1 Tokuyama Corporation Annual Report 2019

Tokuyama Corporation Annual Report 2019 2

Contents
Profile4

Consolidated Financial Highlights

7

Segment Information

9

Medium-Term Management Plan

17

Message from the President

19

Research and Development

21

CSR Initiatives

23

Corporate Governance25

Business and Other Risks

29

Corporate Officers

31

Financial Section

34

Independent Auditor’s Report

84

Major Subsidiaries and Affiliates

85

Corporate Data and Stock Information

87

CAUTIONARY NOTES:FORWARD-LOOKING STATEMENTS
This annual report contains information about forward-looking statements related to such matters as the Company’s plans, strategies and businessresults. These forward-looking statements represent judgments made by the Company based on information available at the time of preparing thisreport, and are inherently subject to a variety of risks and uncertainties. The Company’s actual activities and business results could differ
significantly from the forward-looking statements due to changes including, but not limited to, those in the economic environment, businessenvironment, demand and exchange rates.

DISCLAIMER
This annual report is supplied to provide information of the Company, and is not intended as a solicitation for investment or other actions. The
Company assumes no responsibility whatever for any losses or deficits resulting from investment decisions based entirely on projections,numerical targets and other information contained in this report.

3 Tokuyama Corporation Annual Report 2019

Profile
Tokuyama Corporation was founded in 1918 to begin production in Japan of soda ash, also known as sodium carbonate,
which was being imported at that time. As a fundamental material for industry, soda ash was indispensable forfacilitating the country's industrial development in the early 20th century.
The company has gone on to produce and supply a wide range of chemical products. Building on this foundation,
Tokuyama is currently expanding its main businesses globally, with a special focus on its information and electronics
business, which markets semiconductor-related products, the life and healthcare business, which includes eyeglass lensmaterials, dental materials and other products, as well as cement, recycling and environment-related businesses.
On February 16, 2018, Tokuyama celebrated the 100th anniversary of its foundation. We at the Tokuyama Group arecommitted to creating new value centered on the field of chemistry. In creating a constant stream of new value, we willcontribute to people’s happiness as well as the growth and development of society.

Company History
1918～1944 Establishment and specialization in soda production
1918
1938
1940

Nihon Soda Kogyo Co., Ltd. (currently Tokuyama Corporation)
was established to produce soda ash
Commenced cement business
Expansion of inorganic chemicals business

1945～1960 Further expansion of inorganic chemicals business
1952

The Factory as it was established

Commenced electrolytic chlor-alkali business

1961～1974 Entry into petrochemicals business
1964
1966
1967
1970

Commenced petrochemicals business
Commenced polyvinyl chloride business
Commenced ion exchange membrane business
Commenced polypropylene business
1960’s Cement kiln (length: 185m)

1975～1989 Entry into specialty and processing business
1976
1978
1981
1982
1983

1984
1985

Commenced polyolefin film business
Commenced dental materials and equipment business
Commenced building materials business
Commenced life-related business
Commenced fine chemicals business
Commenced IC chemicals business (high-purity chemicals
for electronics manufacturing)
Commenced medical diagnosis systems business
Commenced electronic materials business (polycrystalline silicon)
Commenced aluminum nitride business
Commenced gas sensors businessTokuyama Factory (Current)

1990～2004 Strengthening and restructuring of business
1992
1995
2000

Established Sun • Tox Co., Ltd. as a joint venture for manufacture and sale of polyolefin film
Established Shin Dai-ichi Vinyl Corporation as a joint concern for manufacture and sale of polyvinyl chloride
Commenced recycling & environment-related business2005～ Accelerating overseas business expansion
2005

2013

Established Tokuyama Chemicals (Zhejiang) Co., Ltd. in Zhejiang, China as a manufacturing and sales
company of fumed silica
Established Tokuyama Trading (Shanghai) Co., Ltd., as a China-based local subsidiary.
Established Tokuyama Nouvelle Calédonie S.A., in New Caledonia, as a manufacturing and sales company
of cement.

2016～ Re- Foundation
2017
2018

Transferred all of the shares of Tokuyama Malaysia Sdn. Bhd.
Acquire all shares of TOKUYAMA KAIRIKU UNSO K.K.

Tokuyama Corporation Annual Report 2019 4

A Value Creation Cycle that Spans Close to a Century
Drawing on its unique technologies in the manufacture and development of inorganic and organic chemicals, Tokuyama
has continued to refine its capabilities as the driving force behind its value creation endeavors for just short of a century.
As a platform for the manufacture and seamless delivery of products that employ these technologies to reduce costs toan unprecedented level, the Company also makes full use of the industry-leading port infrastructure and in-house power
generation facilities owned and operated by Tokuyama Factory. Located in the Shunan Industrial Complex, Tokuyama
Factory works diligently to deepen ties with neighboring companies. In addition to the supply of electric power and raw
materials, Tokuyama Factory actively engages in the collection of waste. As the Group’s main manufacturing facility,
Tokuyama Factory boasts a highly efficient production structure and systems that link several plants and operational
units to ensure the integrated and effective use of raw materials, products, byproducts, and waste.
Taking full advantage of its tangible and intangible asset including unique technologies, competitive manufacturing
facilities as well as human resources and organizations with professional skills and experience, the Tokuyama Group
provides products and services that match the needs of the market. With a proven track record of creating value with ourcustomers for a century, we will continue to fine tune our business model as a core and inherent strength.

5 Tokuyama Corporation Annual Report 2019

Tokuyama Corporation Annual Report 2019 6

Consolidated Financial Highlights
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31

Millions of yen
2010

2011

2012

2013

2014

Net sales

273,154289,786

282,381258,632

287,330

Operating profit (Note 1)

15,486

19,313

12,721

3,993

17,960

Profit (loss) attributable to owners of parent

7,458

9,765

9,351

(37,916)

10,218117.58140.32134.37(544.88)

146.86

6.00

6.00

6.00

3.00

6.00

Net assets

3,410.17

3,465.91

3,581.95

3,126.42

3,300.88

Total assets

452,893474,708

501,181518,251

576,315

Net assets

243,606

247,656

255,460

223,871

236,453

Cash flows from operating activities

29,38037,04327,06017,071

34,105

Cash flows from investing activities(36,468)(88,508)(57,666)(60,673)(64,402)

Cash flows from financing activities

46,99023,994

20,791

36,46545,939Cash and cash equivalents at end of the year

95,945

68,62458,47652,431

69,973

Capital expenditures

26,55735,80777,602

97,54961,051

Depreciation and amortization (Note 4)

37,68831,47628,492

23,242

16,770R&D expenses

11,817

11,46911,704

10,076

8,709

Shareholders' equity ratio (%)

52.4

50.8

49.7

42.0

39.9

Return on equity (%)

3.5

4.1

3.8

(16.2)

4.6

Number of employees

5,444

5,493

5,506

5,651

5,756

Consolidated subsidiaries

49

50

48

49

53

Per share amounts (in yen) (Note 2,3)
Basic earnings (loss)
Cash dividends(Note 1):Net sales doesn’t include consumption tax ,etc.
(Note 2): The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. On this basis, basic earnings(loss) per share and net assets per share are calculated on the assumption that the consolidation of shares was conducted as of the beginning fiscal year ending
March 31, 2010. The cash dividends per share for the fiscal year ending March 31, 2018 is the total after the share consolidation. The cash dividends per share
before the fiscal year ended March 31, 2017 are not re-calculated retrospectively.
(Note 3): On September 3, 2018, the Company established a Director Remuneration BIP (Board Incentive Plan) Trust (hereinafter referred to as “the BIP
Trust”) with the Company’s stock held by the BIP Trust recorded as treasury stock. In addition, this treasury stock is included in the treasury stock that isdeducted from the number of shares issued and outstanding as of the end of the period used to calculate net assets per share as well as the treasury stock that isdeducted when computing the average number of shares over the period in calculations for net income per share.
(Note 4): Depreciation and amortization includes amortization of long-term prepaid expenses.
(Note 5): Effective from the fiscal year ended March,31 2019 under review, Tokuyama has applied the Partial Amendments to Accounting Standard for Tax
Effect Accounting (hereinafter “Partial Amendments to Tax Effect Accounting Standard,” Accounting Standards Board of Japan (ASBJ) Statement No. 28,
issued on February 16, 2018).
(Note 6):U.S. dollar amounts above and elsewhere in this annual report are converted from Japanese yen, for convenience only, at the rate of ¥111＝US$1.

7 Tokuyama Corporation Annual Report 2019

Thousands of
U.S. dollars

Millions of yen(Note 6)

2015

2016

2017

2018

2019

2019

Net sales

302,085

307,115

299,106

308,061

324,661

2,924,874

Operating profit (Note 1)

18,70521,93638,533

41,26835,262

317,682

Profit (loss) attributable to owners of parent(65,349)(100,563)

52,165

19,69834,279308,820(939.26)(1,445.49)

738.92259.81493.26

4.44

-

-

-

30.00

50.00

0.45

Net assets

2,336.78

739.901,527.42

1,806.56

2,199.83

19.82

Total assets

554,527

401,342424,433

361,949

379,630

3,420,091

Net assets

169,445

60,205

135,976

136,591

163,525

1,473,200

Cash flows from operating activities

30,77230,09820,012

61,88538,531

347,132

Cash flows from investing activities(25,519)

13,400(10,089)(12,665)(16,174)(145,716)

Cash flows from financing activities

40,502(37,689)(11,911)(101,209)(21,104)(190,130)

Cash and cash equivalents at end of the year

116,122

121,166

118,819

66,807

67,991

612,537

Capital expenditures

25,345

13,945

17,36015,941

18,581

167,402

Depreciation and amortization (Note 4)

18,84520,084

14,215

13,98515,093

135,976

R&D expenses

10,156

8,522

7,508

7,903

8,052

72,543

Shareholders' equity ratio (%)

29.3

12.8

29.9

34.7

40.2

-

Return on equity (%)(33.3)(94.0)

58.5

15.6

24.6

-

Number of employees

5,852

5,759

5,406

4,889

5,471

-

Consolidated subsidiaries

54

55

51

49

52

-

Per share amounts (in yen, U.S. dollars) ( Note 2,3)
Basic earnings (loss)
Cash dividends(Note 1):Net sales doesn’t include consumption tax ,etc.
(Note 2): The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. On this basis, basic earnings(loss) per share and net assets per share are calculated on the assumption that the consolidation of shares was conducted as of the beginning fiscal year ending
March 31, 2010. The cash dividends per share for the fiscal year ending March 31, 2018 is the total after the share consolidation. The cash dividends per share
before the fiscal year ended March 31, 2017 are not re-calculated retrospectively.
(Note 3): On September 3, 2018, the Company established a Director Remuneration BIP (Board Incentive Plan) Trust (hereinafter referred to as “the BIP
Trust”) with the Company’s stock held by the BIP Trust recorded as treasury stock. In addition, this treasury stock is included in the treasury stock that isdeducted from the number of shares issued and outstanding as of the end of the period used to calculate net assets per share as well as the treasury stock that isdeducted when computing the average number of shares over the period in calculations for net income per share.
(Note 4): Depreciation and amortization includes amortization of long-term prepaid expenses.
(Note 5): Effective from the fiscal year ended March,31 2019 under review, Tokuyama has applied the Partial Amendments to Accounting Standard for Tax
Effect Accounting (hereinafter “Partial Amendments to Tax Effect Accounting Standard,” Accounting Standards Board of Japan (ASBJ) Statement No. 28,
issued on February 16, 2018).
(Note 6):U.S. dollar amounts above and elsewhere in this annual report are converted from Japanese yen, for convenience only, at the rate of ¥111＝US$1.

Tokuyama Corporation Annual Report 2019 8

Segment Information
CHEMICALS
Tokuyama's Chemicals segment handles basic chemicals used as raw
materials for an array of products that are essential for people's
livelihoods. Among these are soda ash, which Tokuyama has been
producing since its founding in 1918, and caustic soda, a material
which is said to be “essential for the manufacture of products infactories.” These and other chlorine derivatives are used in a very
wide range of applications and are essential for all kinds of industries.
The caustic soda business also plays an additional role in Tokuyama's
earnings platform, as its manufacturing process generates chlorine andhydrogen that are used in processes for producing the Company's
polycrystalline silicon. In addition, Yamaguchi Liquid Hydrogen
Corporation, a joint venture for liquid hydrogen production,commenced operations in 2013. Through these operations, theCompany’s hydrogen is also used for rocket fuel at the Tanegashima
Space Center of Japan Aerospace Exploration Agency (JAXA). In thisway, the segment is contributing to the development of space
exploration.

26.6%

With the goal to continue ensuring that Tokuyama is the preferred choice of customers, the Chemicals segment oversees
three business units and Group companies while working to provide a stable supply of products and services that meetthe expectations and needs of customers in a timely manner.
Business Unit

Major Products

Soda Ash and Calcium Chloride

Soda ash, Calcium chloride and Sodium silicate

Chlor-Alkali and Vinyl Chloride

Caustic soda, Vinyl chloride monomer (VCM), Propylene oxide and Chlorinated solvents

New Organic Chemicals

Isopropyl alcohol (IPA)
Soda ash and Calcium chloride [Tokuyama Soda Trading Co., Ltd.]Group Companies
Polyvinyl chloride (PVC) [Shin Dai-ichi Vinyl Corp.]

Operating Results for the Fiscal Year ended March 31, 2019
With regard to caustic soda, the revision of selling prices was progressed. As a result, its operating profit increased
greatly.
Sales volume of vinyl chloride resin was steady. Meanwhile, manufacturing costs increased due to a rise in raw material
prices such as domestic naphtha. As a result, its operating profit decreased.
Calcium chloride sales volume decreased and operating profit was down due to the effects of a warm winter.
As a result of the above, segment net sales increased 5.2% compared with the previous fiscal year, to ¥98,380 million
and operating profit increased 4.2% to ¥16,850 million. The segment reported higher earnings on higher sales.

9 Tokuyama Corporation Annual Report 2019

Strategies Going Forward
Tokuyama will contribute to the development of customers’ businesses and the creation of a healthy and safe society bydelivering high-quality, cost-competitive basic chemical materials and services that properly and promptly reflect
customers’ needs. At the same time, we will help to ensure the Company’ stable and continuous earnings growth, allthrough our activities as the core business of the Group. Guided by this basic policy, we will push forward the following
priority measures.
■ Soda Ash and Calcium Chloride BusinessWe will ensure the stable supply of products while maintaining quality as a sole domestic manufacturer.
■ Chlor-Alkali and Vinyl Chloride Business
From a manufacturing cost competitiveness perspective, we will work to secure a leading position by engaging inthoroughgoing cost reduction activities while further enhancing our high technological skills and improving ourmanufacturing process capabilities.
Moreover, we will strengthen our caustic soda and vinyl chloride monomer (VCM) export structure and systems while
maintaining plant operations at full capacity.

Tokuyama Corporation Annual Report 2019 10

SPECIALTY PRODUCTS
The Specialty Products segment offers products for a wide range offields including energy, electronics and the environment. Our
high-purity polycrystalline silicon is used for semiconductors andsolar cells. Tokuyama is one of the leading companies in the world's
polycrystalline silicon market. Fumed silica, which is produced froma by-product of polycrystalline silicon manufacture, is used forsilicone rubber, polishing material for semiconductors manufacturing,copier toner and other applications. Aluminum nitride, which boasts
excellent heat dissipation properties, is used for semiconductor
production equipment and energy-saving applications such as
inverters and LEDs. Our high-purity chemicals for electronics
manufacturing are used chiefly for production of semiconductors and
LCD panels.

26.6%

The Specialty Products segment will continue to build on its
advanced chemical technologies such as high purification, powder
control and others, to create unique products that are useful to society.

Business Unit

Major ProductsElectronic Materials

High-purity Polycrystalline silicon

Fumed Silica

Fumed silica and Tetrachlorosilane

Thermal Management Material

Aluminum nitride

IC Chemicals

High-purity chemicals for electronics manufacturing and photoresist developer

Cleaning System

Methylene chloride for metal cleaning
Fumed silica [Tokuyama Chemicals (Zhejiang) Co., Ltd.]Group Companies

Aluminum nitride substrate [Tokuyama-Dowa Power Materials Co., Ltd.]
High-purity chemicals for electronics manufacturing [Taiwan Tokuyama Corporation]

Operating Results for the Fiscal Year ended March 31, 2019
Sales volume of semiconductor-grade polycrystalline silicon was steady. Meanwhile, manufacturing costs increased due
to an upturn in fuel and raw material costs. As a result, its operating profit decreased.
With regard to high-purity chemicals for electronics manufacturing, sales volume was steady. Meanwhile,
manufacturing costs increased due to a rise in raw material prices such as domestic naphtha. As a result, its operating
profit decreased.
With regard to thermal management material, sales volume in such applications used for semiconductor manufacturing
equipment increased and the business did well.
As a result of the above, segment net sales increased 1.7% compared with the previous fiscal year, to ¥59,668 million
and operating profit decreased 9.7% to ¥9,934 million. The segment reported lower earnings on higher sales.

11

Tokuyama Corporation Annual Report 2019

Strategies Going Forward
We will work to expand our business and earnings by supporting those industries that enrich people’s lives through theprovision of providing high-performance materials in the telecommunications and electronics, environment and energy,
and other fields while at the same time putting forward next-generation product proposals. Guided by this basic policy,
we will push forward the following priority measures.
■ Semiconductor-grade Polycrystalline Silicon BusinessWe will accurately grasp customers’ product quality needs encompassing their most recent requirements; achieve
world-leading quality while minimizing costs.
■ Fumed Silica BusinessIn addition to upgrading and expanding highly functional products as well as CMP- and silicone-related products, wewill reduce production costs and promote high added value at Tokuyama Chemicals (Zhejiang) Co., Ltd.
■ IC Chemicals BusinessIn addition to expanding sales and improving the quality of advanced semiconductor-grade products, we will work toboost production capacity in Japan, Taiwan, and China while establishing a supply structure and systems that address
demand in the Asia region.
■ Thermal Management Material BusinessWe will increase the annual production capacity of high-purity aluminum nitride powder from 600 tonnes to 840 tonnes
in April 2020 and establish a stable supply structure and systems.
We will promote efforts aimed at expanding our lineup of boron nitride, aluminum nitride filler, and other products.

Tokuyama Corporation Annual Report 2019 12

CEMENT
Tokuyama launched its cement business in 1938 out of a desire toefficiently make use of by-products produced at the Tokuyama
Factory, an environmental approach that was ahead of its time inJapan. The segment produces cement and such related products as
cement-type soil solidifiers at the Nanyo Plant of the Tokuyama
Factory. These products are used for ready-mixed concrete andsecondary concrete items, which in turn are used to help build
infrastructure essential for people's lives, including residences,buildings, structures which support essential utilities, andtransportation facilities such as ports, bridges, and roads.

26.6%

In the cement production process, we accept a large volume of waste
matter, including waste plastic and household garbage incineration
ash from outside the Company as well as inside the Company, andutilize it as raw materials or fuel sources. In this way, the segment is
promoting a recycling approach that is responsive to the needs ofsociety, thereby helping promote a recycling-oriented society that
effectively makes use of resources as much as possible.
Tokuyama Mtech Corporation manufactures and sells various types of building materials products including cementand mortar-type products. Moreover, the Cement segment strives to develop products that can create new businesspossibilities by employing the technologies it has developed in the cement and building material fields. For example,
steps are being taken to roll out Fresco Graph and other cutting-edge techniques that incorporate 3-D modelingtechnologies using Shikkui Lemarge interior design materials and other classic style fresco painting plaster techniques.
Business Unit

Major Products and Services

CementCement, Ready-mixed concrete and Cement-type soil solidifier

Recycling and Environment

Resource recycling business
Cement and Ready-mixed concrete [Hiroshima Ready Mixed Concrete Co., Ltd andGroup Companies
Tokuyama Tsusho Trading Co., Ltd., etc.]

Operating Results for the Fiscal Year ended March 31, 2019
With regard to cement, domestic sales volume was weak and manufacturing costs increased due to a rise in raw material
prices such as coal. As a result, its operating profit decreased.
In the resource recycling business, its business result was almost same as the previous fiscal year.
Consolidated subsidiary net sales increased. This mainly reflected the robust shipping trends of cement-related
products.
As a result of the above, segment net sales increased 5.7% compared with the previous fiscal year, to ¥92,366 million
and operating profit decreased 29.9% to ¥3,204 million. The segment reported lower earnings on higher sales.

