domains where demand for
medical treatment is high, and calling the establishment of evidence “drug fostering”*2 five “Growing” formulations:
Growth drivers aimed at registration in clinical practice guidelines as strategic formulations after five drug fostering program
formulations by constructing evidence (such as data on safety and effectiveness) in domains where the degree of satisfaction withmedical treatment and the degree of drug contribution are low2(2) Overview of financial position during the fiscal year ended March 31, 2020
The financial position at the end of the fiscal year under review was as follows.
Total assets at the end of the fiscal year under review increased 23,719 million yen from the end of the previous fiscal year, to311,042 million yen. Current assets increased 4,261 million yen from the end of the previous fiscal year, mainly due to a rise ininventories despite a decrease in advance payments-trade. This was mainly due to the inclusion of Tianjin China Medico Technology
Co., Ltd. and its five subsidiaries in the scope of consolidation. Non-current assets grew 19,458 million yen from the end of theprevious fiscal year, mainly due to an increase in goodwill associated with the consolidation of Tianjin China Medico Technology Co.,
Ltd., offsetting a decrease in investment securities mainly due to a fall in share prices.
Total liabilities were 97,993 million yen, an increase of 16,812 million yen from the end of the previous fiscal year. Current liabilities
increased 15,156 million yen from the end of the previous fiscal year, mainly due to an increase in short-term loans payable to fundthe acquisition of an equity interest in Tianjin China Medico Technology Co., Ltd., which offset a decrease in accounts payable-other.
Non-current liabilities rose 1,655 million yen from the end of the previous fiscal year.
Net assets totaled 213,048 million yen, an increase of 6,907 million yen from the end of the previous fiscal year. Shareholders’ equity
rose 9,021 million yen from the end of the previous fiscal year, mainly reflecting an increase in retained earnings. Accumulated othercomprehensive income dropped 5,460 million yen from the end of the previous fiscal year, chiefly attributable to a fall in valuationdifference on available-for-sale securities. Non-controlling interests increased 3,346 million yen from the end of the previous fiscal
year.
As a result, the equity ratio fell 4.2 percentage points, to 66.0%.
(3) Overview of cash flow during the fiscal year ended March 31, 2020
Cash flows in the fiscal year under review were as follows:
At the end of the fiscal year under review, cash provided by operating activities was 18,191 million yen, cash used in investing
activities was 23,488 million yen and cash provided by financing activities was 7,111 million yen.
Cash provided by operating activities was 18,191 million yen. Looking at its breakdown, a major cash inflow item was profit before
income taxes of 19,223 million yen, while a major cash outflow item was a decrease (an increase) in inventories of 3,930 million yen.
Compared to the previous fiscal year, cash inflow increased 12,740 million yen.
Cash used in investing activities was 23,488 million yen. Looking at its breakdown, a major cash outflow item was the purchase ofinvestments in subsidiaries resulting in change in scope of consolidation of 17,891 million yen. Compared to the previous fiscal year,
cash outflow increased 15,790 million yen.
Cash provided by financing activities was 7,111 million yen. Looking at its breakdown, a major cash inflow item was proceeds fromshort-term borrowings of 11,304 million yen. Compared to the previous fiscal year, cash inflow grew 25,639 million yen.
As a result, cash and cash equivalents increased 1,448 million yen from the end of the previous fiscal year, to 57,692 million yen.
(4) Future outlook
In view of the growth of prescription Kampo products in Japan as well as China business, the net sales forecast for the fiscal year
ending March 31, 2021 is 132,000million yen (up7.1%). Profit forecasts are operating income of 17,000million yen (down9.9%),
ordinary income of 17,900million yen (down8.9%), and profit attributable to owners of parent of 13,000million yen (down5.6%).
Since it is difficult to accurately predict when the coronavirus outbreak will end, the above forecasts do not factor in the impact of thevirus. Based on the assumption that the coronavirus outbreak peaks between April and June and is then gradually brought undercontrol, the Company estimates a negative impact on net sales of 2-4%. However, if the outbreak drags on or if there is any othermaterial change in the situation, the Company will disclose information in a timely and appropriate manner.
The Company’s Shizuoka Plant, Ibaraki Plant and Ishioka Center, LOGITEM TSUMURA CO., LTD. And YUBARI TSUMURA
CO., LTD. and the bases of Group companies located in China have all put measures in place to prevent the virus from spreading andare operating as usual, to maintain a stable supply of prescription Kampo products. With the safety of its employees, customers andbusiness partners as its number one priority, the Company will continue seeking to prevent the spread of the coronavirus, determining
a course of action based on Government guidance and action plans while seeking to continue business in an appropriate manner.

