(Reference Translation)
Nov 5, 2021

OSAKA SODA CO., LTD.
CONSOLIDATED FINANCIAL RESULTS
For the first half of the fiscal period ending March 31, 2022
(Prepared under Japan GAAP, unaudited)

Company name:OSAKA SODA CO., LTD.

Stock Exchange Listing:Tokyo

Securities code:

4046

URL: http://www.osaka-soda.co.jp

Representative:

Kenshi Terada, Representative Director, President & Chief Executive Officer

For inquiry:

Toru Imamura, General Manager, Administration Division(Telephone: +81-6-6110-1560)

Scheduled date of filing of quarterly securities report:

November 8, 2021

Scheduled date of commencement of dividend payment:

December 3, 2021

Supplementary materials prepared for the financial results:

Yes

Quarterly financial results briefings:

Yes (for institutional investors and investment analysts)

1. Consolidated Financial Results(Amounts are rounded down to the nearest million yen)

(1) Results of Operations
Six Months Ended
September 30, 2021

September 30, 2020

Change *Change *Net sales

Millions of yen

42,157-%45,178(14.8)%

Operating income

Millions of yen

5,694

62.8%

3,497

(29.4)%

Ordinary income

Millions of yen

6,158

66.5%

3,698

(28.7)%Net income

Millions of yen

4,421

78.7%

2,474

(22.5)%

Comprehensive income

Millions of yen

3,997(0.7)%

4,023

51.2%

Net income per share

Yen

189.55-104.60-

Diluted net income per shareYen

170.28

-

93.09

-

Note: Osaka Soda Group has adopted “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29) fromthe beginning of quarterly period ended June 30, 2021. The figures for the six months ended September 30, 2021
reflect this change of accounting standard and year-on-year percent changes for six months are not available.

(2)Financial Condition
September 30, 2021

March 31, 2021

Total assets

Millions of yen

126,302

119,373

Net assets

Millions of yen

80,485

77,232EquityMillions of yen

80,477

77,224

%

63.7

64.7

Equity ratio

12. Dividends
Year ending Mar. 31, 2022
(Forecast)Year ending Mar. 31, 2022

Year ended Mar. 31, 2021

－

－

35.00

32.50

End of first quarterEnd of second quarterEnd of third quarter－－End of fourth quarter

35.00

32.50

Full year

70.00

65.00

Note: Changes from the most recently published forecast of dividends: No

3. Earnings Forecast for the fiscal year ending March 31, 2022
Full-year
Change*Net sales

Millions of yen

82,000-%Operating income

Millions of yen

10,70028.3%

Ordinary income

Millions of yen

11,40029.0%

Net income

Millions of yen

8,000

32.2%

Yen

342.95-

Earnings per share

Note 1: Changes from the most recently published forecast of financial results: No
Note 2: Osaka Soda Group has adopted “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29) fromthe beginning of fiscal year ending March 31, 2022. The earnings forecast for the fiscal year ending March 31,
2022 reflect this change of accounting standard and year-on-year percent changes are not available.

* Notes(1)

Changes in significant subsidiaries during the current quarterly period(Changes in specified subsidiaries resulting in the change in scope of consolidation):(2)

Application of accounting methods used specifically for the preparation of quarterly
consolidated financial statements:

(3)

(4)

None

None

Changes in accounting policies, accounting estimates and restatements of revisions
1) Changes in accounting policies due to revisions of accounting standards, etc.:

Yes2) Changes in accounting policies other than 1):

None3) Changes in accounting estimates:

None4) Restatement of revisions:

None

Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of September 30, 2021:

26,732,017

shares

As of March 31, 2021:

26,731,415

shares

As of September 30, 2021:

3,400,017

shares

As of March 31, 2021:

3,404,604

shares2) Number of treasury shares at the end of period23) Average number of shares outstanding in each period
Six months ended September 30, 2021

23,328,288

sharesSix months ended September 30, 2020

23,655,604

shares* Review procedures
The financial results are not subject to the review procedures performed by certified public accountants
or an audit firm.

* Earnings forecasts and other notes
This material contains forward-looking statements such as earnings forecast about OSAKA SODA CO.,LTD. and its group companies (“Osaka Soda Group”). These forward-looking statements are based on
the current assumptions and beliefs of Osaka Soda Group in light of the information currently available
to it, and contain known and unknown risks, uncertainties and other factors. Osaka Soda Group
therefore wishes to caution readers that actual results could be materially different from any future
results.