13 Tokuyama Corporation Annual Report 2019

Strategies Going Forward
We will work to reduce environment impact and help realize a sustainable society by ensuring the supply ofhigh-quality basic construction materials including cement, contributing to the creation of a strong and rich nation, andpromoting the treatment and recycling of certain waste difficult to dispose by utilizing chemical technologies. Guided
by this basic policy, we will push forward the following priority measures.
■ Cement BusinessTokuyama will improve production efficiency as well as unit consumption and reduce costs focusing mainly on efforts
to increase the use/intake of waste while improving energy efficiency.
We will foster the building materials business focusing mainly on infrastructure maintenance and reinforcement
activities into the next earnings pillar.
■ Recycling and Environment BusinessWe will ensure the stable treatment of waste generated within the Company and assume responsibility for the Group’s
competitiveness while rolling out new environmental businesses using proprietary technologies.

Tokuyama Corporation Annual Report 2019 14

LIFE & AMENITY
The Life & Amenity Division consists of Group companies that
handle such wide-ranging products as polyolefin films, medical
diagnosis systems, dental materials, ion exchange membranes andplastic window sashes. The Division is also in charge of theTokuyama’s Bulk pharmaceutical ingredients / intermediates (MA)business, Plastic lens-related materials for glasses (TS) business andMicroporous film (NF) business.
MA business and TS business, utilizing our organic synthetic
technology to advantage, we are expanding this business witheyeglass lens materials, active pharmaceutical ingredients for genericpharmaceuticals, and intermediates as our main products. NF business,
we manufacture and sell air-permeable films (microporous films) that
repel water but allow air and moisture to penetrate.
Shanghai Tokuyama Plastics Co., Ltd., one of the Group companies
we are responsible for, manufactures and sells air-permeable films
used for disposable diapers.
Business Unit
Bulk pharmaceutical ingredients /intermediates (MA)Plastic lens-related materials forglasses (TS)

Major Products
Bulk pharmaceutical ingredients/intermediates

Photochromic dye materials

Microporous film (NF)

Porum, NF SheetGroup Companies

Polyolefin film [Sun•Tox Co., Ltd.]
Medical diagnosis systems [A&T Corp.]
Dental materials [Tokuyama Dental Corp.]
Ion exchange membranes [ASTOM Corp.]
Plastic window sashes [Excel Shanon Corp.]

Operating Results for the Fiscal Year ended March 31, 2019
With regard to plastic lens-related materials, sales volume of photochromic dye materials for eyeglass lenses increased.
With regard to ion exchange membranes, despite sales volume was steady, its operating profit decreased due tolarge-scale project recorded in the previous fiscal year.
With regard to active pharmaceutical ingredients and intermediates as well as dental materials, the sales volume of eachincreased, and business performance was robust.
As a result of the above, segment net sales increased 5.4% compared with the previous fiscal year, to ¥54,380 million
and operating profit decreased 13.1% to ¥3,238 million. The segment reported lower earnings on higher sales.

15 Tokuyama Corporation Annual Report 2019

Strategies Going Forward
Tokuyama is securing a position of advantage in markets both in Japan and overseas, pursuing business expansion, andcontributing to the improvement of people’s quality of life by establishing and strengthening its customer-oriented
development, manufacturing, and sales structure. Driven by this policy, we will advance the following priority
measures.
■ MA BusinessIn addition to upgrading and expanding the development pipeline and strengthening the profitability of existingproducts, we will accelerate the pace of pharmaceutical peripheral business (cosmetics, supplements, and veterinary
products) roll out.
■ TS BusinessWe will expand market share and cultivate new applications in photochromic dye materials for use in eyeglass lenses.
■ Dental Materials Business (Tokuyama Dental Corporation)
Focusing mainly on aesthetic filling materials (composite resins), we will work to expand the business by rolling out
products in existing fields globally. In addition, we will strengthen the development structure and systems as well as
marketing of next-generation businesses.
■ Medical diagnosis systems Business (A&T Corporation)
We will strengthen global business development and expand sales markets.

Tokuyama Corporation Annual Report 2019 16

Medium-Term Management Plan
OutlineLooking ahead, forecasts for certain existing businesses indicate that the general-purpose product market in Japan willcontract. At the same time, a slowdown in electronic materials business growth is also expected. Under thesecircumstances, Tokuyama recognized the need to create the necessary driving force to propel new profit growth. Guided
by the overarching vision toward “New Foundation” in May 2016, the Company put in place a five-year medium-term
management plan, commencing from fiscal 2016, as the “cornerstone of the Group’s revitalization.”

Going forward, Tokuyama is committed to carrying out the following two priority management strategies by fiscal 2025,
the fiscal year ending March 31, 2026.
1. Transition toward a robust business structure that is resilient against changes in the Company’s operating
environment and is capable of sustainable growth
The Tokuyama Group has set the goal of becoming a global leader in advanced materials through unique technologies
across growth businesses including the Specialty Products as well as Life & Amenity segments together with thedevelopment of new products. In such traditional businesses as the Cement and Chemicals segments, the Group will
work to become a leader in Japan through strengthening competitiveness.
2. Transition to a Group-wide low-cost structure by undertaking a comprehensive review of existing work
practices
The Tokuyama Group will reduce costs by adopting a cross-departmental approach that differs from conventional
methods and undertaking strategic capital expenditures as a part of efforts to cut back principal costs including raw
material, fuel, repairs and maintenance, and distribution expenses.
As the current fiscal year is the middle year of the Medium-Term Management Plan, we have taken stock of the Plan
based on the progress made and the management environment. With a view to realizing its fiscal 2025 aspirations ofbecoming “a global leader in growth businesses” and “a leader in Japan in traditional businesses,” the Company will
formulate clear management strategies while accelerating efforts to prioritize issues to change to a corporate structure
capable of regrowth.
Contributing to sustainable development goals (SDGs) is also essential to enable the Group to aim for sustainablegrowth over the long term. Accurately identifying the environmental and social issues, the Company would like to aim
to realize both improvements in the corporate value of the entire Group and a sustainable society.
1. Change the Group’s organizational culture and structure
Based on the recognition that changing the organizational climate is of the utmost importance in achieving the
Medium-Term Management Plan, the Company is reforming its personnel systems while focusing on human resource
development. Following on from the revision of the personnel evaluation system for managers and employees over theage of 60, we will revise the general personnel systems for union members and aim for the introduction of the new
system in fiscal 2020. The Company expects that the training of human resources and in-house revitalization will be
brought about by the appointment of talented employees at an early stage.
By holding roundtable discussions between the president and some employees and through direct dialog with top
management, the Company will instill its management philosophy while promoting changes in its organizational
culture and structure.

17 Tokuyama Corporation Annual Report 2019

2. Rebuild the Group’s business strategies
To strengthen its presence in ICT-related fields, which are its growth businesses, the Company decided to increase
production plant for photoresist developer and high-purity aluminum nitride powder. By further expanding the supply
system, the Company will aim for more stable supply and promote the development of a wide range of applications.
The Company also established a research laboratory in Taiwan as a new overseas base to expand and improve thecompetitiveness of its semiconductor-related products business. As a result of miniaturized and highly integrate
semiconductors, this laboratory will operate as an information gathering and marketing base for new product creation inorder to respond to the demand for high purification of chemical and materials received from semiconductor
manufacturers. this laboratory will also play a role as a development base that will conduct joint development withsemiconductor manufacturers and research institutes.
3. Strengthen Group management
Having acquired all its shares, the Company made Tokuyama Kairiku Unso K.K. , which handles general logistics, awholly owned subsidiary. Through this move, the company will cooperate with an existing Group company, Tokuyama
Logistics Co., Ltd., to expand the logistics network, and it is expected that the stable supply of products to customers
across the Group will be realized.
4. Improve the Company’s financial position
Having made progress in reducing its interest-bearing debt, the Company achieved a D/E ratio of 1.0 times or less, oneof the goals of the Medium-Term Management Plan, two years ahead of schedule. Subordinated loan refinancing was
conducted with the objective of enhancing the flexibility of the Company’s financial strategy by further diversifying
refinancing methods and reducing financial expenses.
To achieve its financial targets, the Company will promote management efficiency and the reduction of its
interest-bearing debt, while continue its efforts to build a sound financial position.
5. Initiatives toward SDGs
To realize a sustainable society, we extracted the social issues relevant to the Tokuyama Group and identified them asmateriality (important issues to be addressed). Addressing these important issues is linked to the Company’s mission of“Centered on the field of chemistry, the Tokuyama Group will continue to create value that enhances people’s lives.”
Based on this mission, the Company will contribute to the improvement of society and the Group’s value and tosustainable development by resolving materiality.

Progress

Compared with the previous fiscal year ROA deteriorated by 0.99 of a percentage point to 9.5% due to the decrease inoperating profit brought about by increased manufacturing costs, including the prices of raw materials, the inclusion of
a subsidiary in the Company’s scope of consolidation, the recording of a claim for damages under current assets, other,and increased total assets due to an increase in deferred tax assets. Despite an increase in inventories, cash conversion
cycle (CCC) improved by two days compared with the previous fiscal year to 60 days, due to changes in the transaction
conditions of partially purchased items. The D/E ratio was 0.84 times, an improvement of 0.27 compared with theprevious fiscal year, due to the accumulation of profit, the reduction of interest-bearing debt and other factors, and thus
the Company was able to achieve the Medium-Term Management Plan target value of 1.0 times or less ahead of time.
Tokuyama Corporation Annual Report 2019 18

Message from the President

Hiroshi Yokota, President

Looking Back, Up Until Fiscal 2018
Looking back, my first year as the Company’s president started with the posting of a huge impairment loss related toour solar-grade polycrystalline silicon business. Given this situation, we took decisive action, implementing various
reform measures that placed priority on rebuilding our financial platform to ensure the revitalization of the TokuyamaGroup.
In fiscal 2016, my second year, we formulated a medium-term management plan as the “cornerstone of the Group’s
revitalization.” Despite difficult management conditions, operating income substantially exceeded forecasts at the
beginning of the fiscal year owing to the fair winds of falling raw material and fuel costs, among other factors. In
addition, we decided to transfer shares of our consolidated subsidiary for solar-grade polycrystalline silicon, Tokuyama
Malaysia Sdn. Bhd., which had been the cause of considerable concern.
Notwithstanding signs of a surge in raw material and fuel prices, a reversal from the previous fiscal year, we achieved
record high earnings in my third year, fiscal 2017. At the same time, positive steps were taken to complete the transfer
of Tokuyama Malaysia shares to a Korean firm and to acquire in exchange for cash and cancel all Class A shares
totaling ¥20 billion issued by the Company in fiscal 2016.
As was the case in the previous fiscal year, raw material and fuel prices continued to soar in my fourth year, fiscal 2018.
Despite efforts to reduce costs against these difficult headwinds, earnings declined on an operating income basis for the
first time since assuming the position of Tokuyama president. In addition to sluggish semiconductor demand, thisdownturn in earnings largely reflects cutbacks in production attributable to issues with the Group’s in-house power
plant and the external procurement of electricity. Under these circumstances, we addressed concerns regarding thestability of our financial position by refinancing an existing subordinated loan. Focusing largely on the healthcare
domain, businesses that we expect will serve as future earnings pillars also began to bear fruit. This included the robust
start of new products in the dental materials field.

19 Tokuyama Corporation Annual Report 2019

Entering the Fourth Year of the Medium-Term Management Plan:“Change the Group’s
Organizational Culture and Structure”
In order to achieve our Medium-Term Management Plan targets, we have positioned “changes to the Group’s
organizational culture and structure” as a priority theme. As a result, we are placing equal emphasis on maximizing theuse of external human resources while developing the Group’s in-house employees. By actively recruiting outside
personnel, who have excelled in a wide range of industries, we are bringing to the Group new perspectives and ideas.
Their subsequent appointment to the positions of general manager and director is also generating considerable
excitement in the Company’s approach toward work and the manner in which business is conducted. As far as thedevelopment in in-house employees is concerned, we have commenced training programs for employees in their 30s
and 40s selected from Group’s various workplaces. These programs are designed to cultivate a management mindset at
an early age. With an eye toward vigorously promoting diversity, two female employees were appointed to the positionof president at Group companies in fiscal 2018.
Drawing from the Group’s growth businesses, we will continue to invest in ICT, a field that is expected to expand overthe medium to long term. Recognizing that the healthcare domain is an area that requires considerable time from thedevelopment of products to their market release, we will work to definitively clarify an exit vision. As one specificinitiative, we are strengthening our relationships with leading companies in cutting edge ICT fields. Little by little,
steady results are beginning to emerge in connection with the development of new products. As far as our healthcare
endeavors are concerned, we will consistently launch new products while investing in dental materials, plastic
lens-related materials, active pharmaceutical ingredients and intermediates as well as diagnostic reagents and clinicalsystems in a timely manner.

The Importance of Addressing ESG Concerns
There is a strong sense that environmental, social, and governance (ESG) concerns will play an increasingly importantrole in the management of companies going forward. Historically, the Company’s low-cost, coal-fired thermal power
in-house power generation capabilities were recognized as an inherent strength. However, as a source of greenhouse gas
emissions, this strength has transitioned into a significant risk. In order to mitigate this risk, we are undertaking avariety of measures. In addition to reducing the level of CO2 emissions by partially shifting from coal to biomass
materials, we are endeavoring to increase production efficiency and cutback power consumption. At the same time, we
are actively working to develop and commercialize new CO2 technologies with the help of our Research &Development Division.
Rather than work on our own, we recognize the critical need to further advance these initiatives by involving public andlocal authorities. As one example, we are supplying the Company’s surplus power to public facilities in the vicinity ofTokuyama Factory, located in Shunan City, Yamaguchi Prefecture. In addition to supporting the finances of local
government authorities, this initiative is also contributing to an improvement in energy efficiency across the region as awhole. In this manner, we plan to actively engage in a wide range of activities including steps that help enrich local
communities.
From a management organization perspective, we are strengthening corporate governance as a matter of course. In
order to enhance the Company’s overall decision-making process while increasing the pace of implementation, we
intend to change our organizational structure with a view to positioning the decision-making process closer to thefrontline. For this to occur, we understand that the development of human resources is an issue of the utmost
importance.

Fiscal 2019, the Fourth Year of the Medium-Term Management Plan
I am convinced that our actions over the two-year period, from fiscal 2019 to fiscal 2020, are vital to realizing our 2025
vision and will provide the steppingstone for our next leap forward. In this sense, we must position the next two years
as a preparatory period. During fiscal 2019 and fiscal 2020, we must uncover new pillars of expansion while reforming
our organizational culture with a greater sense of urgency. In this manner, we will reap the benefits of the seeds that wehave sown and firmly secure genuine growth over the five years from fiscal 2021. Taking the aforementioned into
consideration, we will undertake annual investments of around ¥30 billion for the foreseeable future.
While efforts to reform the Company remain underway, we are seeing a definitive improvement in business profitability
and the emergence of a number of growth businesses. We kindly request the continued support of shareholders andinvestors as we continue to take up each new challenge.

Hiroshi Yokota, President

June 2019
Tokuyama Corporation Annual Report 2019 20

Research and Development
Research and Development Principles and Policies
Contributing to the world by applying chemistry-based technologies lies at the heart of Tokuyama’s research anddevelopment philosophy. Guided by this philosophy, the Company adheres strictly to a process of internal and external
collaboration in a bid to promote a customer-focused approach. At the same time, we endeavor to integrate newtechnologies drawing on the strengths of our inherently unique and specialist capabilities and engage in research anddevelopment activities with the aim of producing advanced materials that lead the world.
In order to take another step toward a research and development promotion structure that is committed to producing
technologies and materials with genuine commercial application, we organized the research and development activitiesof the Research and Development Division into three broad groups, the Tsukuba Research Laboratory, the Tokuyama
Research Laboratory and the New Business Promotion Dept., and two survey and inspection organizations, theIntellectual Property Dept. and Analytical Science Dept. from July 2017. At each laboratory, we undertake developmentwith our eyes fixed firmly on end results (a genuine commercial outcome) in collaboration with business segments inthe medical and healthcare- as well as ICT-related domains. The New Business Promotion Dept. manages market
information on a centralized basis. This information is then used to uncover and anticipate customers’ needs and theunderlying platform to put forward new proposals. In addition, we recognize the need to help prevent global warming as
an important issue. With this in mind, we will work to better coordinate related departments and division within the
Company and pursue the development of new technologies.

Research and Development Bases
Tokuyama’s two-pronged R&D structure comprises Tsukuba Research Laboratory in Tsukuba City, Ibaraki Prefecture,
in Eastern Japan, and Tokuyama Research Laboratory in Shunan City, Yamaguchi Prefecture, in Western Japan.

Tsukuba Research Laboratory
The Tsukuba Research Laboratory is a
development base that focuses on the medical
and healthcare-related domain. The lab
pursues leading-edge technologies from a
medium- to long-term perspective, conducting
research and development of analysis
techniquesasplatform
technologies,
composite materials used especially in thefield of dentistry, and high-value-added
products targeting the organic fine chemicals
field.

Tsukuba Research Laboratory

Tokuyama Research Laboratory

Tokuyama Research Laboratory
The Tokuyama Research Laboratory is a development base that focuses on the ICT-related domain. Spanning a wide
variety of fields from basic chemicals to cement, the Laboratory engages in a broad array of research and development
activities including basic research, application research, and the development of processes.

R&D Activities in Fiscal 2018
Based on our basic philosophy of "Centered on the field of chemistry, the Tokuyama Group will continue to create
value that enhances people’s lives ", Tokuyama is doing Research and Development with aiming to expand and develop
each business based on chemistry, with priority areas being "Specialty Chemicals for ICT and Healthcare".
The Research and Development Division comprises a five-department system of the Tsukuba and Tokuyama researchlaboratories, the New Business Promotion Department, Analytical Science Department and Intellectual Property
Department. In collaboration with business division development groups attached to each segment, the Research andDevelopment Division is developing technologies for next-generation themes and themes related to existing businesses
in the development portfolios of business divisions and Group companies.
From April 2018, the development of silica-related products and chloride-related products as well as semiconductor
peripheral materials, which had been dispersed among multiple business division development groups, wasconcentrated in the Research and Development Division. At the same time, to strengthen the quality control ofdeveloped products, we established the Research & Development Quality Assurance Sect. within the Research and

21 Tokuyama Corporation Annual Report 2019

Development Division. We also actively promoted collaborative research with universities and research institutes. In
March 2019, the Taiwan Research Laboratory opened within the Industrial Technology Research Institute of Taiwan forthe purposes of collecting information on IoT-related technologies and developing measurement technologies.
The main themes at the Tsukuba and Tokuyama research laboratories are the development of single crystal aluminum
nitride substrates, semiconductor peripheral materials, organic and inorganic composite materials, nanoparticles
materials, chlorine compound materials, medical materials, and veterinary peripheral materials.
The New Business Promotion Department engages in marketing in cooperation with internal and external organizations,fine-tuning its business strategies and proprietary technologies starting with customers, and is tasked with creating newthemes in the fields of IoT and life sciences. The Intellectual Property Department contributes to the creation of new
products and businesses and the expansion of group profits through its strategic intellectual property management
capabilities, and the Analytical Science Department aims to contribute to the semiconductor peripheral materials
business by advancing analysis and analysis technologies.
In fiscal year ended March 31, 2019, the Tokuyama Group’s R&D spending totaled ¥8,052 million, including ¥1,962
million for basic research expenditures that are not allocable to a specific segment.
Below is a description of R&D projects underway and spending by segment.
Chemicals Segment
Tokuyama develops technologies to cope with needs of environmental load reduction of chlorine-related products,
reduce costs by improving production efficiency, and maintain and improve product quality. With vinyl chloride resin,
Tokuyama also strengthened its technical services to supply products according to customers' requests, and actively
worked on developing new grades that make use of the findings acquired from technical service. In developing
inorganic chemicals, Tokuyama focused on investigating marketability based on customer evaluation, improvement ofphysical properties and manufacturing process. The Company is also working on technological developments to
produce hydrogen from renewable energy.
R&D expenditures totaled ¥ 279 million in the Chemicals segment.
Specialty Products Segment
With regards to silica, Tokuyama has upgraded its existing fumed silica products and developed new conformal silica,
undertaken capital investment for developed products approved by customers, and accelerated efforts toward theircommercialization. As for heat dissipating materials, in addition to aluminum nitride filler used in heat dissipationmaterials, such as power semiconductors and LEDs, Tokuyama has made preparations for the trial manufacture of boron
nitride fillers and silicon nitride powder and made progress with customer evaluations. With regard to its high-purity
chemicals for the electronics industry, Tokuyama enhanced its development system to meet the high purification needs
associated with the miniaturization and three-dimensional process of semiconductor devices.
R&D expenditures came to ¥ 1,993 million in the Specialty Products segment.
Cement Segment
Tokuyama focused on the development of a variety of cement-based products. Wit regard to cement-based soil
solidifiers, we actively worked on the development and improvement of various grades. In the case of building
materials, we focused on developing products that have applications in the repair and reinforcement of concrete
structures field, such as in cross-section repairing materials and in repair and reinforcement materials for road slabs.
Focusing on applications outside of cement manufacturing processes, Tokuyama has concentrated on developing
technologies to effectively use coal ash and waste gypsum boards. As basic research on cement, Tokuyama continued to
examine the reduction of burning temperature of cement clinker from the viewpoint of energy saving.
R&D expenditures were ¥755 million in the Cement segment.
Life & Amenity Segment
We made progress developing next-generation photochromic dye materials for lenses-related materials. We also workedon the development of manufacturing processes for active pharmaceutical ingredients. In the healthcare and clinicaltesting fields, marked progress was made on the integrated development of products including diagnostic reagents andlaboratory information systems, clinical analyzers, and laboratory automation systems. In the dental care field,
continued steps were taken to develop products such as restorative composite resins, dental adhesives and dental resin
composite block. In ion exchange membranes, progress was made on the development of high-efficiency bipolar
membrane electrodialysis technology, highly functional ion exchange membranes, and other products.
R&D expenditures totaled ¥3,062 million in the Life & Amenity segment.