Net sales
FY 3/2021
Percent Change

Operating profit

132,000
7.1%

17,000(9.9)%

3

Ordinary profit
17,900(8.9)%(Million yen)
Profit attributable toowners of parent
13,000(5.6)%

(5) Critical contracts for operation
At a meeting held on February 28, 2020, the Company’s Board of Directors passed a resolution to conclude an equity interest
transfer agreement for the acquisition of an 80% equity interest in Tianjin China Medico Technology Co., Ltd.by Ping An Tsumura
Inc., which is a consolidated subsidiary of the Company. Ping An Tsumura Inc. concluded the agreement on March 22, 2020 andacquired the 80% equity interest in Tianjin China Medico Technology Co., Ltd. on March 30, 2020.
Details are as stated in “3. Consolidated Financial Statements and Key Notes (5) Notes to the Consolidated Financial Statements(Business combinations)

2. Basic idea of the selection of accounting standards
Tsumura and its group companies plan to prepare consolidated financial statements based on the Japanese standards for the time being.
The companies will consider adopting the IFRS in an appropriate manner, taking into account conditions in Japan and overseas.

4

3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Million yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payments - trade
Other
Allowance for doubtful accounts

As of March 31, 2020

72,24044,524
9,382
11,12531,29916,5144,945(4)61,957
47,161
10,33812,41850,553
3,741
8,140
(22)

190,027

194,288

64,80050,214
10,815
9,052
15,199392(76,769)

68,67252,012
11,3409,051
18,748451(83,069)

73,703

77,207

Goodwill－

12,016

Other

872

1,324

Total intangible assets

872

13,341

Investment and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts

15,642
1,934
366
4,777
(0)

10,7501,213
755
13,485(0)Total investment and other assets

22,71926,20497,295

116,753

287,322

311,042

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Construction in progress
Other
Accumulated depreciation
Total property, plant and equipment
Intangible assets

Total non-current assets
Total assets

5

(Million yen)
As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Accounts payable - other
Income taxes payable
Provision for sales returns
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Retirement benefit liability
Other
Total non-current liabilities

As of March 31, 2020

6,267
10,314
8,032
2,101
10
6,594

10,12822,874
5,874
3,607
10
5,982

33,32048,47630,000
9,376
1,905
1,179
74
5,324

30,00012,394
0
1,179
72
5,869

47,86149,516

Total liabilities

81,181

97,993

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

30,142
14,027
149,740(815)

30,142
14,041
158,610(678)

193,095

202,116

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

5,697
740
2,673
(313)
(76)

2,767
87
2,673
(1,318)(949)

Total accumulated other comprehensive income

8,721

3,260

4,324

7,671

206,141

213,048287,322

311,042

Total shareholders’ equity

Non-controlling interests
Total net assets
Total liabilities and net assets

6

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Million yen)
FY 3/2019(From April 1, 2018
to March 31, 2019)

FY 3/2020(From April 1, 2019
to March 31, 2020)

Net sales
Cost of sales

120,906
49,451

123,248
50,747Gross profit

71,45572,500

Selling, general and administrative expenses

52,93553,623Operating profit

18,52018,876

507
235

573
253

112

96

164

－

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses

400

401

1,420

1,325

162

142

Foreign exchange losses－

254

Loss on abandonment of inventories

－

94

Other

76

61

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income

238

552

19,702

19,649

1
324

5
339

325

344

Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets

0
130

1
50

Loss on sales of investment securities－

19

Loss on valuation of investment securities－

267

Loss on valuation of investments in capital of subsidiaries
and associates－

431

Total extraordinary losses

130

770

Profit before income taxes

19,897

19,223

Income taxes - current
Income taxes - deferred

4,670
393

5,611
(344)