Tokuyama Corporation Annual Report 2019 22

CSR Initiatives
As part of our vision established in May 2016, Tokuyama chose the mission of contributing to the world by applying
chemistry-based technologies, and interprets the pursuit of this mission as a CSR activity.
Similarly, we are aspiring to shift from quantity to quality under this vision and are expanding business in pursuit of thisgoal. When aiming for growth that does not focus solely on expanding scale, but that coincides with quality,
CSR-oriented management becomes essential. Tokuyama reviewed its basic philosophy of CSR-oriented managementin March 2018, at which time we set out to contribute to solving social issues through activities that co-create asustainable future with society.
As Tokuyama's mission (CSR), contributing to the world has two facets, namely creating products that help solve social
issues and fulfilling the social responsibilities that are part of our business process. We place equal weight on risk
management and compliance through research and development in terms of the former and by positioning internal
control as the heart of our CSR activities in terms of the latter. As a chemical manufacturer, Tokuyama gives utmost
priority to exercising Responsible Care through the consistent operation and enhancement of management systems forsafety, the environment, and quality.

Involvement in the Environment
One of our most important corporate social responsibilities is to actively protect the global environment. Tokuyama
practices environmental management with an emphasis on environmental perspectives in all of its business activities

Tokuyama’s Environmental Performance for Fiscal 2018
Tokuyama strives to obtain accurate data on the input and output of materials and substances in its business activities
and reduce the environmental impact of these activities to meet its environmental targets.
In fiscal 2018, Tokuyama achieved its goals for unit energy consumption, recycling and zero emissions. Regarding otherperformance data, Tokuyama has set a separate numerical management target for each department to maintain thecurrent low-impact situation.

Involvement in Society

23 Tokuyama Corporation Annual Report 2019

Tokuyama values communication with diverse stakeholders as the key to working with the broader society to build asustainable future.

Social Contribution Activities
As a company deemed essential by society, Tokuyama carries out various activities to forge strong ties with local
communities. Both the Company, as a matter of course, and its employees take the initiative in deepening interaction
with everyone in the community.

Supporting the growth of children through the ACS Kids private-sector after-school care facility
Shunan Swimming Club, which operates a swimming and fitness club that uses the exhaust heat from the Tokuyama
Factory, runs a private-sector after-school care facility established to support play and learning among children during
the first three years of elementary school. Until 7:00 pm on weekdays, children can attend swimming, tennis, dance, andother activity classes that foster basic athletic abilities, as well as participate in a wide range of programs that include
homework and learning support, pen calligraphy, and English conversation. As an after-school care facility wherechildren learn well, play well, and grow strong, ACS Kids is helping to expand the potential of the children who will be
responsible for future generations.

Process Safety, Disaster Prevention and Occupational Health and Safety
Tokuyama believes that safety is an essential part of business activities and that ensuring safety is the first step inachieving coexistence with society. In taking this stance on safety, Tokuyama thoroughly conducts process safety anddisaster prevention activities as well as occupational health and safety efforts. By doing so, the Company endeavors toprevent accidents and disasters while striving to provide a favorable working environment.

For more information on Tokuyama's CSR initiatives, see the Company's CSR Report or the Company's website:
https://www.tokuyama.co.jp/eng/csr/index.html

Tokuyama Corporation Annual Report 2019 24

Corporate GovernanceTokuyama strongly believes creating and continuously providing new value is made possible through the trust of andcooperation with its stakeholders, which include shareholders, customers, trading partners, employees and local
communities. This in turn enables the Company to grow on a sustainable basis and to increase its corporate value overthe medium to long term. In order to make this a reality, Tokuyama has positioned corporate governance as a key
management priority. Tokuyama has always been working to improve corporate governance. Taking into consideration
the introduction of the Corporate Governance Code in Japan, the Company places the utmost emphasis on ensuring therights and equality of its shareholders while strengthening the supervisory function and securing the independence of
the Board of Directors. At the same time, Tokuyama works diligently to accelerate decision making and to clarify thebusiness execution responsibilities of its Board of Directors while ensuring appropriate disclosure and transparency andpromoting constructive dialogue with shareholders.

Corporate Governance Structure
The Company introduced an executive officer system to separate the supervision and execution functions in April 2011,
assigning external directors in June of the said year. The number of external directors was subsequently increased instages. On June, 2017, the Company transitioned from a company with a Board of Auditors to a company with an Audit
and Supervisory Committee. The Audit and Supervisory Committee selects three external directors from fourCommittee members and endeavors to ensure management transparency and fairness. By doing so, it strives to maintainmanagement soundness. As a company with an Audit and Supervisory Committee, the Company seeks to enhance
corporate governance at all times by making the best of its rapid decision-making functions and effective
supervising/auditing functions.

Board of Directors and Executive Officer System
In addition to deliberating and making resolutions on important matters relating to the activities of the Company, theBoard of Directors supervises business operations. During fiscal 2018, the Board of Directors met on 17 occasions.
As of June 24, 2019, Tokuyama’s Board of Directors comprised 8 members. The Company appointed three external
directors thereby bolstering the supervisory function of the Board of Directors. Meanwhile, the term of office of
directors (excluding directors who are Audit and Supervisory Committee members) is set at one year in order to ensure clear
accountability as well as the ability to swiftly address changes in the operating environment.
Tokuyama adopted an executive officer system in April 2011 with the aim of separating the executive and supervisory

25 Tokuyama Corporation Annual Report 2019functions for business operations. As of June 24, 2019, the Company had 11 executive officers.
Based on the rules for approval determined by the Board of Directors, authority is delegated to the business executive
system.

Audit and Supervisory Committee
Directors who are Audit and Supervisory Committee members attend meetings of the Board of Directors and otherimportant internal meetings for purposes such as gathering information on the status of the execution of businesses, andconduct audits of how the executive officers are executing their duties. During fiscal 2018, Audit and Supervisory
Committee met on 25 occasions, making reports, consultations and resolutions on important matters. As of June 24,
2019, the Audit and Supervisory Committee consists of four directors who are the members of the Committee, including
three external directors who are Audit and Supervisory Committee members.

Human Resources Committee
The Human Resources Committee consists of representative directors and external directors. This committee holds
discussions on such matters as the remuneration for directors and executive officers and the selection of director andexecutive officer candidates before Board of Directors meetings take place.

Executive Committee
Members of the Executive Committee are selected by the president and executive officer from among the Company’s
executive officers. The Executive Committee serves as the Company’s decision-making body with respect to the
execution of business operations. In principle, the committee meets two times each month. Based on the approval rules
and regulations determined by the Board of Directors, the Executive Committee deliberates and makes decisions on
strategies and other important matters.

Strategy Committee
Members of the Strategy Committee are selected by the president from among the Company’s executive officers. The
committee meets once a month and serves as an advisory body to the president. In addition to deliberating on the
direction of business execution, the Committee takes steps to confirm the allocation of management resources aimed atevaluating conditions relating to the execution of business with respect to important matters requiring approval whilesetting the direction of policies relating to the execution of business with respect to specific projects.

CSR Promotion Council
Chaired by the president, the CSR Promotion Council is comprised of all executive officers working in Japan. The
Council sets policies on CSR and lays out the goals of our CSR activities, facilitating the execution and attainment of all
such activities and goals. The Council focuses on maintaining appropriate corporate governance and internal control,
which together are the foundations of CSR. It also discusses important matters regarding internal control.

Risk Management and Compliance Committee
Tokuyama’s Risk Management and Compliance Committee, chaired by the director supervising the Corporate Social
Responsibility Division, operates under the CSR Promotion Council. The Committee takes the initiative in promoting
risk management and compliance, which are central to effective internal control.

Seven Committees of Experts
With regard to areas requiring specialist expertise and of great importance from the viewpoint of risk management andcompliance, the Company has set up and is developing the activities of seven committees of experts—covering
accounting, antitrust law and competition law compliance, trade control, information security, environmental measures,
safety measures, product safety and quality—under the CSR Promotion Committee and separate from the Risk andCompliance Committee.

Helpline Committee
The Helpline Committee is responsible for the administration of Tokuyama’s helpline (whistle-blowing) system, which
has been established for the purpose of enabling the internal reporting of legally questionable actions and behavior byGroup executives and employees.

Departments Responsible for Internal Auditing
Tokuyama has established the Auditing Department and the RC Management Department, which are responsible forinternal auditing. These departments perform internal audits of individual divisions and departments of the Company aswell as of Group companies.

Tokuyama Corporation Annual Report 2019 26

Policies and Procedures when the Board of Directors Selects/Dismisses Management
Executives and Nominates Director and Auditor Candidates
To enable the direction and supervision of business execution as well as appropriate decision making with regard to theCompany’s business operations, which are centered on chemicals, the selection of executive officers and thenomination of internal candidates for directorships appoints people who are well-balanced in terms of their knowledgeof each business segment and area as well as the experience they possess.
When nominating executive officer and director candidates (excluding directors who are Audit and Supervisory
Committee members), discussions are held at a Human Resources Committee meeting in advance of the subject
appearing on the agenda at a Board of Directors’ meeting., The Human Resources Committee is an entity thatcomprises representative directors and external directors. The Board of Directors makes its decisions in response to the
Human Resources Committee’s report.
In the case of the nomination of directors who are Audit and Supervisory Committee members candidates, the Board of
Directors makes its decisions having received the assent of the Audit and Supervisory Committee.

Policies and Procedures for Determining the Company’s Executives Remuneration
Matters Concerning Policy with Regard to Amount of Executive Remuneration and Methods Used for Calculation
1. Based on the executive remuneration rules and executive remuneration stock issuance rules, the remuneration of theCompany’s executives (excluding directors who are Audit and Supervisory Committee members) comprises fixed basic
remuneration and performance-linked stock remuneration, the specific calculations of which will be made by the
representative director, president and executive officer upon authorization by the Board of Directors in accordance withthe following policy.
(a) In the fixed portion, the basic remuneration is calculated by taking into consideration the previous year’s
consolidated performance and the achievement level of each director’s business goals.
(b) To realize the Company’s Medium-Term Management Plan, performance-linked stock remuneration has been
introduced from September 2018 to clarify the link between executive remuneration and the corporate value of theCompany.
Consolidated operating income and other indicators, which are the main financial targets of the Medium-Term
Management Plan, have been adopted as indicators for performance-linked remuneration. Based on the achievementlevel for the fiscal year ending March 31, 2021, which is the final fiscal year of the target period, the system involves
the issuance of stock, etc. of the Company as executive remuneration.
(c) The appropriateness of the level of remuneration, etc. is to be confirmed based on the findings of surveys ofdomestic competitors and comparable companies obtained from a remuneration research company.
2. Remuneration for directors who are Audit and Supervisory Committee members is limited to fixed remuneration only,
taking into consideration the distinction between full- and part-time work, the status of the division of audit duties, andthe content and level of remuneration of directors. This is decided following discussions with directors who are Audit
and Supervisory Committee members.
3. To achieve more transparent and objective management from the perspective of corporate governance, we have set
up a Human Resources Committee, comprising a majority of external directors, who have the task of deliberating
personnel matters and remuneration concerning officers and making reports or recommendations to the Board of
Directors. The content of executives’ remuneration (excluding directors who are Audit and Supervisory Committee
members) is calculated in detail by the representative director, president and executive officer and discussed anddetermined by the Board of Directors after deliberation by the Human Resources Committee.
In fiscal 2018, a total of ¥262 million and ¥50 million was paid to seven directors (excluding external directors) and two
Audit and Supervisory Board members (excluding external directors), respectively. In addition to the aforementioned
compensation, a total of ¥40 million was paid to three external officers.
In addition to the aforementioned compensation, an amount of ¥48 million was paid as salaries to four employees, whohold the concurrent position of director.

Anti-takeover Measures
Tokuyama recognizes the need to put in place appropriate countermeasures to protect both the interests of theCompany’s shareholders and the Company’s corporate value from large-scale purchases of its shares (hereinafterreferred to as a “Large-Scale Purchase”) by another party (hereinafter referred to as a “Large-Scale Purchaser”) in cases
where the Large-Scale Purchase is judged to significantly damage the common interests of Tokuyama’s shareholders
and Tokuyama’s corporate value.
The decision of whether to accept a Large-Scale Purchase is ultimately left to the discretion of Tokuyama’s shareholders.
Consequently, in cases where a Large-Scale Purchase is being attempted, we believe that the Large-Scale Purchaser’s

27 Tokuyama Corporation Annual Report 2019

provision of an adequate amount of information is necessary. In addition, we believe that the appraisal and opinions ofTokuyama’s Board of Directors, as well as the provision of information and the like based on the business features
pertaining to any Large-Scale Purchase, are critical for the shareholders to make a decision of whether to accept said
Large-Scale Purchase, and contribute to the common interests of Tokuyama’s shareholders.
Accordingly, the Company established a set of large-scale purchase rules to ensure that these interests and theCompany’s corporate value are preserved. Under these rules, each Large-Scale Purchaser is required to provide anadequate amount of information to Tokuyama’s Board of Directors prior to undertaking a Large-Scale Purchase.
Moreover, an appropriate amount of time must be set aside to allow the Company’s Board of Directors to assess andconsider the terms and conditions of the Large-Scale Purchase and to put forward its opinion as well as alternative
proposals.
In cases where a Large-Scale Purchaser fails to comply with the large-scale purchase rules, or when a Large-Scale
Purchaser complies with the large-scale purchase rules, but is deemed to significantly damage the common interests of
the Company’s shareholders and the Company’s corporate value, Tokuyama’s Board of Directors may take suchmeasures as the allotment of share options without contribution as stipulated under Article 277 and the following
provisions of Japan’s Companies Act and oppose the Large-Scale Purchase on the condition that the Company obtains
approval at the Ordinary General Meeting of Shareholders concerning.
Specific details outlined above were collated into the Company’s “Policy regarding Large-scale Purchases of Tokuyama
Corporation's Company Shares (Anti-Takeover Measures).” This policy was approved by the Company’s shareholders
at the 154th Ordinary General Meeting of Shareholders held on June 22, 2018.
Details of the Policy have been posted on the Company’s website:
URL: https://www.tokuyama.co.jp/eng/ir/stock/anti_takeover.html

Tokuyama Corporation Annual Report 2019 28

Business and Other Risks
Set out below are those matters relevant to the Tokuyama Group’s business status and financial conditions that could
potentially have a significant influence on investor decisions. Please note that the matters listed do not cover all risks
relevant to the Tokuyama Group, and it is thought that there are risks other than those matters listed that could
potentially influence investor decisions.
The matters listed are those regarded as relevant as at June 24, 2019.

(1) Procurement/Market Conditions of Raw Materials and Fuels, etc.
Tokuyama Group procures the raw materials and fuels essential to conduct production operations from various area inthe world. Also, for some of its products, Tokuyama Group uses special raw materials and materials which have alimited number of suppliers. With regard to the procurement of raw materials and fuels, Tokuyama Group engages inlong-term, stable, low-cost procurement by combining, for example, medium- to long-term contracts and purchases on
spot markets. However, in the event that a soaring market or resource nationalism causes the tight supply of raw
materials and fuels or delays in delivery hinders Tokuyama Group’s production operations causing manufacturing costs
to rise drastically, there is the possibility that any such situation greatly affects Tokuyama Group’s business performanceand financial condition.

(2) Electronic Materials Business Market Environment
While the Electronic Materials Business is one of Tokuyama Group’s main businesses, in the event that the economical
trough in the information and electronics industry leads to a deterioration of the earnings from Electronics Materials
Business, there is the possibility that any such situation greatly affects Tokuyama Group’s business performance andfinancial condition.

(3) Environmental Regulations, etc.
Tokuyama Group operates a range of businesses that use natural resources and energy in large quantities. TokuyamaGroup enhances the investment in resource recycling systems and the facility designed to reduce its environmental
impact and accepts waste as an alternative fuel and raw materials. At the same time, Tokuyama Group also works to
reduce its environmental impact by, for example, promoting Zero Emission initiatives and improving its unit energy
consumption. However, in the event that more stringent environment-related regulation is approved or a new social
responsibility for environmental protection becomes required, there is the possibility that any such situation greatly
affects Tokuyama Group’s business performance and financial condition.

(4) Contractual Disputes/Litigation
The Legal & Credit Management Department and the Intellectual Property Department of Tokuyama Groups take leadin day-to-day precaution against patent or contract disputes and litigation. However, in both its domestic and overseas
businesses, there exists the possibility that Tokuyama Group becomes the subject of a legal dispute or litigation. In theevent that a major lawsuit is filed, there is the possibility that such a situation greatly affects Tokuyama Group’sbusiness performance and financial condition.

(5) Effect of Disasters/Accidents
Tokuyama Group performs day-to-day and periodic facility maintenance to minimize the adverse effects from any
disruption to its production operations. Such maintenance, however, is unable to completely prevent or may noteffectively reduce the adverse effects on production facilities from disasters or accidents (including earthquakes andother natural disasters). Also, while Tokuyama Group manufactures products for which alternative production
arrangements could not immediately be made, should events lead to a significant decrease in production volume or, inthe worst case, Tokuyama Group be forced to discontinue production for a protracted period, there is the possibility thatany such situation greatly affects Tokuyama Group’s business performance and financial condition.

(6) Product Liability
Tokuyama Group makes an honest effort to ensure the proper quality in accordance with product characteristics.
However, in the event that, due to unexpected circumstances, a quality problem leads to a product recall or a productsafety-related product liability (PL) issue arises, there is the possibility that any such situation greatly affects TokuyamaGroup’s business performance and financial condition.

29 Tokuyama Corporation Annual Report 2019

(7) Market Economic Trends/Conditions
The supply of and demand for Tokuyama Group products are subject to the trends of their respective markets, which areprimarily the chemical industries, the construction and construction material industries as well as the information andelectronic industries. The products from Tokuyama Group are sold mainly in Japan, the United States, Asia, and Europe,and the economic conditions in such country could exert a great influence on the sales. Tokuyama Group targets
production improvements and higher quality and also promotes cost reductions however a fall in demand in the market
and industries or an economic slowdown in the sales area may greatly affect Tokuyama Group’s business performanceand financial condition.

(8) Price CompetitivenessIn each of the business that Tokuyama Group conducts, similar products may be available from competitors. TokuyamaGroup supplies products to customers maintaining a competitive advantage in terms of quality and price. However, inthe event that low-cost imported products flood the market or a price war breaks out between rival companies due tounforeseen circumstances, and that the situation continues for a prolonged period of time deteriorating TokuyamaGroup’s profitability, there is the possibility that any such situation greatly affects Tokuyama Group’s businessperformance and financial condition.

(9) Overseas Business Development
The polycrystalline silicon factory that Tokuyama Group built in the Malaysian state of Sarawak is comparatively larger
in scale than Tokuyama Group’s other existing overseas facilities. In the event that the stable operation or sales isdisturbed, unexpected changes are made to the society system, laws and regulations or labor-management problems
arise, there is the possibility that any such situation greatly affects Tokuyama Group’s business performance andfinancial condition.

(10) Financing Arrangements
Tokuyama Group arranges financing through loans or issuance of unsecured bonds, and in preparation for changes in
the market environment such as interest rates, in principle, measures to mitigate risks by hedging transactions such as
fixed rate contracts or fixed interest rate swaps, however, there is a possibility that with some borrowing, cost offinancing arrangements could increase due to changes in the market environment such as interest rate, which may havea significant impact on the performance and financial contents of the Tokuyama Group. In addition to changes in themarket environment such as interest rates, depending on the credit ratings or other conditions, there is no guarantee thatthe financing is always available under same conditions in arranging financing through a new loan from a financial
institution or the issuance of unsecured bonds.

(11) Fluctuation of Exchange Rate
Tokuyama Group exports products and imports raw materials, fuels, etc in foreign currencies. Although TokuyamaGroup has taken measures to reduce risks by currency exposure management by balancing assets and liabilities
denominated in foreign currencies or hedging transactions such as forward exchange contracts, there is a possibility that
performance and financial content of the Tokuyama Group will be greatly affected by fluctuations in exchange rates.
There is also the possibility that it will adversely affect the yen converted value of the financial statements of overseas
consolidated subsidiaries when preparing consolidated financial statements.

(12) Impairment of Fixed Assets
Tokuyama Group adopts the accounting standard for impairment of fixed assets. In the event that there is a significant
deterioration in the business environment or a decline in real estate prices, etc, there is a possibility that performanceand financial content of the Tokuyama Group will be greatly affected by the recognition of impairment loss.

Tokuyama Corporation Annual Report 2019 30

Corporate Officers(As of June 24, 2019)

Hiroshi Yokota

Hideki Adachi

Representative Director
President and Executive Officer

Representative Director
Senior Managing Executive Officer

Hideo Sugimura

Hiroshi Nomura

Director
Director
Managing Executive Officer Managing Executive Officer

Youji Miyamoto

Shin Kato

Yuzo Kawamori

Naoki Matsumoto

Director, Audit &Supervisory Committee
Chair

Director, Audit &Supervisory Committee
Member（External Director）

Director, Audit &Supervisory Committee
Member（External Director）

Director, Audit &Supervisory Committee
Member（External Director）

31 Tokuyama Corporation Annual Report 2019

Executive Officers
President and Executive Officer

Hiroshi Yokota

Senior Managing Executive Officer

Hideki Adachi

General Manager, Tokuyama Factory

Toshihiko Annaka

General Manager, Procurement & Logistics Div.

Ryo Sugiyama

General Manager, Life & Amenity Business Div.

Hideo Sugimura

General Manager, Corporate Planning Div.

Hiroshi Nomura

General Manager, Specialty Products Business Div.

Kazuo Matsuya

General Manager, Social Responsibility Div.

Fumiaki Iwasaki

General Manager, Research & Development Div.
and Tsukuba Research Laboratory

Takahide Taniguchi

General Manager, Cement Business Div.

Yutaka Tarutani

General Manager, Chemicals Business Div.

Hiroshi Fujimoto

General Manager, General & Personnel Affairs Div.

Managing Executive Officer

Executive Officer

Tokuyama Corporation Annual Report 2019 32

33 Tokuyama Corporation Annual Report 2019

Financial Section
Financial Review

35

Consolidated Balance Sheets

41

Consolidated Statements of Income

43

Consolidated Statements of Comprehensive Income

44

Consolidated Statements of Changes in Net Assets

45

Consolidated Statements of Cash Flows46

Notes to Consolidated Financial Statements

47

Tokuyama Corporation Annual Report 2019 34

Financial Review

Income Analysis
In fiscal 2018 (April 1, 2018 to March 31, 2019), the Japanese economy initially recorded high growth, mainly due toincreases in personal consumption and capital investment. From summer onwards, however, consumption decreased
against a backdrop of delays in production and logistics due to the effects of a series of natural disasters and a decreasein customers. In addition, IT-related exports stagnated due to the sense of a lull in demand for smartphones and data
centers, which had previously been expected to remain robust, and the onset of bearish stock market conditions due tothe recovery in the Chinese economy being seen as having stalled.
Under these circumstances, the Tokuyama Group continued to implement the priority measures identified in its
Medium-Term Management Plan.
As a result, sales increased due to efforts to increase sales volumes and revise sales prices, but operating profit
decreased due to increases in raw material and fuel costs brought about by rising prices for coal and domestic naphtha.
Consolidated net sales increased 5.4%, or ¥16,599 million compared with the previous fiscal year, to ¥324,661 million(US$2,924 million). This was largely attributable to an increased sales volume in products such as
semiconductor-related products and revision in selling prices of products such as caustic soda.
Cost of sales increased 9.1%, or ¥18,949 million compared with the previous fiscal year, to ¥226,664 million(US$2,042 million). This was due mainly to an upturn in raw material and fuel costs as a result of the increase in coalprices and domestic naphtha.
SG&A expenses increased 6.2%, or ¥3,655 million compared with the previous fiscal year, to ¥62,733 million (US$565
million). This was largely attributable to the increase in logistics costs.
Operating profit decreased 14.6%, or ¥6,005 million compared with the previous fiscal year, to ¥35,262 million(US$317 million). Despite sales in each business remained steady, the increase in manufacturing costs including the risein raw material and fuel costs affected the operating profit of each segment.
The operating margin (the ratio of operating profit to net sales) was 10.9 %, a decrease of 2.5 percentage points
compared with the figure of 13.4% recorded in the previous fiscal year.

35 Tokuyama Corporation Annual Report 2019

Non-operating income/expenses deteriorated ¥3,209 million compared with the previous fiscal year.
As a result of the above, ordinary profit decreased 7.7%, or ¥2,795 million compared with the previous fiscal year, to¥33,400 million (US$300 million).
Extraordinary income/losses improved by ¥7,917 million compared with the previous fiscal year.
As a result of the above, profit before income taxes increased 15.6%, or ¥5,122 million compared with the previous
fiscal year, to ¥38,017 million (US$342 million).
Profit after deducting income taxes calculated in an appropriate way increased 38.0%, or ¥9,648 million compared withthe previous fiscal year, to ¥35,029 million (US$315 million).
Profit attributable to owners of parent increased 74.0%, or ¥14,580 million compared with the previous fiscal year, to¥34,279 million (US$308 million).
Basic earnings per share was profit of ¥493.26 (US$4.444), up from ¥259.81 in the previous fiscal year. Dividends per
share were ¥50.00 (US$0.450).
Return on equity (ROE) and return on assets (ROA: operating profit /total assets) were24.6% and 9.5%, respectively,
compared with 15.6% and 10.5% in the previous fiscal year.

Tokuyama Corporation Annual Report 2019 36

Segment Information
The Tokuyama Group is composed of the parent company, Tokuyama Corporation (“the Company”), 52 subsidiaries
and 30 affiliated companies. The Group’s operations are divided into the four business segments of Chemicals,
Specialty Products, Cement, and Life & Amenity. For accounting purposes, 52 of the Company’s subsidiaries areconsolidated, while 9 affiliates are accounted for using the equity method.
Chemicals
The Chemicals segment includes the operations of the Company and three consolidated subsidiaries.
With regard to caustic soda, the revision of selling prices was progressed. As a result, its operating profit increased
greatly.
Sales volume of vinyl chloride resin was steady. Meanwhile, manufacturing costs increased due to a rise in raw material
prices such as domestic naphtha. As a result, its operating profit decreased.
Calcium chloride sales volume decreased and operating profit was down due to the effects of a warm winter.
As a result of the above, segment net sales increased 5.2% compared with the previous fiscal year, to ¥98,380 million(US$886 million) and operating profit increased 4.2% to ¥16,850 million (US$151 million). The segment reported
higher earnings on higher sales.
Specialty Products
The Specialty Products segment includes the operations of the Company, five consolidated subsidiaries and one
equity-method affiliate.
Sales volume of semiconductor-grade polycrystalline silicon was steady. Meanwhile, manufacturing costs increased due
to an upturn in fuel and raw material costs. As a result, its operating profit decreased.
With regard to high-purity chemicals for electronics manufacturing, sales volume was steady. Meanwhile,
manufacturing costs increased due to a rise in raw material prices such as domestic naphtha. As a result, its operating
profit decreased.
With regard to thermal management material, sales volume in such applications used for semiconductor manufacturing
equipment increased and the business did well.
As a result of the above, segment net sales increased 1.7% compared with the previous fiscal year, to ¥59,668 million(US$537 million) and operating profit decreased 9.7% to ¥9,934 million (US$89 million). The segment reported lower
earnings on higher sales.
Cement
The Cement segment comprises the operations of the Company, 17 consolidated subsidiaries and four equity-method
affiliates.
With regard to cement, domestic sales volume was weak and manufacturing costs increased due to a rise in raw material
prices such as coal. As a result, its operating profit decreased.
In the resource recycling business, its business result was almost same as the previous fiscal year.
Consolidated subsidiary net sales increased. This mainly reflected the robust shipping trends of cement-related
products.
As a result of the above, segment net sales increased 5.7% compared with the previous fiscal year, to ¥92,366 million(US$832 million) and operating profit decreased 29.9% to ¥3,204 million (US$28 million). The segment reported lower
earnings on higher sales.

37 Tokuyama Corporation Annual Report 2019

Life & Amenity
The Life & Amenity segment includes the operations of the Company, 11 consolidated subsidiaries and one
equity-method affiliate.
With regard to plastic lens-related materials, sales volume of photochromic dye materials for eyeglass lenses increased.
With regard to ion exchange membranes, despite sales volume was steady, its operating profit decreased due tolarge-scale project recorded in the previous fiscal year.
With regard to active pharmaceutical ingredients and intermediates as well as dental materials, the sales volume of eachincreased, and business performance was robust.
As a result of the above, segment net sales increased 5.4% compared with the previous fiscal year, to ¥ 54,380 million(US$489 million) and operating profit decreased 13.1% to ¥ 3,238 million (US$29 million). The segment reported
lower earnings on higher sales.

Tokuyama Corporation Annual Report 2019 38

Financial Position and Liquidity
As of March 31, 2019, total assets amounted to ¥379,630 million (US$3,420 million), an increase of ¥17,680 million
compared with the previous fiscal year-end.
Current assets increased 6.2% compared with the previous fiscal year-end to ¥202,936 million (US$1,828 million). Thiswas due primarily to an increase in cash and cash equivalents. Current liabilities increased 0.2% to ¥93,248 million(US$840 million). This mainly reflected an increase in short-term loans payable. As a result, the current ratio was up to
2.18 times, from 2.05 times as of the previous fiscal year-end.
Property, plant and equipment increased 5.3% in comparison with the previous fiscal year-end to ¥116,104 million(US$1,045 million). This was primarily due to the inclusion of a new subsidiary in the Company’s scope of
consolidation. Intangible assets and investments and other assets decreased 0.1% over the previous fiscal year-end to¥60,588 million (US$545 million). This was primarily due to the securities.
As of March 31, 2019, total liabilities amounted to ¥216,104 million (US$1,946 million), a decrease of 4.1% comparedwith the previous fiscal year-end figure of ¥225,357 million. The main contributory factor was a decrease in long-termloans payable and current portion of long-term loans payable. Interest-bearing debt decreased 7.8% from ¥ 139,917
million as of the previous fiscal year-end to ¥128,966 million (US$1,161 million).
Non-controlling interests decreased 1.8% from ¥10,935 million as of the previous fiscal year-end to ¥10,743 million(US$96 million). Net assets increased 19.7% compared with the previous fiscal year-end, from ¥136,591 million to¥ 163,525 million (US$1,473 million). The ratio of shareholders’ equity to total assets was 40.2%, up from 34.7% as ofthe previous fiscal year-end. The amount of net assets per share was ¥2,199.83 (US$19.818), up from ¥1,806.56 as ofthe previous fiscal year-end.

39 Tokuyama Corporation Annual Report 2019

Capital Expenditures
Capital expenditures totaled ¥18,581 million (US$167 million), an increase of 16.6% compared with the previous fiscal
year’s figure of ¥15,941 million.

Cash FlowsNet cash provided by operating activities totaled ¥38,531 million (US$347 million). Principal items included profit
before income tax of ¥38,017 million (US$342 million) (¥32,895 million in the previous fiscal year).
Net cash used by investing activities totaled ¥16,174 million (US$145 million). Major contributory factors were
payments for purchases of property, plant and equipment of ¥16,765 million (US$151 million) (¥15,526 million in theprevious fiscal year).
Net cash used in financing activities came to ¥21,104 million (US$190 million). This was primarily attributable toProceeds from long-term loans payable of ¥59,713 million (US$537 million) (¥10,120 million in the previous fiscal
year), Repayments of long-term loans payable of ¥76,512 (US$689 million) (¥50,384 million in the previous fiscal
year).
As a result of the above, cash and cash equivalents increased by ¥1,184 million (US$10 million) compared with theprevious fiscal year-end, to ¥67,991 million (US$612 million).

Tokuyama Corporation Annual Report 2019 40

Consolidated Balance Sheets
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31, 2019 and 2018

Millions of yen
2019
2018
Assets :Current assets :Cash and deposits *Note(2)Notes and accounts receivable - trade *Note(8)Lease receivables
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets :Property, plant and equipment :Buildings and structures *Note(2), (3)Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles *Note(2), (3)Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures *Note(3)Accumulated depreciation
Tools, furniture and fixtures, net
Land *Note(2)Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other *Note(3)Total intangible assets
Investments and other assets
Investment securities *Note(1), (2)Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
See notes to consolidated financial statements

41 Tokuyama Corporation Annual Report 2019

Thousands of
U.S. dollars(Note 2)
2019

68,61380,35830
16,4589,554
17,462
10,554(94)
202,936

57,22979,66028
10,00014,028
10,075
15,3274,809(127)
191,031

618,136
723,946271
148,275
86,075
157,31795,085(853)
1,828,256

106,214(76,233)
29,981
459,535(414,813)
44,721
22,106(19,905)
2,201
32,296
4,548(2,237)2,311
4,592
116,104

102,761(73,455)
29,305446,278(404,441)
41,836
21,887(19,748)2,138
30,9953,760(1,753)
2,007
3,959
110,242956,888(686,785)
270,102
4,139,960(3,737,061)
402,898
199,154(179,324)
19,829290,963
40,980(20,159)
20,82041,374
1,045,989

208
71
1,693
1,973

1,158
51
1,556
2,766

1,876
647
15,25917,783

21,7182,444
21,091
9,796
3,621
(57)
58,614
176,693379,630

24,302
2,627
18,300
9,657
3,162
(141)
57,908
170,917361,949

195,659
22,019190,01488,25832,624(513)
528,061
1,591,834
3,420,091

Consolidated Balance Sheets
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31, 2019 and 2018

Millions of yen
2019
2018
Liabilities :Current liabilities :Notes and accounts payable - trade *Note(2)Short-term loans payable *Note(2)Current portion of long-term loans payable *Note(2)Lease obligations
Income taxes payable
Provision for bonuses
Provision for repairs
Provision for product warranties
Provision for loss on compensation for damage
Provision for restructuring
Other *Note(2)Total current liabilities
Noncurrent liabilities :Long-term loans payable *Note(2)Lease obligations
Deferred tax liabilities
Provision for directors' retirement benefits
Provision for share benefits
Provision for repairs
Allowance for loss on compensation for building materials
Provision for environmental measures
Net defined benefit liability
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
Net assets :Shareholders' equity :Capital stock
Authorized：
Issued：Capital surplus
Retained earnings
Treasury stock
2018 ：
2019 ：
Total shareholders' equity

200,000,000
69,934,375

378,378
482,765

sharessharessharesshares

Accumulated other comprehensive income :Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

Thousands of
U.S. dollars(Note 2)
2019

47,268
4,361
12,667
758
3,816
2,664
3,569
137
91
233
17,68093,24847,6102,549
15,684
641
3,688
2,557
4,332
98
15,87093,032425,841
39,296
114,120
6,831
34,38024,00732,159
1,235
820
2,099
159,282
840,076

109,411
1,767
220
224
48
1,546
260
222
2,149
6
6,999
122,856
216,104

119,521
1,521
298
143
1,594
261
253
1,527
5
7,197
132,325
225,357

985,687
15,925
1,982
2,024
434
13,9322,349
2,004
19,361
54
63,056
1,106,814
1,946,891

10,00020,01810,00020,00890,090180,343

121,901

90,752

1,098,213(1,823)150,095(1,472)
119,288(16,432)
1,352,214(1,566)
(61)
1,672
2,640
2,685
10,743
163,525
379,630

1,352
(151)
2,093
3,074
6,368
10,935
136,591
361,949(14,113)(551)
15,071
23,791
24,197
96,7881,473,200
3,420,091

See notes to consolidated financial statements

Tokuyama Corporation Annual Report 2019 42

Consolidated Statements of Income
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31, 2019 and 2018

Net sales
Cost of sales *Note(1),(4)Gross profit
Selling, general and administrative expenses
Selling expenses *Note(2)General and administrative expenses *Note(3),(4)Total selling, general and administrative expenses
Operating income
Non-operating income :Interest income
Dividend income
Share of profit of entities accounted for using equity method
Fiduciary obligation fee
Trial products income
Rent income on non-current assets
Other
Total non-operating income
Non-operating expenses :Interest expenses
Cost of loans payable
Loss on bond retirement
Fiduciary obligation expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income :Gain on sales of noncurrent assets *Note(5)Gain on bargain purchase
Gain on sales of investment securities
Compensation for damage income
Compensation income for damage
Subsidy income
Gain on insurance claim
Other
Total extraordinary income
Extraordinary loss :Loss on sales of non-current assets *Note(6)Impairment loss *Note(7)Loss on disaster
Loss on reduction of noncurrent assets
Loss on disposal of noncurrent assets
Loss on sales of investment securities
Compensation for damage
Loss on transfer of business
Loss on contract cancellation
Other
Total extraordinary losses
Profit before income taxes
Income taxes
Current
Deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Millions of yen
2019
2018
324,661
308,061
226,664
207,715
97,996
100,346
41,524
21,20862,73335,26239,26819,80959,07741,268374,099
191,066
565,165
317,682

123
390
921
716
666
649
1,333
4,802

210
272
957
878
540
450
1,335
4,645

1,113
3,522
8,304
6,452
6,005
5,851
12,01243,262

2,453
884
685
2,640
6,664
33,400

3,714
1,604
856
3,541
9,717
36,196

22,102
7,971
6,177
23,78860,038300,905

47
964
1
6,006
133
169
27
7,351

528
6
7,705
144
145
8,529

431
8,692
11
54,113
1,201
1,523
249
66,225

10
363
30
100
807
851
569
2,733
38,017

5
1,098
4
110
715
6
8,059
1,431
398
11,83032,895

98
3,277
276
902
7,273
7,670
5,128
24,628342,503

5,074(2,085)
2,988
35,029750
34,279

4,777
2,736
7,514
25,381
5,682
19,69845,712(18,791)
26,920315,582
6,761
308,820Yen
2019
Per share amounts :Net income
Cash dividends

See notes to consolidated financial statements

43 Tokuyama Corporation Annual Report 2019

Thousands of
U.S. dollars(Note 2)2019
2,924,874
2,042,026
882,847493.2650.00

2018
259.81
30.00

U.S. dollars(Note 2)
2019
4.444
0.45

Consolidated Statements of Comprehensive Income
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31, 2019 and 2018

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 *Note(1)Total comprehensive income
Attributable to:
Owners of parent
Non-controling interests
See notes to consolidated financial statements

Millions of yen
2019
2018
35,02925,381Thousands of
U.S. dollars(Note 2)
2019
315,582(2,919)
90
(304)
(434)