Total income taxes

5,064

5,266

Profit14,833

13,956239

191

14,593

13,765

Profit attributable to non-controlling interests
Profit attributable to owners of parent

7

Consolidated Statements of Comprehensive Income(Million yen)
FY 3/2019(From April 1, 2018
to March 31, 2019)
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
Share of other comprehensive income (loss) of entities
accounted for using equity method

FY 3/2020(From April 1, 2019
to March 31, 2020)

14,833

13,956949
417(2,826)(234)(2,930)(652)(1,078)
(872)

(48)

(7)

(1,742)(5,541)

Comprehensive income

13,0908,415Comprehensive income attributable to
Owners of parent
Non-controlling interests

13,111
(20)

8,304
110

Total other comprehensive income (loss)8

(3) Consolidated Statements of Changes in Equity
FY 3/2019 (From April 1, 2018 to March 31, 2019)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

30,142Retained earnings

14,027

Total shareholders’equityTreasury shares(814)

140,040

183,396

Changes of items during the period
Dividends of surplus(4,893)(4,893)

Net income attributable to ownersof parent

14,593

14,593(0)Purchase of treasury shares(0)

Increase of consolidated
subsidiaries - non-controllinginterests－

Net changes of items other thanshareholders’ equity
Total changes of items during theperiod

－

－

9,700

(0)

9,699

Balance at end of current period

30,142

14,027

149,740(815)

193,095

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
availablefor-salesecurities

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensi
ve income

Noncontrollinginterests

Total net
assets

4,748

323

2,673

2,301

157

10,203

2,933

196,533

Changes of items during the period
Dividends of surplus(4,893)

Net income attributable to ownersof parent

14,593(0)Purchase of treasury shares
Increase of consolidated
subsidiaries - non-controllinginterests

1,468

1,468

Net changes of items other thanshareholders’ equity

949

417

－

(2,614)(234)(1,482)(77)(1,559)Total changes of items during theperiod

949

417

－

(2,614)(234)(1,482)

1,391

9,608

Balance at end of current period

5,697

740

2,673

(313)

(76)

8,721

4,324

206,1419

FY 3/2020 (From April 1, 2019 to March 31, 2020)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

30,142Retained earnings

14,027

Total shareholders’equityTreasury shares(815)

149,740

193,095

Changes of items during the period
Dividends of surplus(4,894)(4,894)

Net income attributable to ownersof parent

13,765

13,765Purchase of treasury shares
Disposal of treasury shares

13

(0)

(0)

138

152

Increase of consolidated
subsidiaries - non-controllinginterests－

Net changes of items other thanshareholders’ equity
Total changes of items during theperiod

－

13

8,870

137

9,021

Balance at end of current period

30,142

14,041

158,610(678)

202,116

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
availablefor-salesecurities

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensi
ve income

Noncontrollinginterests

Total net
assets

5,697

740

2,673

(313)

(76)

8,721

4,324

206,141

Changes of items during the period
Dividends of surplus(4,894)

Net income attributable to ownersof parent

13,765Purchase of treasury shares(0)

Disposal of treasury shares

152

Increase of consolidated
subsidiaries - non-controllinginterests

2,556

2,556

Net changes of items other thanshareholders’ equity(2,930)(652)－(1,004)(872)(5,460)790(4,670)Total changes of items during theperiod(2,930)(652)－(1,004)(872)(5,460)

3,346

6,907

Balance at end of current period

2,767

87

2,673

(1,318)

(949)

3,260

7,671

213,04810

(4) Consolidated Statements of Cash Flows(Million yen)
FY 3/2019(From April 1, 2018
to March 31, 2019)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Loss on valuation of investments in capital of subsidiaries
and associates
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in advance payments
Loss (gain) on sales of short-term and long-term investment
securities
Loss (gain) on valuation of short-term and long-term
investment securities
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Other

FY 3/2020(From April 1, 2019
to March 31, 2020)

19,897
6,362
0
(742)
162

19,223
6,406
0
(827)
142

(112)

(96)

127

47

－

431

(1,676)(2,651)915(9,808)(866)(3,930)
134
(213)