1,039
178
425
241

(26,301)816(2,743)(3,913)(139)(3,707)31,321170
2,055
27,436(1,260)(33,402)282,179

30,596725

21,6605,775

275,6446,535

Tokuyama Corporation Annual Report 2019 44

Consolidated Statements of Changes in Net Assets
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31, 2019 and 2018[2019]

Millions of yen
Shareholders' equity

Capitalstock

Balance at beginning of year

10,000Changes during the fiscal year
Profit attributable to owners of parent
Dividends of surplus
Purchase of treasury stock
Retirement of treasury shares
Disposal of treasury stock
Purchase of shares of consolidated
subsidiaries
Net changes of items other thanshareholders' equity
Total changes of items during
the period
Balance at end of year

Capitalsurplus

Accumulated other comprehensive income

Retainedearnings

Treasurystock

90,752(1,472)20,00834,279(3,129)
(351)
0

9
0
(0)

Valuation
Remeasuredifference Deferred
Foreignments ofon
gains orcurrency
definedavailable-f
lossestranslation
benefitor-saleon hedges adjustment
plans
securities

Total

119,288

10,935

136,591

(0)
90

(420)

(434)

(3,682)(191)(3,874)-9

31,149(351)

30,807(2,918)

90

(420)

(434)

(3,682)(191)

26,93320,018

121,901(1,823)150,095(1,566)

(61)

1,672

2,640

2,685

10,743

163,525

Non-cont
rolinginterests

Total
net assets

8,960

135,976

Millions of yen

Capitalsurplus10,000

Accumulated other comprehensive income

Valuation
Remeasuredifference Deferred
Foreignments ofon
gains orcurrency
definedavailable-f
lossestranslation
benefitor-saleon hedges adjustment
plans
securities

Retainedearnings

Treasurystock

72,511(1,446)

122,609(21,651)
21,626
0

19,698(1,457)(21,651)
0

19,698(1,457)(21,651)
0

89

89

41,545

19,698(1,457)(21,626)
(0)

Total

89

319

(274)

1,528

2,833

Total

4,406

1,032

122

564

241

1,962

1,974

3,936

-

(21,536)

18,241(25)(3,321)

1,032

122

564

241

1,962

1,974

615

10,00020,00890,752(1,472)

119,288

1,352

(151)

2,093

3,074

6,368

10,935

136,591

Non-cont
rolinginterests

Total
net assets

98,5131,230,556[2019]

Thousands of U.S. dollars
Shareholders' equity

Capitalstock

Balance at end of year

6,368

10,000Changes during the fiscal year
Profit attributable to owners of parent
Dividends of surplus
Purchase of treasury stock
Retirement of treasury shares
Disposal of treasury stock
Purchase of shares of consolidated
subsidiaries
Net changes of items other thanshareholders' equity
Total changes of items during
the period

Changes during the fiscal year
Profit attributable to owners of parent
Dividends of surplus
Purchase of treasury stock
Retirement of treasury shares
Disposal of treasury stock
Purchase of shares of consolidated
subsidiaries
Net changes of items other thanshareholders' equity
Total changes of items during
the period

3,074

34,279(3,129)(351)
90(2,918)

Capitalstock

Balance at beginning of year

2,093

Total
net assets(0)Shareholders' equity

Balance at end of year(151)

Non-contr
olinginterests

34,279(3,129)(351)
90[2018]

Balance at beginning of year

1,352

Total

90,090

Accumulated other comprehensive income

Treasurystock

Valuation
Remeasuredifference Deferred
Foreignments ofon
gains orcurrency
definedavailable-f
lossestranslation
benefitor-saleon hedges adjustment
plans
securities

CapitalsurplusRetainedearnings

180,255

817,587(13,263) 1,074,669

308,820(28,197)

308,820(28,197)(3,168)88
3308,820(28,197)(3,168)
88
3

(0)

(0)

(3,168)
0

87
3
(0)

Total

12,182(26,295)
90,09087

280,625

180,343 1,098,213

See notes to consolidated financial statements

45 Tokuyama Corporation Annual Report 2019

(3,168)(1,368)18,857

27,702

Total

57,373816(3,786)(3,910)(33,176)(1,725)(34,901)

277,545(26,295)

816(3,786)(3,910)(33,176)(1,725)

242,643(16,432) 1,352,214(14,113)(551)

15,071

23,791

24,197

96,7881,473,200

Consolidated Statements of Cash Flows
Tokuyama Corporation and Consolidated Subsidiaries

Years ended March 31, 2019 and 2018

Millions of yen
2019
2018
Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Increase (decrease) in provision
Increase(decrease) in net defined benefit liability
Increase(decrease) in net defined benefit asset
Interest and dividends income
Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment
Loss (gain) on sales of investment securities
Share of profit of entities accounted for using equity method
Gain on bargain purchase
Subsidy income
Interest expenses
Cost of loans payable
Loss on reduction of noncurrent assets
Impairment loss
Loss (gain) on disposal of noncurrent assets
Gain on insurance claim
Loss on transfer of business
Compensation for damage income
Compensation income for damage
Compensation for damage
Loss on contract cancellation
Loss on redemption of bonds
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Proceeds from insurance income
Proceeds from conpensation income
Payments for contract cancellation
Income taxes paid
Net cash provided by (used in) operating activities

Thousands of
U.S. dollars(Note 2)
2019

38,017
15,093
(693)
58
(761)
(514)
8
(36)
(1)
(921)
(964)
(133)
2,453
884
100
363
807
(169)
(6,006)851
928(4,071)335(1,090)(403)
943
45,077938(2,529)169(5,123)38,53132,895
13,985
1,433
95
(485)
(483)
(56)
(522)
(0)
(957)
(144)
3,714
110
1,098
715
(145)
8,059
(7,705)1,431
1,604(5,857)(6,463)(414)
11,344
1,673
972
55,899805(3,775)
145
7,705
(959)
2,064
61,885342,503
135,976(6,248)525(6,863)(4,635)
78
(332)
(11)
(8,304)(8,692)(1,201)
22,102
7,971
902
3,277
7,273
(1,523)(54,113)
7,670
8,364
(36,680)
3,025(9,825)(3,633)
8,498
406,1028,454(22,789)
1,523(46,160)
347,132

Payments of long-term loans receivableCollection of long-term loans receivable
Proceeds from subsidy income
Other, net
Net cash provided by (used in) investing activities

(269)
498
(16,765)
219
(22)
3
583
(3)
214
133
(765)
(16,174)(288)
161(15,526)
1,618(3,359)
76
5,362
(7)
234
144
(1,081)(12,665)(2,427)
4,488(151,044)
1,976
(205)
30
5,255
(34)
1,936
1,201
(6,893)(145,716)

Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds of long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Proceeds from issuance of common shares
Cash dividends paid
Cash dividends paid to non-controlling interests
Decrease (increase) in treasury stock
Other, net
Net cash provided by (used in) financing activities

247
59,713(76,512)(3,122)
(357)
(308)
(764)
(21,104)2
10,120(50,384)(36,014)78(1,454)(406)(21,650)(1,500)(101,209)

2,226
537,956(689,297)(28,129)(3,219)(2,776)(6,890)(190,130)

(49)
1,202
66,807(23)(52,012)
118,819(450)
10,835
601,865(18)
67,99166,807(163)
612,537

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
Proceeds from purchase of shares of subsidiaries resulting in change in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting from exclusion of subsidiaries fromconsolidation
Cash and cash equivalents at end of period *Note(1)See notes to consolidated financial statements

Tokuyama Corporation Annual Report 2019 46

Notes to Consolidated Financial Statements
Tokuyama Corporation and Consolidated Subsidiaries

1. BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared from accounts and records maintained by
Tokuyama Corporation (the “Company”) and its subsidiaries. The Company and its consolidated domestic subsidiaries
have maintained their accounts and records in accordance with the provisions set forth in the Companies Act (the“Act”) and the Financial Instruments and Exchange Act and in conformity with accounting principles and practices
generally accepted in Japan, which are different from the accounting and disclosure requirements of International
Financial Reporting Standards.
The accounts of consolidated overseas subsidiaries are based on their accounting records maintained in conformity withgenerally accepted accounting principles and practices prevailing in the respective countries of domicile.
The consolidated financial statements are not intended to present the consolidated financial position, results ofoperations and cash flows in accordance with accounting principles and practices generally accepted in countries andjurisdictions other than Japan.

2. U.S. DOLLAR AMOUNTSThe U.S. dollar amounts included in the consolidated financial statements and notes represent the arithmetic results oftranslating Japanese yen to U.S. dollars at the rate of ¥111=US$1, the approximate exchange rate on March 31, 2019.
The U.S. dollar amounts are included solely for the convenience of readers outside Japan, and are not intended to imply
that the assets and liabilities that originated in yen have been or could be readily converted, realized, or settled in U.S.
dollars at this or at any other rate.

3. SCOPE OF CONSOLIDATIONThe consolidated financial statements include the accounts of the Company and its 52 significant subsidiaries (49 in2018). Significant intercompany transactions and accounts have been eliminated in consolidation.
Major consolidated subsidiaries are as follows;
Sun•Tox Co., Ltd.
Shin Dai-ichi Vinyl Corporation
A&T Corporation
Excel Shanon Corporation
Tokuyama Dental Corporation
Tokuyama Mtech Corporation
Hiroshima Tokuyama Ready Mixed Concrete Co., Ltd.
Sun Arrow Chemical Co.,Ltd.
Tokuyama Chemicals (Zhejiang) Co., Ltd.
Taiwan Tokuyama Corporation
Tokuyama Kairiku Corporation, Kyouei Sekiyu Corporation, Shuunan Kairiku Corporation, and Yamaguchi Kisen
Corporation (for all of which the Company has acquired shares) have been included into the scope of consolidation fromthe consolidated fiscal year under review.
Kyosei Kaiun Ltd., Co., which had been a consolidated subsidiary until the previous consolidated fiscal year, has been
removed from the scope of consolidation from the consolidated fiscal year under review due to being liquidated.
Of consolidated subsidiaries, A&T Corporation closes its accounts on December 31. Its financial statements as ofDecember 31 are used in the preparation of consolidated financial statements, and adjustments necessary forconsolidation purposes are made to material transactions arising between that date and the consolidated fiscal year-end.
Of consolidated subsidiaries, Tokuyama Chemicals (Zhejiang) Co., Ltd. and other four companies whose original fiscal
year-end is December 31, are consolidated by performing provisional settlement of accounts on March 31, theconsolidated fiscal year-end, in compliance with the regular settlement of accounts.
Investments in 9 affiliates (10 in 2018) are accounted for by the equity method.
Major equity method affiliate is Hantok Chemicals Co., Ltd.
Of equity method affiliates, with regard to the company of which the last date of its fiscal year is different from theconsolidated fiscal year-end, the financial statements of its fiscal year are used in the preparation of consolidated financial

47 Tokuyama Corporation Annual Report 2019

statements.
Oita Bayside Ready Mixed Concrete Co., Ltd., which had been an equity-method affiliate until the previous consolidated
fiscal year, has been removed from the scope of consolidation from the consolidated fiscal year under review due to being
liquidated.
Major affiliate that are not accounted for by the equity is Oita Mining Co., Ltd.
The equity method does not apply to them because they have little impact on the consolidated financial statements when
they are excluded from the scope of application of the equity method, nor have any material impact on an aggregate basis.

4. SIGNIFICANT ACCOUNTING POLICIES(1) Valuation basis and valuation methods for significant assets(i) Securities
Available-for-sale securities
Securities with fair value
Stated at the fair value based on the quoted market price as of the fiscal year-end (Valuation differences arerecognized in net assets; The cost of securities sold is calculated by the moving-average method).
Securities without fair value
Stated 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
write-down 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 notes and accounts receivable – trade, loans receivable and others, theallowance for doubtful accounts is provided 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 of default.
(ii) Provision for bonuses
To prepare for the payment of next bonuses to employees, provision for bonuses is recorded based on the portion of theestimated amount of bonus payments attributable to the fiscal year under review.
(iii) Provision for repairs
Repair expenses are calculated individually and recorded to prepare for periodic repairs of manufacturing facilities.
(iv) Provision for product warranties
For required expenses incurred during the warranty period with free servicing (warranty expenses for free servicing) for
clinical test information systems and laboratory test automation systems, the estimated amount of expenses is recorded
based on the historical rate of incurrence (proportion of expenses paid to net sales).

Tokuyama Corporation Annual Report 2019 48

(v) 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.
(vi) Provision for restructuring
The Company records estimated amounts in order to prepare for business restructuring-related expenditures.
(vii) Provision for directors’ retirement benefits
At certain consolidated subsidiaries, the amount to be required at the end of the fiscal year under review in accordancewith internal rules is recorded to prepare for payment of directors’ retirement benefits.
(ⅷ) Provision for share benefits
The Company records estimated amounts for share benefit obligations at the end of the consolidated fiscal year underreview in order to prepare for the Company share benefits provided to directors and other executives based on the
Company’s share issuance rules.
(ⅸ) Allowance for loss on compensation for building materials
The estimated amount of losses incurred in replacement, renovation, etc. is recorded to prepare for repairs andmaintenance of plastic sashes for houses and buildings (fire protection and resistance grade).
(ⅹ) Provision for environmental measures
Pursuant to the “Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes,” the estimatedamount at the end of the fiscal year under review is recorded to prepare for payments for disposal of PCB waste.
(4) Accounting method of retirement benefits(i) Methods of attributing estimated retirement benefits to accounting periods
When calculating retirement benefit obligations, the benefit formula basis is used to attribute estimated retirement
benefits to the period through the end of the 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 fiscal year when they are incurred.
(iii) Application of simplified accounting method used by small companies
In calculating net defined 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 the
fiscal year-end is deemed as retirement benefit obligations.
(5)Application of the consolidated corporate-tax system
The Company adopts consolidated corporate-tax system from current consolidated fiscal year.
(6) Accounting method for deferred assets
All deferred assets are charged to expenses when incurred.
(7) Translation of significant assets or liabilities denominated in foreign currencies into Japanese yen
Monetary assets and liabilities denominated in foreign currencies are translated into yen at the exchange rate in effect atthe 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 thebalance 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-controlling interests” 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 denominated in foreign
currencies and loans payable(iii) Hedging policy

49 Tokuyama Corporation Annual Report 2019

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
and cumulative changes in cash flows or market fluctuations of hedging instruments on a quarterly basis and based onchanges in the both, 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 withbanks, and short-term investments that have maturities within three months from acquisition, are readily convertible tocash, and are subject to an insignificant risk of changes in value.
(11) Other significant matters forming the basis of preparing the consolidated financial statements
Accounting for consumption taxes
Consumption tax and local consumption tax are accounted for using the tax-excluded method. Non-deductible
consumption tax and local consumption tax are accounted for as expenses for the fiscal year under review.

5. CHANGES IN ACCOUNTING POLICY
Not applicable.

6. NEW ACCOUNTING STANDARDS NOT YET APPLIED• “Accounting Standard for Revenue Recognition ,” (ASBJ Corporate Accounting Standard No. 29, March 30, 2018)• “Implementation Guidance on Accounting Standard for Revenue Recognition,” (ASBJ Corporate AccountingStandard Implementation Guidance No. 30, March 30, 2018)
1. Summary
Having jointly developed comprehensive accounting standards pertaining to revenue recognition, the International
Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) officially announced
Revenue from Contracts with Customers (issued as International Financial Reporting Standards (IFRS) 15 by the IASB,
as Topic 606 by the FASB) in May 2014. On the basis of IFRS 15 being applied from the fiscal year beginning on orafter January 1, 2018, and Topic 606 being applied from the fiscal year beginning after December 15, 2017, a
comprehensive accounting standard on revenue recognition was developed by the ASBJ Committee and officiallyannounced in conjunction with the implementation guidance.
As a basic policy in developing the ASBJ’s accounting standards pertaining to revenue recognition from the viewpointof the comparability between financial statements, which is one of the benefits of conformity with IFRS 15, accounting
standards were formulated for which it was decided to incorporate the basic principles of IFRS 15 as the starting point.
In addition, in the event of there being items that should be taken into consideration, such as any practical work that has
previously been conducted in Japan, alternative treatments will be added to the extent needed for comparability not becompromised.
2. Planned date for implementation
The Company will implement this accounting standard from the beginning of the fiscal year ending March 2022.
3. Impact of implementing said accounting standards
The impact of implementing the “Accounting Standard for Revenue Recognition ” to the consolidated financial
statements is being evaluated at this time.

7. CHANGES IN PRESENTATION(Changes in Accordance with Application of Partial Amendments to Accounting Standard for Tax EffectAccounting)
Effective from the beginning of the fiscal year under review, the Company has applied the Partial Amendments toTokuyama Corporation Annual Report 2019 50

Accounting Standard for Tax Effect Accounting (hereinafter “Partial Amendments to Tax Effect AccountingStandard,” Accounting Standards Board of Japan (ASBJ) Statement No. 28, issued on February 16, 2018). In
addition to having reclassified deferred tax assets in the investment and other assets section of the Company’sbalance sheet, and having changed to the method by which deferred tax liabilities are included in the non-current
liabilities section, changes have been made to the notes relating to tax effect accounting.
As a result, in the consolidated balance sheet for the previous consolidated fiscal year, the deferred tax assets of¥6,620 million under current assets are included in the deferred tax assets of ¥18,300 million under investments andother assets, and the deferred tax liabilities of ¥0 million under current liabilities included in the deferred tax
liabilities of ¥298 million under non-current liabilities.
Also, in the note on tax effect accounting, the added content is that stated in Note 8 (excluding the total of thevaluation allowance) and Note 9 of the Accounting Standard for Tax Effect Accounting explanatory notes, as
defined in Paragraphs 3 to 5 of the Partial Amendments to Tax Effect Accounting Standard. However, the content
pertaining to the previous consolidated fiscal year among the said content is not described in accordance with thetransitional treatment prescribed in the Partial Amendments to Tax Effect Accounting Standard, Paragraph 7.
(Consolidated Statements of Income)In the fiscal year under review, “Rent income on non-current assets” in “Non-operating income” is separately
presented due to its increased significance. Items in the consolidated financial statements for the previous fiscal year
have been reclassified to reflect this change in the presentation.
Consequently, ¥450 million that was presented in “Other” under “Non-operating income” in the previous fiscal year
has been reclassified to “Rent income on non-current assets.”
In the fiscal year under review, “Fiduciary obligation expenses” in “Non-operating expenses” is separately
presented due to its increased significance. Items in the consolidated financial statements for the previous fiscal year
have been reclassified to reflect this change in the presentation.
Consequently, ¥ 856 million that was presented in “Other” under “Non-operating expenses” in the previous fiscal
year has been reclassified to “Fiduciary obligation expenses.”

8. CHANGES IN ACCOUNTING ESTIMATES
Not applicable.

9. 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 inJapan).
1.Transaction summary
For this program, the Company adopted a Director Remuneration BIP (Board Incentive Plan) Trust (hereinafterreferred to as “the BIP Trust”). As with performance-linked stock (performance share) remuneration andtransfer-limited stock (restricted stock) remuneration in the United States and Europe, the BIP Trust is a programthat grants the Company’s shares and benefits as well as the equivalent amount of convertible bonds of theCompany’s shares in accordance with business performance and the director’s position.
2.Company’s own stock that remains in trust
The Company’s stock that remains in trust is recorded as treasury stock 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 sharesof treasury stock are ¥340 million (US$3 million) and 100,800 shares.

51 Tokuyama Corporation Annual Report 2019

10. CONSOLIDATED BALANCE SHEETS(1) Items corresponding to unconsolidated subsidiaries and affiliates are as follows:

Investment securities

Millions of yen
2019
2018
8,086
7,803

Thousands of
U.S. Dollars

2019
72,852(2) Assets pledged as collateral and liabilities for which collateral is pledged
Assets pledged as collateral are as follows:
Thousands of
U.S. Dollars

Millions of yen
2019
2018
Pledged Assets
Cash and deposits
Buildings and structures
Machinery, equipment and vehicles
Land
Investment securities
Total

69
1,094
562
25
1,750

2019
1
73
562
26
663

622
9,858
5,066
225
15,773Liabilities for which collateral is pledged are as follows:
Thousands of
U.S. Dollars

Millions of yen
2019
2018
Pledged Debts
Notes and accounts payable - trade
Short-term loans payable
Curent portion of long-term loans payable
Long-term loans payable
Other
Total

135
34
1,185
19
1,375

2019
1
351
33
117
19
522

1,220
313
10,676
176
12,388(3) Reduction entry
In the fiscal year under review, reduction entries of ¥13million (US$0 million) for buildings and structures, ¥86 million(US$0 million) for machinery, equipment and vehicles were made due to receipt of subsidies, etc.
In addition, as a result of the retirement of machinery, equipment and vehicles that were subject to the reduction entry,
cumulative reduction entries decreased by ¥111 million (US$ 1million), and as a result of the retirement of tools,
furniture and fixtures that were subject to the reduction entry, cumulative reduction entries decreased by ¥19 million(US$0 million).
The cumulative reduction entries due to the receipt of subsidies, etc. in association with fixed assets are as follows:
Thousands ofMillions of yen
U.S. Dollars

2019
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Intangible assets Other
Total

1,455
2,759
164
4
4,382

2018
1,441
2,784
183
4
4,412

2019
13,111
24,8561,478
36
39,483Tokuyama Corporation Annual Report 2019 52

(4) Guarantee obligation
The Company provides guarantee of obligations concerning loans from financial institutions by the employee.
Thousands ofMillions of yen
U.S. Dollars

2019
Employee

2018
99

2019
90

897

(5) Contingent liabilities pertaining to unsecured bond debt assumption agreements
With regard to the following unsecured bonds, the Company will be delegating the performance of the obligation basedon an unsecured bond trust-type debt assumption agreement that has been executed with a bank. Accordingly, although
the liabilities pertaining to those unsecured bonds and the amount paid under that same contract offset each other, theobligation to redeem the Company’s unsecured bonds to bondholders continue until the time of their redemption.
Thousands ofMillions of yen
U.S. Dollars

2019
20th unsecured bonds without collateral
22nd unsecured bonds without collateral
24th unsecured bonds without collateral
Total

2018

10,00015,0009,400
34,4002019

10,00015,0009,400
34,40090,090135,135
84,684309,909(6) Repurchase obligation due to liquidation of notes receivableThousands of
U.S. Dollars

Millions of yen
2019
2018
Repurchase obligation due to liquidation of notes
receivable

1,867

2019
-

16,826(7) Notes receivable endorsed

Notes receivable endorsed

Millions of yen
2019
2018
822
480

Thousands of
U.S. Dollars

2019
7,414

(8) Trade notes that mature on last day of consolidated fiscal year
Settlement processing for trade notes that mature at the end of the fiscal year is carried out on their clearing days.
As the last day of the fiscal year under review fell on a weekend and financial institutions were closed, trade notes
maturing at the end of the current fiscal year are included in the fiscal year-end balance.
Thousands ofMillions of yen
U.S. Dollars

2019
Notes receivable - trade

53 Tokuyama Corporation Annual Report 2019

1,540

2018
1,055

2019
13,876

11. CONSOLIDATED STATEMENTS OF INCOME(1) Inventories at the fiscal year-end represent the amount after the book value was reduced in connection with a decline
in the profitability, and the following losses on valuation of inventories (the amount in parentheses represents gains onreversal) are included in cost of sales.
Thousands ofMillions of yen
U.S. Dollars

2019
Loss on valuation of inventories

2018
269

185

2019
2,424

(2) Major items and amounts of selling expenses are as follows:

Millions of yen
2019
2018
Selling expenses :Freight-out expenses
Shipping charges
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Provision for repairs
Provision of allowance for doubtful accounts

23,111
5,889
5,230
399
50
39
(49)

22,276
5,582
5,066
360
53
14
(6)

Thousands of
U.S. Dollars

2019
208,21553,05947,125
3,598
457
359
(441)

(3) Major items and amounts of general and administrative expenses are as follows:

Millions of yen
2019
2018
General and administrative expenses :Technical research expenses
Salaries and bonuses
Provision for bonuses
Provision for directors' retirement benefits
Retirement benefit expenses

7,077
4,282
333
50
48

6,798
3,663
326
56
33

Thousands of
U.S. Dollars

2019
63,762
38,580
3,005
451
437

(Note) Technical research expenses for the previous fiscal year include provision for bonuses of ¥272 million andretirement benefit expenses of ¥22 million.
Technical research expenses for the fiscal year under review include provision for bonuses of ¥268 million (US$2
million) and retirement benefit expenses of ¥23 million (US$0 million).
(4) Total amount of research and development expenses included in general and administrative expenses and production
cost
Thousands ofMillions of yen
U.S. Dollars

Research and development expenses

2019
8,052

2018
7,903

2019
72,543Tokuyama Corporation Annual Report 2019 54

(5) The breakdown of gain on sales of non-current assets is as follows:

Millions of yen
2019
2018
6
22
13
3
5
13
68
440
2
47
528

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Construction in progress
Other
Total

Thousands of
U.S. Dollars

2019
61
200
33
118
18
431

(6) The breakdown of loss on sales of non-current assets is as follows:

Millions of yen
2019
2018
0
8
1
0
10

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Total

Thousands of
U.S. Dollars

2019
3
1
0
5

5
80
9
2
98

(7) Impairment loss
Fiscal year ended March 31, 2019
The Group groups its assets mainly according to the smallest units independently generating cash flows based on
business categories. During the fiscal year ended March 31, 2019, the Group recorded impairment losses.
Of note, description of content has been omitted due to the low level of importance.
Fiscal year ended March 31, 2018
The Group groups its assets mainly according to the smallest units independently generating cash flows based on
business categories. During the fiscal year ended March 31, 2018, the Group recorded impairment losses for thefollowing asset groups.
Details of the Company’s impairment loss have been omitted due to the low level of importance except for those items,
which are presented briefly as follows.

Millions of yen
Use

Location

Manufacturing
facilities for

Shnghai,China

microporous film

Asset category

2018

Buildings and structures

152

Machinery, equipment and vehicles

480

Tools, furniture and fixtures

4

Intangible assets-other

37

Total

674

Shanghai Tokuyama Plastics Co., Ltd. decided to write down the book value of the above asset to its recoverable
amount and to post the amount of write-down as an impairment loss in extraordinary losses due to deterioration inmarket conditions for microporous film.
The recoverable amount has been determined using value in use and a discount rate of 11.72% for calculating the value
in use based on future cash flows.

55 Tokuyama Corporation Annual Report 2019

12. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(1) Reclassification adjustments and tax effects relating to other comprehensive income
Thousands of
U.S. Dollars

Millions of yen
2019
2018

2019

Valuation difference on available-for-sale securities :Gains arising during the year
Reclassification adjustment to profit or loss
Amount before income tax effect
Income tax effectTotal valuation difference on available-for-sale securities(3,487)(1)(3,488)569(2,919)

1,499
1,499
(460)
1,039

(31,417)(11)(31,428)
5,127(26,301)

130
130
(39)
90

168
168
9
178

1,173
1,173
(357)
816

(304)
(304)

425
425

(2,743)(2,743)

(201)
(422)
(624)
190
(434)

417
(183)
233
7
241

(1,817)(3,809)(5,627)
1,714(3,913)

(139)

170

(1,260)(139)(3,707)170
2,055(1,260)(33,402)

Deferred gains or losses on hedges :Gains arising during the year
Amount before income tax effect
Income tax effectTotal deferred gains or losses on hedges
Foreign currency translation adjustment :Gains arising during the year
Total Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax :Gains arising during the year
Reclassification adjustment to profit or loss
Amount before income tax effect
Income tax effectTotal remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity :Gains arising during the year
Total Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

13. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Fiscal year ended March 31, 2019(1) Class and total number of shares issued and class and number of treasury stock[2019]

Thousand shares
Beginning ofyear

Issuanced shares
Common shares
Total
Treasury shares
Common shares (Note 1,2,3)
Total

Increaseduring the
fiscal year

Decreaseduring the
fiscal year

End of year

69,934
69,934--

69,934
69,934

378
378

104
104

0
0

482
482

(Note 1) The increase in the number of treasury stock of common stock is due to an increase of 3 thousand shares due topurchase of less than a share-trading unit and due to an increase of 100 thousand shares due to the adoption of a
Director Remuneration BIP (Board Incentive Plan) Trust.
(Note 2) The decrease of 0 thousand shares in the number of treasury stock of common stock is a decrease due to therequest for additional purchase of shares constituting less than one share unit.
(Note 3) Included in the aforementioned treasury stock of common stock is 100 thousand shares held by The Master
Trust Bank of Japan, Ltd. (executive compensation BIP (Board Incentive Plan) trust account; 76292 account).

Tokuyama Corporation Annual Report 2019 56

(2) Dividends(i) Dividend amount paid

Resolution

Class ofsharesDividend(Millions ofyen)

Dividend
per shares(yen)

Referencedate

Effective
date

Source ofdividends

Ordinary
GeneralMeeting of
Shareholders(June 22,2018)

Commonshares

1,391

20.00

March 31,2018

June 25,
2018

Retained

Board ofDirectors(October 31,
2018)

Commonshares

1,738

25.00

September
30, 2018

December 3,
2018

Retained

Resolution

Class ofsharesReferencedate

Effective
date

Source ofMarch 31,2018

June 25,
2018

Dividend(Thousands of
U.S. Dollars)

Dividend pershares(U.S. Dollars)

Ordinary
GeneralMeeting of
Shareholders(June 22,2018)

Commonshares12,532

0.18

Board ofDirectors(October 31,
2018)

Commonshares

15,6650.22

September 30, December 3,
2018
2018

earnings

earnings

dividends

Retainedearnings

Retainedearnings(Note) Included in the total amount of dividends decided by the Board of Directors on October 31, 2018 is ¥2
million worth of dividends related to 100 thousand Company shares (treasury stock) held in the executive
compensation BIP trust account.

57 Tokuyama Corporation Annual Report 2019

(ii) Dividends whose record date is within the fiscal year and whose effective date is in the following fiscal year

Resolution

Class ofsharesOrdinary
GeneralMeeting of
Shareholders(June 21,2019)

CommonsharesResolution

Class ofsharesDividend(Millions ofyen)

Dividend
per shares
(yen)

1,738

Dividend(Thousands of
U.S. Dollars)

25.00

Dividend pershares(U.S. Dollars)

Source ofReferencedate

Effective
date

March 31,2019

June 24,2019

Retained

Referencedate

Effective
date

Source ofdividends

earnings

dividends

Ordinary
GeneralRetained
CommonMarch 31,
Meeting of
15,6640.22
June 24, 2019
shares
2019
Shareholders
earnings(June 21,2019)
(Note) Included in the total amount of dividends decided by the Ordinary General Meeting of Shareholders on
June 21, 2019 is ¥2 million worth of dividends related to 100 thousand Company shares (treasury stock) held in
the executive compensation BIP trust account.
Fiscal year ended March 31, 2018
(1) Class and total number of shares issued and class and number of treasury stock[2018]

Thousand shares
Beginning ofyear

Issuanced shares
Common shares (Note 1,2)
Class A shares (Note 3)
Total
Treasury shares
Common shares (Note 1,4,5)
Total

Increaseduring the
fiscal year

Decreaseduring the
fiscal year

End of year

349,67120
349,691-

279,73720
279,757

69,934
69,934

1,850
1,850

15
15

1,488
1,488

378
378

(Note 1) The Company consolidated its common shares at a ratio of one share for each five shares effective as of
October 1, 2017.
(Note 2) The 279,737 thousand decrease in the total number of common shares outstanding is due to consolidation ofshares.
(Note 3) The 20 thousand decrease in issued and outstanding Class A shares is due to cancellation.
(Note 4) The 15 thousand increase in the number of treasury stock of common stock is due to an increase of 1 thousand
shares due to purchase of fractional shares in accordance with the consolidation of shares and an increase of 13
thousand shares purchased in less than a share-trading unit (9 thousand shares before, 4 thousand shares after
consolidation of shares).
(Note 5) The 1,488 thousand decrease in the number of treasury stock of common stock is due to a decrease of 1,488
thousand shares following the consolidation of shares and a decrease of 0 thousand shares (0 thousand shares after the
consolidation of shares) due to requests for the sale of shares constituting less than one unit.

Tokuyama Corporation Annual Report 2019 58

(2) Dividends(i) Dividend amount paid

Resolution

Class ofsharesDividend(Millions ofyen)

Dividend
per shares(yen)

Referencedate

Effective
date

Source ofdividends

Ordinary
GeneralMeeting of
Shareholders(June 23,2017)Class A
shares761

38,082.20

March 31,2017

June 26,2017

Retained

Board ofDirectors(October 27,
2017)

Commonshares695

2.00

September
30, 2017

November30, 2017

Retainedearnings

earnings(Note) The Company consolidated its common shares at a ratio of one share for each five shares effective as of October
1, 2017. The amount of dividend for the end of the fiscal year ending March 31, 2018 is presented as the amount ofdividend prior to share consolidation.
(ii) Dividends whose record date is within the fiscal year and whose effective date is in the following fiscal year

Resolution
Ordinary
GeneralMeeting of
Shareholders(June 22,2018)Class ofsharesDividend(Millions ofyen)

Commonshares

1,391

Dividend
per shares
(yen)

20.00

Referencedate

Effective
date

March 31,2018

June 25,2018

Source ofdividends

Retainedearnings(Note) The Company consolidated its common shares at a ratio of one share for each five shares effective as of October
1, 2017. The amount of dividend for the end of the fiscal year ending March 31, 2018 is presented as the amount ofdividend after share consolidation and includes a 100th anniversary commemorative dividend of 10.00 per share.

59 Tokuyama Corporation Annual Report 2019

14. CONSOLIDATED STATEMENTS OF CASH FLOWS(1) Reconciliation between the balance of cash and cash equivalents at end of period and relevant amount on the
consolidated balance sheets

Millions of yen
2019
2018
68,61357,22910,000Cash and deposits
Securities (negotiable certificate of deposit)
Time deposit whose deposit period
exceeds 3 months
Cash and cash equivalents

Thousands of
U.S. Dollars
2019618,136
-

(621)

(422)

(5,598)67,99166,807

612,537

15. LEASE TRANSACTIONS(Lessee)(1) Operating Lease transactions
Future lease payments related to noncancelable operating lease transactions

Due within one year
Due beyond one year
Total

Millions of yen
2019
2018
529
472
972
1,450
1,502
1,922

Thousands of
U.S. Dollars

2019
4,771
8,764
13,535(Lessor)(1) Operating Lease transactions
Future lease income related to noncancelable operating lease transactions

Due within one year
Due beyond one year
Total

Millions of yen
2019
2018
129
129
1,008
1,121
1,137
1,251

Thousands of
U.S. Dollars

2019
1,168
9,081
10,25016. FINANCIAL INSTRUMENTS(1) Matters Regarding Financial Instruments(i) 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 capital with 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.
(ii) 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, theCompany takes measures to reduce that risk by managing its foreign currency exposure by letting them be equal toforeign currency-denominated 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., andavailable-for-sale securities 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, theCompany takes measures to reduce that risk by managing its foreign currency exposure by letting them be equal toforeign currency-denominated receivables and implementing forward exchange contracts on an as needed

Tokuyama Corporation Annual Report 2019 60

basis.
Loans payable and bonds payable are principally for raising funds necessary for capital investments, and the repayment
date comes up to 59 years after the balance sheet date. Floating rate borrowings are exposed to interest rate risk, someof which are hedged using derivative transactions (interest rate swaps).
There are three types of derivative transaction: forward exchange contracts for the purpose of curbing the foreignexchange fluctuation risks associated with foreign currency-denominated receivables and payables and forecast
transactions; interest rate swap transactions for the purpose of fixing the interest rate on borrowings or reducing theinterest expenses; and currency swap transactions aimed at reducing exchange rate risk in transactions between the
Company and its overseas subsidiaries. With regard to hedging instruments and hedged items related to hedge
accounting, hedge policies and hedge effectiveness evaluation methods, please refer to “(8) Method of significant hedge
accounting” described in “4.SIGNIFICANT ACCOUNTING POLICIES” above.
(iii) Risk management system for financial instruments(a) 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, their 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.
(b) 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 withrespect to the identified currency fluctuation risks of foreign currency-denominated receivables and debts. Some
overseas subsidiaries also use currency swap transactions to reduce their exposure to exchange rate risk in theirtransactions with the parent company.
The Company periodically assesses the fair value of securities and investment securities as well as financial conditionsof issuers (counterparty companies), etc., and continuously reviews the holding status in view of relationships withcounterparty companies.
With regard to derivative transactions, the Finance and Accounting Dept. conducts transactions based on the interest
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 & Accounting
Dept. also manages derivative transactions by having them report the content of derivative transactions to the center
when they conduct such transactions or by other means.
(c) 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 & Accounting Dept. based on reports from each division and by maintaining liquidity on hand at a certain leveland by other means.
(iv) Supplemental remarks on fair values of financial instruments
Fair values of financial instruments comprise values based on market prices and reasonably determined values where
market prices are unavailable. Since variable factors are incorporated in calculation of the fair value, the value may varydepending 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.

61 Tokuyama Corporation Annual Report 2019

(2) Fair values of financial instruments
The book value of financial instruments, their fair value, and the differences between the two were as follows. The
financial instruments whose fair value is extremely difficult to determine are not given in the table below.
As of March 31, 2019
Fiscal year ended March 31, 2019[2019]Cash and deposits
Notes and accounts receivable - trade
Investment securities
Available-for-sale securities
Long-term loans receivable
Total assets
Notes and accounts payable - trade
Short-term loans payable
Long-term loans payable *1
Total liabilities
Derivative financial instruments *2
In which hedge accounting is not applied
In which hedge accounting is applied
Total derivative financial instruments[2019]Cash and deposits
Notes and accounts receivable - trade
Securities and Investment securities
Available-for-sale securities
Long-term loans receivable
Total assets
Notes and accounts payable - trade
Short-term loans payable
Long-term loans payable *1
Total liabilities
Derivative financial instruments *2
In which hedge accounting is not applied
In which hedge accounting is applied
Total derivative financial instruments

Millions of yen
Book value
Fair value
68,613
68,61380,35880,358Difference-

11,7482,444
163,164

11,7482,444
163,164-

47,2684,361
122,078
173,70947,268
4,361
122,956
174,587

878
878

(8)
(88)
(96)

(8)
(92)
(101)

(4)
(4)

Thousands of U.S. Dollars
Book value
Fair value
Difference
618,136
618,136
723,946
723,946
105,846
22,0191,469,949

105,846
22,0191,469,949-

425,841
39,296
1,099,807
1,564,946

425,841
39,296
1,107,720
1,572,858

7,912
7,912

(75)
(793)
(868)

(75)
(835)
(910)

(41)
(41)

(*1) The book value and fair value of long-term loans payable include current portion of long-term loans payable.
(*2) 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.

Tokuyama Corporation Annual Report 2019 62

As of March 31, 2018[2018]Cash and deposits
Notes and accounts receivable - trade
Securities and Investment securities
Securities
Available-for-sale securities
Long-term loans receivable
Total assets
Notes and accounts payable - trade
Short-term loans payable
Long-term loans payable *1
Total liabilities
Derivative financial instruments *2
In which hedge accounting is applied
Total derivative financial instruments

Millions of yen
Book value
Fair value
57,22957,22979,66079,660Difference-

10,00014,635
2,627
164,152

10,00014,635
2,627
164,152-

47,6102,549
135,205
185,365

47,6102,549
136,052
186,212

846
846

(218)
(218)

(225)
(225)

(7)
(7)

(*1) The book value and fair value of long-term loans payable include current portion of long-term loans payable.
(*2) 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.
(Note 1) Method for calculating the fair value of financial instruments, and matters regarding securities and derivativetransactions
Assets(i) Cash and deposits, (ii) Notes and accounts receivable – trade
Because these assets are mostly settled in a short period, their fair value is nearly equal to their book value. Therefore,
their fair value is based on the book value.
(iii) Investment securities
The fair value of available-for-sale securities is based on the price on the relevant exchange.
For matters to be noted on securities for each holding purpose, refer to the note “17.SECURITIES.”(iv) Long-term loans receivable
Because all long-term loans receivable bear floating interest rates and reflect market interest rates in a short period, andcredit standing of borrowers has not changed significantly since the loans were executed, their fair value is based on thebook value.
Liabilities(i) Notes and accounts payable – trade, (ii) Short-term loans payable
Because these liabilities are settled in a short period, their fair value is nearly equal to their book value. Therefore, theirfair value is based on the book value.
(iii) Long-term loans payable
The fair value of these liabilities is determined as the present value, which is calculated by discounting the total ofprincipal and interest using the interest rate that would be charged for a new similar loan.