(324)

(319)

－

267

(385)
8
(847)

(552)
13
1,446

Subtotal

10,926

21,307

Interest and dividend income received
Interest paid
Income taxes paid

696
(163)
(6,009)

1,164
(141)
(4,138)5,450

18,191(1,136)(8,514)3(427)(20,822)

11,558(10,007)6(545)(39,826)

24,51240,560(952)(4,226)－(17,891)

(239)

－

(3)
3
(123)

(3,001)
3(117)(7,697)(23,488)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales and redemption of short-term and longterm investment securities
Purchase of investments in capital of subsidiaries
Purchase of investments in capital of subsidiaries resulting
in change in scope of consolidation
Payments for investments in capital of subsidiaries andassociates
Loan advances
Collection of loans receivable
Other
Net cash provided by (used in) investing activities

11

(Million yen)
FY 3/2019(From April 1, 2018
to March 31, 2019)

FY 3/2020(From April 1, 2019
to March 31, 2020)

Cash flows from financing activities
Proceeds from short-term borrowings－

11,304

Repayments of long-term borrowings(15,000)－

Proceeds from share issuance to non-controllingshareholders
Dividends paid
Dividends paid to non-controlling interests
Other

1,468

816

(4,893)(54)(47)(4,897)(56)(54)

Net cash provided by (used in) financing activities(18,528)

7,111

Effect of exchange rate change on cash and cash equivalents(1,294)(366)

Net increase (decrease) in cash and cash equivalents(22,069)

1,448

Cash and cash equivalents at beginning of period

78,31356,243

Cash and cash equivalents at end of period

56,24357,69212

(5) Notes to the Consolidated Financial Statements(Notes on premise of a going concern)
There are no applicable matters.
(Transfer of important subsidiaries during the fiscal year under review)
In the fiscal year under review, Ping An Tsumura Inc., which is a consolidated subsidiary of the Company, acquired an 80% equity
interest in Tianjin China Medico Technology Co., Ltd. and, as a result, Tianjin China Medico Technology Co., Ltd. and its fivesubsidiaries were included in the scope of consolidation. Tianjin China Medico Technology Co., Ltd. and its subsidiary Shengshi
Baicao Pharmaceutical Co., Ltd. fall under specified subsidiaries of the Company.
Pingcun Medical (Shenzhen) Co., Ltd. was included in the scope of consolidation in the fiscal year under review due to its
establishment, although it did not fall under changes in specified subsidiaries.
(Business combinations）
Business combination through acquisition
At a meeting held on February 28, 2020, the Company’s Board of Directors passed a resolution to conclude an equity interest transfer
agreement for the acquisition of an 80% equity interest in Tianjin China Medico Technology Co., Ltd. (“China Medico”) by Ping An
Tsumura Inc.(“Ping An Tsumura”), which is a consolidated subsidiary of the Company. Ping An Tsumura concluded the agreement on
March 22, 2020 and acquired the 80% equity interest in China Medico on March 30, 2020. As a result, China Medico and its fivesubsidiaries became consolidated subsidiaries of the Company.
1. Outline of business combination(1) Name of acquired company and its business description
Name of acquired company: Tianjin China Medico Technology Co., Ltd. and its five subsidiaries
Business description: Production, manufacturing, sales of traditional Chinese medicine and crude drug pieces(2) Main reasons for business combination
China Medico has been in business with Tsumura Group since its establishment in 2011 as the main supplier of crude drugs in China.
In 2016, Tsumura and China Medico signed a comprehensive business alliance agreement and have promoted the supply andprocurement of crude drugs, research on crude drug cultivation and processing, quality control of crude drugs, and overallmanagement of place of production of crude drugs. In March 2018, Tsumura established TSUMURA SHENGSHIPHARMACEUTICALS CO., LTD, a joint venture in Tianjin, China, and is preparing to enter the Kampo extract powder (intermediatefor Kampo preparation) and the traditional Chinese medicinal product business.
To contribute to the health of the Chinese people, Tsumura and China Medico will share Tsumura’s knowhow in the Kampo and crude
drug business and China Medico’s unique knowledge to work on traditional Chinese medicine and other businesses with theirstrengthened relationship, and continue to combine their strengths in a variety of fields, including technology and market routes.
(3) Date of business combination
March 30, 2020 (Deemed acquisition date: December 31, 2019)(4) Legal form of business combination
Acquisition of equity interest(5) Name of company after business combination
Unchanged(6) Percentage of voting rights acquired80%(7) Main reason to decide the acquiring company
Because Ping An Tsumura acquired an 80% equity interest in exchange for cash.
2. The period of results of the acquired company included in the consolidated financial statements
Since December 31, 2019 is taken as the deemed acquisition date and only the balance sheets are consolidated in the fiscal year underreview, the results of the acquired company are not included.
3. Breakdown of acquisition costs and consideration for acquisition of the acquired company by type
Consideration for acquisition
Cash and deposits
1,200 million RMB (18,840 million yen)
Acquisition costs

1,200 million RMB (18,840 million yen)13

4. Breakdown and amount of major expenses related to acquisition
Advisory fee, etc.
2 million RMB (39 million yen)
5. Amount of goodwill that occurred, the cause for the occurrence, the amortization method, and the amortization period(1) Amount of goodwill that occurred
765 million RMB (12,016 million yen)
The amount of goodwill is a provisional amount as allocation of acquisition cost was not completed at the end of the fiscal year underreview.
(2) Cause for the occurrence
Since the acquisition cost exceeded the fair value of the net assets at the time of the business combination, the difference wasrecognized as goodwill.
(3) Amortization method and amortization period
Amortized in equal amounts over 20 years
6. Amount of assets and liabilities assumed on the date of business combination and its major breakdown
Current assets
Noncurrent assets

1,674 million RMB (26,292 million yen)
365 million RMB ( 5,793 million yen)

Total assets
Current liabilities

2,039 million RMB (32,086 million yen)
1,212 million RMB (19,029 million yen)Noncurrent liabilities
Total liabilities

241 million RMB ( 3,788 million yen)
1,453 million RMB (22,818 million yen)

7. Allocation of acquisition cost
Since the allocation of acquisition cost was not completed at the end of the fiscal year under review, provisional accounting treatment
was adopted based on reasonable information available at the time.
8. Approximate impact on the Consolidated Statement of Income for the fiscal year under review, with the method of its calculation,
assuming that the business combination was completed at the date of commencement of the consolidated fiscal year
Net sales
294 million RMB (4,627 million yen)
(Method of calculation of approximate impact)
The difference between net sales calculated on the assumption that the business combination was completed at the date ofcommencement of the fiscal year and net sales in the Consolidated Statement of Income of the Acquiring Company is used as theapproximate impact.
These notes are not subject to audit certification.
(Segment information)
The Group only has one segment of pharmaceutical products and thus the statement of segment information is omitted.

14

(Per share information)
FY 3/2019(From April 1, 2018
to March 31, 2019)
Net assets per share
Profit per share

FY 3/2020(From April 1, 2019
to March 31, 2020)

2,639.59 yen
190.87 yen

2,684.38 yen
179.96 yen(Notes) 1. Fully diluted net income per share is not stated because there are no residual securities.
2. Basis of calculation(1) The basis of calculation for net assets per share is as follows.
As of March 31, 2019
Total net assets (million yen)

213,048

4,324

7,671

Deduction from total net assets (million yen)〔Non-controlling interests〕

As of March 31, 2020

206,141〔4,324〕〔7,671〕

Net assets related to common stock at the end of the fiscal
year (million yen)

201,816

205,377

Number of shares of common stock at the end of the
fiscal year used for calculation of net assets per share(thousand shares)

76,45776,508(2) The basis of calculation for net income per share is as follows.
FY 3/2019(From April 1, 2018
to March 31, 2019)
Profit attributable to owners of parent (million yen)

FY 3/2020(From April 1, 2019
to March 31, 2020)
14,593

13,765

Amount not attributable to common stockholders (million
yen)

－

－

Profit attributable to owners of parent related to common
stock (million yen)

14,593

13,765

Average number of shares of common stock during the
fiscal year under review (thousand shares)

76,45776,488(Significant subsequent events)
There are no applicable matters.

15