63 Tokuyama Corporation Annual Report 2019

Derivatives
Refer to the note “18.DERIVATIVES.”(Note 2) Financial instruments whose fair value is extremely difficult to determine
Thousands of
U.S. Dollars

Millions of yen
2019Unlisted shares
Shares of associates
Bonds of associates
Total

2018
1,882
7,006
1,080
9,969

2019
16,95963,122
9,729
89,812

1,863
6,723
1,080
9,667

These financial instruments have no market price, and estimation of their future cash flows is expected to require
excessive cost. Therefore, since it is considered extremely difficult to determine the fair value, they are not included in“Investment securities.”(Note 3) Redemption schedule for monetary receivables and securities with maturities after the consolidated balance
sheet date
As of March 31, 2019[2019]

Millions of yen
Within 1 year

Cash and deposits
Notes and accounts receivable - tradeLong-term loans receivable
Total

68,61380,358179
149,151[2019]

Notes and accounts receivable - tradeLong-term loans receivable
Total

More than 5
year, within 10
years

More than 10
years

695
695

848
848

899
899

More than 1
year, within 5
years

More than 5
year, within 10
years

More than 10
years

6,270
6,270

7,644
7,644

8,105
8,105

More than 5
year, within 10
years

More than 10
years

Thousands of U.S. Dollars
Within 1 year

Cash and deposits

More than 1
year, within 5
years

618,136
723,946
1,620
1,343,704

As of March 31, 2018[2018]

Millions of yen
Within 1 year

Cash and deposits
Notes and accounts receivable - trade

More than 1
year, within 5
years

57,22979,660---10,000208
147,098

708
708

849
849

1,069
1,069

Securities and Investment securities
Securities
Long-term loans receivable

Total(Note 4) Repayment schedule by term for bonds payable, long-term loans payable, and other interest-bearing debt after
the consolidated balance sheet date
As of March 31, 2019

Tokuyama Corporation Annual Report 2019 64

[2019]Millions of yen
Within 1
year

Short-term loans payable
Bonds payable(*1)
Long-term loans payable
Total

4,361
12,667
17,029More than 1
year, within
2 years

More than
2 year,within 3
years

More than 3
year, within
4 years

More than
4 year,within 5
years

More than 5
years

15,994
15,994

9,770
9,770

21,837
21,837

1,000
1,000

60,80760,807

Thousands of U.S. Dollars
More thanMore than 3
2 year,year, within
within 3
4 years
years

More than
4 year,within 5
years

More than 5
years

9,012
9,012

547,818
547,818

More than 4
year, within
5 years

More than 5
years

21,58921,58961,00161,001[2019]
Within 1
year

Short-term loans payable
Bonds payable(*1)
Long-term loans payable

39,296
114,120
153,417More than 1
year, within
2 years

144,096
144,096

88,022
88,022

196,735
196,735

Total(*1) In the cases of the 20th, 22nd and 24th series of unsecured bonds, we delegated the performance of the obligation
based on an unsecured bond trust-type debt assumption agreement that had been executed with a bank. Accordingly,
although the liabilities pertaining to those unsecured bonds and the amount paid under that same contract offset eachother, since the obligation to redeem the Company’s unsecured bonds to bondholders Continues until the time of theirredemption, this is noted as a contingent liability on the consolidated balance sheets.
As of March 31, 2018[2018]
Within 1
year

Short-term loans payable
Bonds payable(*1)
Long-term loans payable

2,549
15,684
18,233More than 1
year, within
2 years

12,076
12,076

Millions of yen
More thanMore than 2
3 year,year, within
within 4
3 years
years

15,434
15,434

9,419
9,419

Total
(*1) In the cases of the 20th, 22nd and 24th series of unsecured bonds, we delegated the performance of the obligation
based on an unsecured bond trust-type debt assumption agreement that had been executed with a bank. Accordingly,
although the liabilities pertaining to those unsecured bonds and the amount paid under that same contract offset eachother, since the obligation to redeem the Company’s unsecured bonds to bondholders continues until the time of theirredemption, this is noted as a contingent liability on the consolidated balance sheets.

65 Tokuyama Corporation Annual Report 2019

17. SECURITIES(1) Trading securities
Not applicable.
(2) Held-to-maturity debt securities
Not applicable.
(3) Available-for-sale securities
As of March 31, 2019[2019]
Millions of yen
Acquisition cost Unrealized gain

Book value
Available-for-sale securities:
Securities with book values exceedingacquisition costs
Equity securities
Debt securities
Other
Subtotal
Securities with book values not exceedingacquisition costs
Equity securities
Debt securities
Other
Subtotal
Total

4,654
4,654

2,796
2,796

1,858
1,858

7,094
7,094
11,748

10,155
10,155
12,951(3,060)(3,060)(1,202)

Book value
Available-for-sale securities:
Securities with book values exceedingacquisition costs
Equity securities
Debt securities
Other
Subtotal
Securities with book values not exceedingacquisition costs
Equity securities
Debt securities
Other
Subtotal
Total

Thousands of U.S. Dollars
Acquisition cost Unrealized gain

41,934
41,93425,19425,194

16,73916,73963,912
63,912
105,846

91,48791,487
116,682(27,574)(27,574)(10,835)

Millions of yen
Acquisition cost

Unrealized gain

6,980
6,980

3,965
3,965

3,015
3,015

7,654
10,00017,654
24,635

8,679
10,00018,67922,644(1,024)(1,024)
1,990

As of March 31, 2018[2018]
Book value
Available-for-sale securities:
Securities with book values exceedingacquisition costs
Equity securities
Debt securities
Other
Subtotal
Securities with book values not exceedingacquisition costs
Equity securities
Debt securities
Other
Subtotal
Total

Tokuyama Corporation Annual Report 2019 66

(4)Available-for-sale securities sold
As of March 31, 2019[2019]
Millions of yen
Gain on sales

Proceeds
Available-for-sale securities sold during 2019 :Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Total

Loss on sales

46

1

-

46

1

-

Thousands of U.S. Dollars
Proceeds
Gain on sales
Loss on sales
Available-for-sale securities sold during 2019 :Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Total

415

11

-

415

11

-

As of March 31, 2018[2018]
Millions of yen
Gain on sales

Proceeds
Available-for-sale securities sold during 2018 :Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Total

67 Tokuyama Corporation Annual Report 2019

Loss on sales

38

6

6

38

6

6

18. DERIVATIVES(1) Derivative transactions to which hedge accounting is not applied(i)Currency-related derivatives
As of March 31, 2019[2019]
Main hedged items
Not applied Hedge accounting method
Principle-based accounting
Currency Swap
Receiving JPY, Paying TWD
Total

Long-term loans payable[2019]
Main hedged items
Not applied Hedge accounting method
Principle-based accounting
Currency Swap
Receiving JPY, Paying TWD
Total

Long-term loans payable

Millions of yen
Maturing
Notional
after
value
one year Fair value

400
400

400
400

(8)
(8)

Thousands of U.S. Dollars
Maturing
Notional
after
value
one year Fair value

3,603
3,603

3,603
3,603

(75)
(75)

(Note) Method for calculation of fair value
Fair values are calculated based on the price presented by counterparty financial institutions, etc.
As of March 31, 2018
Not applicable.
(ii) Interest
Not applicable.
(2) Derivative transactions to which hedge accounting is applied(i)Currency-related derivatives
As of March 31, 2019[2019]
Main hedged items

Millions of yen
Maturing
Notional
after
value
one year Fair value

Hedge accounting method
Principle-based accounting
Forward exchange agreements
Call
Korean Won
Total

Forecast transaction inforeign currencies

42
42

-

(0)
(0)

Tokuyama Corporation Annual Report 2019 68

[2019]Main hedged items

Thousands of U.S. Dollars
Maturing
Notional
after
value
one year Fair value

Hedge accounting method
Principle-based accounting
Forward exchange agreements
Call
Korean Won
Total

Forecast transaction inforeign currencies

384
384

-

(5)
(5)

(Note) Method for calculation of fair value
Fair values are calculated based on the price presented by counterparty financial institutions, etc.
As of March 31, 2018
Not applicable.
(ii) Interest
As of March 31, 2019[2019]
Main hedged items
Hedge accounting method
Principle-based accounting
Interest rate swaps
Pay fixed rate, receive floating
rate
SubtotalSpecial accounting procedures forinterest rate swaps
Interest rate swaps
Pay fixed rate, receive floating
rate
Subtotal
Total

Long-term loans
payableLong-term loans
payable[2019]
Main hedged items
Hedge accounting method
Principle-based accounting
Interest rate swaps
Pay fixed rate, receive floating
rate
SubtotalSpecial accounting procedures forinterest rate swaps
Interest rate swaps
Pay fixed rate, receive floating
rate
Subtotal
Total
69 Tokuyama Corporation Annual Report 2019

Long-term loans
payableLong-term loans
payableMillions of yen
Maturing
Notional
after
value
one year Fair value

5,400
5,400

3,800
3,800

(87)
(87)

630
630
6,030

450
450
4,250

(4)
(4)
(92)

Thousands of U.S. Dollars
Maturing
Notional
after
value
one year Fair value

48,64848,64834,234
34,234

(788)
(788)

5,675
5,675
54,3244,054
4,054
38,288

(41)
(41)
(830)

(Note) Method for calculation of fair value
Fair values are calculated based on the price presented by counterparty financial institutions, etc.
As of March 31, 2018[2018]
Main hedged items
Hedge accounting method
Principle-based accounting
Interest rate swaps
Pay fixed rate, receive floating
rate
SubtotalSpecial accounting procedures forinterest rate swaps
Interest rate swaps
Pay fixed rate, receive floating
rate
Subtotal
Total

Long-term loans
payableLong-term loans
payableMillions of yen
Maturing
Notional
after
value
one year Fair value

67,00067,000

5,400
5,400

(218)
(218)

810
810
67,810

630
630
6,030

(7)
(7)
(225)

(Note) Method for calculation of fair value
Fair values are calculated based on the price presented by counterparty financial institutions, etc.

Tokuyama Corporation Annual Report 2019 70

19. 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 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 the companies. The Company has a retirement benefit trust.
(2) Defined benefit plans(i) Reconciliation of beginning and ending balances of retirement benefit obligations

Balance of defined benefit obligations at beginning of year

Service cost
Interest cost
Occurrence of actuarial gain and loss
Payments of retirement benefits
Other
Balance of defined benefit obligations at end of year

Millions of yen
2019
2018
16,952
17,286
843
850
125
128
95
(417)
(1,292)(903)
553
817,27916,952Thousands of
U.S. Dollars

2019
152,728
7,601
1,129
863
(11,642)
4,988
155,668(Note) The consolidated domestic subsidiaries, except for two companies, have adopted the simplified accounting
method in calculating retirement benefit obligations.
(ii) Reconciliation of beginning and ending balances of pension assets

Balance of pension assets at beginning of year
Expected return on pension assets
Occurrence of actuarial gain and loss
Corporation's contributions
Payments of retirement benefits
Balance of pension assets at end of year

Millions of yen
2019
2018
25,082
24,792
473
467
(105)
0
575
582
(1,098)(761)
24,92625,082Thousands of
U.S. Dollars

2019
225,969
4,269
(954)
5,180
(9,899)224,564(iii) Reconciliation of ending balances of retirement benefit obligations and pension assets to net defined benefit
liability and net defined benefit asset recorded in the consolidated balance sheets
Thousands ofMillions of yen
U.S. Dollars

Unfunded defined benefit obligations

2019
15,289(24,926)(9,636)
1,989

2018
15,567(25,082)(9,514)
1,384

2019
137,746(224,564)(86,818)
17,921

Net amount shown on balance sheets(7,647)(8,129)(68,896)

Net defined benefit liability
Net defined benefit asset

2,149(9,796)

1,527(9,657)

19,361(88,258)

Net amount shown on balance sheets(7,647)(8,129)(68,896)

Funded defined benefit obligations
Pension assets

71 Tokuyama Corporation Annual Report 2019

(iv) Retirement benefit expenses and a breakdown of the retirement benefit expenses

Service cost (Note)
Interest cost
Expected return on pension assets
Expensed actuarial gain and loss
Retirement benefit expenses regarding to vested benefits system

Millions of yen
2019
2018
843
850
125
128
(473)
(467)
(422)
(183)
72
327

Thousands of
U.S. Dollars

2019
7,601
1,129
(4,269)(3,809)651(Note) Retirement benefit expenses of the consolidated domestic subsidiaries that have adopted the simplified
accounting method are included in “Service cost.”(v) Remeasurements of defined benefit plans
A breakdown of items recorded in adjustment of retirement benefit (before deduction of tax effects) is as follows:
Thousands ofMillions of yen
U.S. Dollars

Actuarial gain and loss
Total

2019
(624)
(624)

2018
233
233

2019
(5,627)(5,627)(vi) Accumulated adjustment of retirement benefits
A breakdown of items recorded in accumulated adjustment of retirement benefit plans (before deduction of tax effects)
is as follows:
Thousands ofMillions of yen
U.S. Dollars

Unrecognized actuarial gain and loss
Total

2019
3,787
3,787

2018
4,412
4,412

2019
34,121
34,121(vii) Matters relating to pension assets(a) Principal items of pension assets
The proportion of each principal category to the total of pension assets is as follows:%
2019
Domestic stocks
Foreign stocks
Domestic bonds
Foreign bonds
Insurance product (General account)
Deposits
Other
Total

2018
10
7
28
13
16
11
15
100

10
7
27
12
16
21
7
100

(Note 1) Total of pension assets as of March 31, 2018 and March 31, 2019 included a retirement benefit trust,established for the Company’s pension plans that represented 10% and 10% of the total of pension assets, respectively.
(b) 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 aswell as the current and expected rate of return from each category of the pension assets.

Tokuyama Corporation Annual Report 2019 72

(viii) 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)

Discount rate
Expected long-term return on pension assets

2019
0.8%
2.1%

2018
0.8%
2.1%

(3) Defined contribution plans
The amount which the Company and its consolidated subsidiaries were required to contribute to the defined
contribution plans was ¥527 million for the previous fiscal year and ¥507 million (US$4 million) for the fiscal year
under review.

20. STOCK OPTION
Not applicable.

21. TAX EFFECT ACCOUNTING(1) Breakdown of deferred tax assets and liabilities by their main occurrence causes

Millions of yen
2019
2018
Deferred tax assets：
Deficits (Note 2)
Excess depreciation and amortization
Provision for repairs
Amount carried forward tax credit limit excess
Provision for bonuses
Provision for retirement benefits
Inventories
Other
Subtotal
Valuation allowance（Deficits）(Note 2)
Valuation allowance（Temporary difference）
Less valuation allowance (Note 1)
Total deferred tax assets

56,371
2,698
1,447
1,186
832
785
532
2,883
66,738(37,464)(3,075)(40,540)
26,19860,832
3,308
1,656
1,022
792
500
578
2,176
70,868(47,563)
23,305

Thousands of
U.S. Dollars

2019507,855
24,31013,03910,690
7,502
7,077
4,795
25,979601,252(337,515)(27,710)(365,226)
236,025

Deferred tax liabilities：
Prepaid benefit cost
(2,795)(2,751)(25,184)
Reserve for reduction entry(1,235)(1,154)(11,133)
Retained earnings of subsidiaries and affiliates
(646)
(576)
(5,824)
Other
(650)
(820)
(5,858)Subtotal(5,328)(5,302)(48,001)
Valuation allowance0
7
Total deferred tax liabilities (Note 3)(5,327)(5,302)(47,994)
Net deferred tax assets
20,871
18,002
188,031(Note 1) Valuation allowance decreased by ¥7,023 million (US$63 million). This decline is primarily due to¥6,673 million (US$60 million) in valuation allowance related to consolidated loss carry-forwards no longer being
recognized following an increase in future taxable income forecasts for the consolidated tax group compared withthe end of the previous fiscal year.

73 Tokuyama Corporation Annual Report 2019(Note 2) Amounts of deficits and related differed tax assets by tax loss carry-forwards for the year ended March
31, 2019, were as follows.
As of March 31,2019Millions of yen

Within 1
year

More than
1 year,within 2
years

More than 2 More than 3 More than 4
year, within year, within year, within
3 years
4 years
5 years

More than
5 years

Total

Deficits (*1)

548

60

383

567

330

54,481

56,371

Valuation allowance

417

56

367

546

327

35,74837,464

Deferred tax assets

131

4

16

21

2

18,732(*2) 18,907

Thousands of U.S. dollars

Within 1
year

More than
1 year,within 2
years

More than 2 More than 3 More than 4
year, within year, within year, within
3 years
4 years
5 years

More than
5 years

Total

Deficits (*1)

4,942

548

3,457

5,113

2,973

490,820

507,855

Valuation allowance

3,760

512

3,308

4,924

2,950

322,058

337,515

Deferred tax assets

1,181

36

148

189

23

168,762(*2) 170,340(*1) Deficits are the amount after multiplying the statutory tax rate.
(*2) Regarding deficits of ¥56,371 million (US$507 million) (amount after multiplying the statutory tax rate), theCompany records deferred tax assets of ¥18,907 million (US$170 million). Regarding deficits, valuation
allowance related to the portion deemed to be recoverable based on future taxable income forecasts is notrecognized.
(Note 3) The net amount of deferred tax assets for the previous fiscal year and the fiscal year under review isincluded in the following items under Consolidated Balance Sheets.

Deferred tax assets
Deferred tax liabilities

Millions of yen
2019
2018
21,091
18,300(220)(298)

Thousands of
U.S. Dollars

2019
190,014(1,982)(2) Reconciliation of significant difference between the statutory tax rate and the effective tax rate after applying tax
effect accounting

Statutory tax rate
Increase (decrease) in income taxes resulting from：
Change in valuation allowance allocated to income tax expenses
Effect of tax credits
Dividend and other items excluded permanently from taxable income
Inter-company eliminations of dividends income
Inter-company eliminations of allowance for investment loss

Other
Effective income tax rate

2019
30.5 %

201830.7 %(19.3)
(3.4)
(1.9)
1.4
(1.1)
1.7
7.9 %

(13.2)
(0.6)
(1.8)
1.5
6.2
22.8 %

22. BUSINESS COMBINATION

Description of content has been omitted due to a lack of importance.

23. ASSET RETIREMENT OBLIGATIONS(1) Asset retirement obligations included in the consolidated balance sheets
The Group has obligations to restore site to its original state at the time of leaving or termination of the business andafter termination of mining for branches, etc. that use an office under an real estate lease agreement or certain businessTokuyama Corporation Annual Report 2019 74

offices that use a plant or site for sales facilities, as well as mines. Of these obligations, for certain obligations to restoresite to its original state at the time of leaving a rental building under a building lease agreement for which the timing of
performance and amount can be reasonably estimated at the present moment based on past records, asset retirement
obligations have been recorded. The note on the content of asset retirement obligations is omitted because ofimmateriality.
(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 toreasonably estimate the timing, scope, and probability of execution for the obligations. Therefore, asset retirement
obligations corresponding to the obligations have not been recorded.

24. INVESTMENT AND RENTAL PROPERTIES
Information is omitted because of immateriality of the total amount of investment and rental properties.

25. 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 isavailable 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 businessdivision 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
four reportable segments, “Chemicals,” “Specialty Products,” “Cement,” and “Life & Amenity.”
Main products and services of each reportable segment are as follows:
Chemicals: Caustic soda, Soda ash, Calcium chloride, Sodium silicate, Vinyl chloride monomer, Polyvinyl chloride
resin, Propylene oxide, Isopropyl alcohol and Chlorinated solvents
Specialty Products: Polycrystalline silicon, Fumed silica, Tetrachlorosilane, Aluminum nitride, High-purity chemicals
for electronics manufacturing, and Photoresist developer
Cement: Cement, Ready-mixed concrete, Cement-type stabilizer, and Resourece recycling businessLife & Amenity: Polyolefin film, Plastic window sashes, Medical diagnosis systems, Dental materials and equipment,
Ion exchange membranes, Pharmaceutical ingredients and intermediates, Plastic lens-related materials for glasses, andMicroporous film
(2) Calculation of sales, income (loss), assets and other items by reportable segment
The accounting methods applied to reportable segments are identical to those stated in “4. SIGNIFICANTACCOUNTING POLICIES.”
Inter-segment sales or transfer are based on market prices.
Reportable segment’s profit (loss) is based on operating profit.

75 Tokuyama Corporation Annual Report 2019

(3) Information on net sales, profit (loss), assets and other items by reportable segment
Fiscal year ended March 31, 2019[2019]

Millions of yen
Chemicals

Specialty
Products

CementLife &
Amenity

Others(Note 1)

Sales to customers
Inter-segment
sales/transfer

97,47147,19391,491

52,33836,165

324,661-

324,661908

12,474874

2,041

26,211

42,511(42,511)-

Total sales

98,38059,66892,36654,38062,377367,172(42,511)324,661

Segment income

16,850

9,934

3,204

3,238

4,335

37,564(2,301)35,262

Segment assets

53,99562,91655,42758,352

52,180282,872

96,757

379,630

2,582

2,533

3,359

2,370

3,470

14,315

777

15,093

3,375

5,404

3,507

2,053

2,757

17,0981,970

19,069Adjustment

Consolidated(Note 2)

(Note 3)

Total

Adjustment

Consolidated(Note 2)

(Note 3)

Sales

Other items
Depreciation andamortization (Note4)
Increase in property,
plant and equipment
and intangible
assets(Note 5)[2019]

Thousands of U.S. Dollars
Chemicals

Specialty
Products

CementLife &
Amenity

Others(Note 1)

Total

Sales to customers
Inter-segment
sales/transfer

878,122425,169

824,250

471,518

325,8132,924,874-

2,924,874

8,186

112,386

7,878

18,392

236,142

382,986(382,986)

-

Sales

Total sales

886,309537,555

832,129

489,910

561,956

3,307,861(382,986)

2,924,874

Segment income

151,81089,501

28,86629,17839,057

338,414(20,732)

317,682

Segment assets

486,442566,817499,346

525,702

470,0912,548,399

871,691

3,420,091

Other items
Depreciation andamortization (Note4)
23,261
22,82830,26521,35531,261
128,972
7,004
135,976
Increase in property,
plant and equipment
and intangible
assets(Note 5)
30,407
48,692
31,60018,49524,842
154,039
17,756
171,795(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 adjustment amount consists mainly of basic R&D expenses that are not allocable to a specificreportable segment and the amount of inter-segment eliminations.
(ii) The segment assets adjustment amount includes corporate assets that are not allocated to a specific reportablesegment (¥123,133 million / US$1,109 million).
(Note 3) Segment profit 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.

Tokuyama Corporation Annual Report 2019 76

Fiscal year ended March 31, 2018[2018]

Millions of yen
Chemicals

Specialty
Products

CementLife &
Amenity

Others(Note 1)

Sales to customers
Inter-segment
sales/transfer

92,51247,64087,05849,586

31,263308,061-

308,061

1,034

11,038286

1,993

23,262

37,615(37,615)-

Total sales

93,54658,67887,34551,57954,526345,676(37,615)

308,061

Segment income

16,175

11,003

4,568

3,728

6,214

41,691(422)

41,268Segment assets

53,98152,471

53,83557,57746,862

264,728

97,221

361,949

Total

Adjustment

Consolidated(Note 2)

(Note 3)

Sales

Other items
Depreciation andamortization (Note
4)
2,244
2,445
3,195
2,086
3,159
13,131854
13,985
Increase in property,
plant and equipment
and intangible
assets(Note 5)
2,753
3,386
3,059
4,857
1,813
15,871424
16,295(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 adjustment amount consists mainly of basic R&D expenses that are not allocable to a specificreportable segment and the amount of inter-segment eliminations.
(ii) The segment assets adjustment amount includes corporate assets that are not allocated to a specific reportablesegment (¥124,248 million).
(Note 3) Segment profit 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.
[RELATED INFORMATION]
Fiscal year ended March 31, 2019(1) Information by product and service
Information is omitted as identical information is disclosed in segment information.
(2) Information by region(i) Net sales

Japan
Asia
Others
Total

Millions of yen
2019
263,449
49,292
11,919324,661

Thousands of U.S.
Dollars

2019
2,373,423
444,072
107,379
2,924,874(Note) Net sales are categorized into countries or regions based on the location of customers.
(ii) Property, plant and equipment

The listed amount of property, plant and equipment has been omitted because over 90% of property, plant andequipment listed on Consolidated Balance Sheets is located in Japan.
(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.

77 Tokuyama Corporation Annual Report 2019

Fiscal year ended March 31, 2018(1) Information by product and service
Information is omitted as identical information is disclosed in segment information.
(2) Information by region(i) Net sales

Japan
Asia
Others
Total

Millions of yen
2018
244,135
53,032
10,892
308,061(Note) Net sales are categorized into countries or regions based on the location of customers.
(ii) Property, plant and equipment

The listed amount of property, plant and equipment has been omitted because over 90% of property, plant andequipment listed on Consolidated Balance Sheets is located in Japan.
(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.

Tokuyama Corporation Annual Report 2019 78

[INFORMATION ON IMPAIRMENT LOSS OF NON-CURRENT ASSETS BY REPORTABLE SEGMENT]Fiscal year ended March 31, 2019[2019]

Millions of yen
Life &

Specialty

OthersCementChemicals

Impairment loss-

Adjustment

Total

Amenity

Products-[2019]

-

363

-

-

363

Thousands of U.S. Dollars
Life &

Specialty

OthersCementChemicals

Impairment loss-

Adjustment

Total

Amenity

Products

-

-

3,277

-

-

3,277

Fiscal year ended March 31, 2018[2018]

Millions of yen
Life &

Specialty

OthersCementChemicals

Impairment loss-

Adjustment

Total

Amenity

Products

22

-

1,076

-

-

1,098

[INFORMATION ON AMORTIZATION OF GOODWILL AND UNAMORTIZED BALANCE BYREPORTABLE SEGMENT]Fiscal year ended March 31, 2019[2019]

Millions of yen
Chemicals

Specialty
Products

Cement

-

7
10

937
197

Amortization of
goodwill
Unamortized balance[2019]

Life &
Amenity

Others-Adjustment

-

-

Total

944
208

Thousands of U.S. Dollars
Chemicals

Specialty
Products

Cement

-

63
94

8,441
1,781

Amortization of
goodwill
Unamortized balanceLife &
Amenity

Others-Adjustment

-

-

Total

8,504
1,876

There is neither amortization of negative goodwill nor unamortized balance arising from business combinations
conducted on and before April 1, 2010.
Fiscal year ended March 31, 2018[2018]

Amortization of
goodwill
Unamortized balance

Millions of yen
Chemicals

Specialty
Products-

7
17

79 Tokuyama Corporation Annual Report 2019

Cement

1,282
1,140

Life &
Amenity

Others-Adjustment

-

-

Total

1,289
1,158

There is neither amortization of negative goodwill nor unamortized balance arising from business combinations
conducted on and before April 1, 2010.
[INFORMATION ON GAIN ON BARGAIN PURCHASE BY REPORTABLE SEGMENT]Fiscal year ended March 31, 2019

In the fiscal year under review, the Company records gain on bargain purchase of ¥964 million under “Others”
segment.
Fiscal year ended March 31, 2018
Not applicable.

26. INFORMATION ON RELATED PARTIES
Fiscal years ended March 31, 2019 and 2018
Not applicable.

27. PER SHARE INFORMATION

Net assets per share
Earnings per share
Diluted earnings per share

yen
2019
2,199.83
493.26-2018
1,806.56
259.81-

U.S.Dollars
2019
19.81
4.44
-

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

Total net assets on Blance Sheets
Net assets related to common shares
Major breakdown of difference
Non-controling interests

Number of shares outstanding of common shares
Number of treasury shares of common shares
Number of common shares used to calculate net assets per
share
2Millions of yen
2019
2018
163,525
136,591
152,781
125,656
10,743

10,935

Thousands of
U.S. Dollars

2019
1,473,200
1,376,411
96,788

Thousand shares
2019
2018
69,934
69,934482
378
69,451

69,555

Earnings per share

Profit attributable to owners of parent
Amount not attributable to common shareholders(Of the above, the difference between the issue price andrepurchase price related to A class shares)
Profit related to common shares attributable to owners of parent

Average number of common shares during the period

Millions of yen
2019
2018
34,27919,698

Thousands of
U.S. Dollars

2019308,820(-)(1,626)(-)

34,27918,072308,820

1,626

Thousand shares
2019
2018
69,49569,560Tokuyama Corporation Annual Report 2019 80

(Note 2) The Company consolidated its common shares at a ratio of one share for each five shares effective as of
October 1, 2017. On this basis, net assets per share and earnings per share data are calculated on the assumption that theconsolidation of shares was conducted as of the beginning of the preceding fiscal year.

(Note 3) Company shares held in the executive compensation BIP (Board Incentive Plan) trust are included intreasury stock deducted when calculating the average number of common stock for the fiscal year. Of note, theaverage number of Company shares for the consolidated fiscal year under review held in the executive
compensation BIP trust is 58,000 (previous fiscal year not applicable).
(Note 4) Diluted net income per share is not listed due to the absence of diluted shares.

28. SIGNIFICANT SUBSEQUENT EVENTS

Not applicable.

29. ANNEXED CONSOLIDATED DETAILED SCHEDULES(1) Schedule of bonds payable
Thousandsof U.S.
Dollars

Millions of yen
Company

Tokuyama

Tokuyama

Tokuyama

Issue
20th unsecured
bonds without
collateral

22nd unsecured
bonds without
collateral
24th unsecured
bonds without
collateral

Total
The amounts to beredeemed within 1 year

Date ofIssuance

Interest
rate

collateral

the term ofredemption

March 10,2010

1.760%No

March 10,2020

10,00010,00090,090

The amounts tobe redeemedwithin 1 year

10,000-90,090

2019

2018

2019

September
9, 20101.478%

No

September 9,
2020

15,00015,000135,135

September
8, 20111.371%

No

September 8,
2021

9,400

9,400

84,684－－－－34,40034,400309,909

10,000-90,090(Note 1) In the cases of the 20th, 22nd and 24th series of unsecured bonds, we delegated the performance of theobligation based on an unsecured bond trust-type debt assumption agreement that had been executed with a bank.
Accordingly, although the liabilities pertaining to those unsecured bonds and the amount paid under that same contract
offset each other, since the obligation to redeem the Company’s unsecured bonds to bondholders continued until thetime of their redemption, this is noted as a contingent liability on the consolidated balance sheets.
(Note 2) Amounts of redemption within five years after the consolidated balance sheet date are as follows:
Thousands of
U.S. Dollars

Millions of yen
Year ending March 31
2020

10,00090,0902021

15,000135,135

2022

9,400

84,684

2023

-

-

2024

-

-

81 Tokuyama Corporation Annual Report 2019

(2) Schedule of loans payable
Thousandsof U.S.
Dollars

Millions of yen
2019

2018

2019

Short-term loans payable (0.63%)

4,361

2,549

39,296

Current portion of long-term loans payable (0.86%)

12,667

15,684

114,120

Current portion of lease obligations
Long-term loans payable, due in 2020-2078 (1.32%)

758
109,411641
119,5216,831
985,687

1,767

1,521

15,925

128,966

139,917

1,161,861

Lease obligations, due in 2020-2027
Total(Note 1) “Average interest rate” shows the weighted average interest rate on the ending balance of loans payable, etc.
(Note 2)The average interest rate on lease obligations is not presented because lease obligations are recorded at theamount before deduction of the amount equivalent to interest included in total lease payments, in the consolidatedbalance sheets.
(Note 3)The amounts of long-term loans payable and lease obligations (excluding current portion of them) to be repaid
within five years after the consolidated balance sheet date are as follows:
Lomg-term loans payable

Millions of yen

Thousands of
U.S. Dollars

Year ending March 31
2021

15,994

144,096

2022

9,770

88,022

2023

21,837

196,735

2024

1,000

9,012

Lease liabilities

Millions of yen

Thousands of
U.S. Dollars

Year ending March 31
2021

642

5,792

2022

532

4,798

2023

357

3,224

2024

179

1,621

(3) Schedule of asset retirement obligations
Information is omitted since the amounts of asset retirement obligations at the beginning and end of the fiscal year
under review are 1% or less of the total of liabilities and net assets at the beginning and end of the fiscal year underreview.

Tokuyama Corporation Annual Report 2019 82

(4) Others
Quarterly information for the fiscal year ended March 31, 2019

【Millions of yen】

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

75,825

152,699

238,289

Current
consolidated
fiscal year
324,661

8,446

15,90523,80838,017

6,658

12,833

19,57034,27995.73

184.55281.56493.26

1Q

2Q

1Q

Net income per share (yen)

3Q

2Q
95.73

3Q
88.83

4Q
97.00

211.78【Thousands of U.S. Dollars】

Accumulated period
Net sales(Thousands of U.S. Dollars)Profit before income taxes(Thousands of U.S. Dollars)Profit attributable to owners ofparent(Thousands of U.S. Dollars)
Net income per share(U.S. Dollars)
Accounting period

1Q

Current
consolidated
fiscal year

2Q

3Q

683,108

1,375,667

2,146,750

2,924,874

76,094

143,291

214,493

342,503

59,985

115,617

176,313308,820

0.86

1.66

2.53

4.44

1Q

2Q

3Q

4Q

Net income per share
0.86
0.80
0.87
1.90
(U.S. Dollars)(Note) The Company has introduced an executive compensation BIP (Board Incentive Plan) trust from September 3,
2018 and records Stocks of the Company held in said trust as treasury stock. In addition, said shares are included intreasury stock deducted when calculating the average number of shares for the fiscal year based on calculations of
net income per share.

83 Tokuyama Corporation Annual Report 2019

Tokuyama Corporation Annual Report 2019 84

Major Subsidiaries and Affiliates(As of March 31, 2019）

Company

Capital(millions ofyen)

Ownership
(%)

Scope

Chemicals
Tokuyama Soda Trading Co., Ltd.

10

100

Sale of soda ash and calcium chloride

Shin Dai-ichi Vinyl Corporation

2,000

85.5

Production and sale of polyvinyl chloride

98

100

Production and sale of polyvinyl chloride compounds

CNY
433 million

100

Production and sale of fumed silica

250

65.0

Production and sale of aluminum nitride

100

Production and sale of high purity chemicals forelectronics manufacturing

100

Production and sale of high purity chemicals forelectronics manufacturing

50.0

Production and sale of photoresist developer

67.2

Production and sale of ready-mixed concrete

Tokuyama Nouvelle Calédonie S.A.

100
XPF
210 million

75.6

Production and sale of cement

Tokyo Tokuyama Concrete Co., Ltd.

80

99.9

Production and sale of ready-mixed concrete andconcrete products

Seibu Tokuyama Ready Mixed Concrete Co., Ltd.

100

100

Production and sale of ready-mixed concrete

Kawasaki Tokuyama Ready Mixed Concrete Co.,
Ltd.

40

100

Production and sale of ready-mixed concrete

Kyushu Tokuyama Ready Mixed Concrete Co., Ltd.

50

100

Production and sale of ready-mixed concrete

Chugoku Ready Mixed Concrete Co., Ltd.

80

52.3

Production and sale of ready-mixed concrete

Notsuharu Co., Ltd

3

100

Production and sale of ready-mixed concrete

Tokuyama Tsusho Trading Co., Ltd.

95

100

Sale of cement and ready-mixed concrete

Kansai Tokuyama Trading Co., Ltd.

80

100

Sale of cement and ready-mixed concrete

Tokusho Co., Ltd.

40

100

Sale of cement and ready-mixed concrete

Tokushin Co., Ltd.

40

100

Sale of cement and ready-mixed concrete

Tokuyama Mtech Corporation

50

100

Processing and sale of building materials*Yamaguchi Eco-tech Corporation

90

50.0

Recycling business of incinerated ash of wastes

100

Production and sale of microporous film

Sun•Tox Co., Ltd.

CNY
85 million
300

80.0

A&T Corporation

577

40.2

Tokuyama Dental Corporation

100

100

ASTOM Corporation

450

55.0

Production and sale of polyolefin films
Production and sale of diagnostic reagents, analyzers
and systems
Production and sale of dental and medical materials
Production, sale and maintenance of ion-exchange
membranes and related equipment

Sun Arrow Kasei Co., Ltd.
Category also includes another 4 affiliates
Specialty Products
Tokuyama Chemicals (Zhejiang) Co., Ltd.
Tokuyama-Dowa Power Materials Co., Ltd.
Tokuyama Electronic Chemicals Pte. Ltd.
Taiwan Tokuyama Corporation*Hantok Chemicals Co., Ltd.

SGD
11,000thousandTWD
200 million
KRW
4,500 million

Category also includes another 1 consolidated subsidiary
CementHiroshima Ready Mixed Concrete Co., Ltd

Category also includes another 4 consolidated
subsidiaries, 4 equity method affiliates and 13
affiliates
Life & Amenity
Shanghai Tokuyama Plastics Co., Ltd.

85 Tokuyama Corporation Annual Report 2019

Company

Capital(millions ofyen)

Ownership
(%)

Scope

Excel Shanon Corporation

495

100

Production and sale of plastic window sashes

Tohoku Shanon Co., Ltd.

300

72.0

Production of plastic window sashes* Figaro Engineering Inc.

99

33.4

Production and sale of sensor devices

100

Sale of Tokuyama’s products

100

Sale of Tokuyama’s products

100

Sale of Tokuyama’s products

Category also includes another 4 consolidated
subsidiary
OthersTokuyama (Shanghai) Co., Ltd.

SGD
800
thousandEUR
255
thousandCNY
5 million
KRW
500 million
CNY
12 million

Tomitec Co., Ltd.
Shunan System Sangyo Co., Ltd.

100
100

60.0
100

Management company to provide services for othergroup companies in China
Production and sale of plastic molded products
Real estate, civil engineering, construction

Tokuyama Logistics Corporation

100

100

Transportation and warehousing

TOKUYAMA KAIRIKU UNSO K.K.

63

100

Transportation, warehousing and port cargo handling

Tokuyama Information Service Corporation

20

100

Information processing services

Shunan Bulk Terminal Co., Ltd.

150

83.3

Warehouse operations for bulk cargoes of coal etc.

Tokuyama Asia Pacific Pte. Ltd.
Tokuyama Europe GmbH
Tokuyama Trading (Shanghai) Co., Ltd.
Tokuyama Korea Co., Ltd.

100
100

Sale of Tokuyama’s products* CoorsTek Tokuyama Corporation

100

30.0

Production and sale of ceramics and electrochemical
products* Tokuyama Polypropylene Co., Ltd.

100

50.0

Production and sale of polypropylene* Nishinihon Resicoat Co., Ltd.

50

50.0

Production of metal parts and anti-rust surface coating
materials

Category also includes another 5 consolidated
subsidiaries and 4 affiliates*Equity method affiliates

Tokuyama Corporation Annual Report 2019 86

Corporate Data and Stock Information(As of March 31, 2019)

Composition of Shareholders
Company Name:

Tokuyama Corporation

Established:

February 16, 1918

Capital:¥10,000 million

Employees:

5,471 (Consolidated)

Fiscal Year:

From April 1 to March 31

General Meeting of
Shareholders:

June

Stock Listing:Tokyo

Minimum Number of
Shares per Trade:

100 shares

Stock:

4043

Major Shareholders
Number of Shares Held(Thousands)

Percentage ofTotal Shares

The Master Trust Bank of Japan, Ltd. (trust account)

7,786

11.20

Japan Trustee Services Bank, Ltd. (trust account)

6,710

9.65

Nippon Life Insurance Company

2,174

3.13

The Yamaguchi Bank, Ltd.

1,649

2.37

Meiji Yasuda Life Insurance Company

1,488

2.14

Sojitz Corporation

1,296

1.86

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

1,288

1.85

Sumitomo Metal Mining Co., Ltd.

1,180

1.70

Japan Trustee Services Bank, Ltd. (trust account 5)

1,109

1.59

Tokio Marine & Nichido Fire Insurance Co., Ltd.

1,104

1.59

Name

Stock Chart

87 Tokuyama Corporation Annual Report 2019

Tokuyama Corporation Annual Report 2019 88

89 Tokuyama Corporation Annual Report 2019