DISCLAIMER:

This is an English translation of the original Japanese document and is prepared for reference. Should there
be any inconsistency between the translation and the Japanese original, the latter shall prevail. Thistranslation is subject to change without notice. Osaka Soda Group shall individually or jointly accept no
responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or changes
with regard to this translation.

34. Qualitative Information(1) Results of Operations
During the six months ended September 30, 2021, the Japanese economy is still in a severe situation due tothe novel coronavirus, but it is showing movements of picking up. The economic outlook remains uncertain,
although the economy is expected to move toward recovery, supported by the effects of the policies andimprovement in overseas economies while taking thorough measures against infectious diseases, andaccelerating vaccinations.
Under the circumstances, Osaka Soda Group launched the Medium-Term Management Plan “Empower the
Next - 22”, and implemented concrete measures based on four basic policies, “Building a resilient businessfoundation”, “Promotion of market-in-type development”, “Efforts to achieve the SDGs”, and “Reforming
corporate culture and organizational culture”.
With regarding to ”Building a resilient business foundation”, the following business domains such as Chemicals
business, Functional Materials business , and Healthcare business will be positioned as core businesses andresilient strategy is pursued. Functional Materials business responded to growing global demand in Allyl Etherswith expansion of the supply system and improvement of productivity. Health Care business continued to growat a strong pace due to the increase of customer acceptance for new grades in Chromatography and to theincrease of new orders for Pharmaceutical API and Intermediates. Pursuing cost reduction at production sites
is connected to contribution to earnings constantly.
As a result, net sales were ¥42,157 million, a decrease of 6.7% compared to the same period of fiscal 2020.
Net sales declined 12,266 million yen caused by the adoption of revenue recognition standard, but the reality
is that net sales increased. Operating income was ¥5,694 million, an increase of 62.8% compared to the same
period of fiscal 2020. Ordinary income was ¥6,158 million, an increase of 66.5% compared to the same periodof fiscal 2020. Net income attributable to owners of parent was ¥4,421 million, an increase of 78.7% comparedto the same period of fiscal 2020. All incomes during the six months ended September 30, 2021 reached record
highs.
The following is a summary of reporting segments.
Basic Chemical Products
In Chlor-Alkali, net sales increased due to the demand recovery out of coronavirus collapse, especially incaustic soda and caustic potash.
In Epichlorohydrin, net sales increased due to the demand recovery mainly in electrical materials and pricepass on measures to cope with the rise in raw materials.
As a result, Basic Chemical Products reported net sales of ¥17,544 million, down 11.9% compared to the same
period of fiscal 2020, due to the adoption of Accounting Standard for Revenue Recognition.
Functional Chemical Products
In Synthetic Rubber related products, Epichlorohydrin Rubber, net sales increased due to the recoveryof global demand for automobiles and office automation. Acrylic Rubber, net sales increased due to an
expansion of customer acceptance in domestic and overseas, especially in
In Diallyl Phthalate Resin, net sales increased due to the growth of electric materials caused by domestic
demand for nesting and the constant growth in exported sales to Asian countries including China and theUnited States.
In Allyl Ethers, net sales increased due to vigorous demand in silane coupling agents in domestic and China.
In Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography), net sales increased
due to demand expansion for diabetes drug use to Europe, the United States and Asian countries.

4

In Active Pharmaceutical Ingredients (API) and their Intermediates, net sales increased due to sales
expansion of anti-cancer drug substance and intermediate, blood flow improver intermediate, and insomnia
treatment intermediates.
As a result, Functional Chemical Products reported net sales of ¥21,800 million, up 17.0% compared to thesame period of fiscal 2020.
Housing Facilities and Others
Net sales were ¥2,812 million, down 57.5% compared to the same period of fiscal 2020, due to the adoptionof Accounting Standard for Revenue Recognition.
(2) Financial Condition
AssetsCurrent assets were ¥79,096 million, an increase of 7.1% since March 31, 2021. The increase was due
primarily to an increase of ¥4,258 million in cash and deposits, an increase of ¥802 million in merchandise andfinished goods.
Noncurrent assets were ¥47,206 million, an increase of 3.8% since March 31, 2021. The increase was due
primarily to an increase of ¥2,174 million in property, plant, and equipment.
As a result, Total assets were ¥126,302 million as of September 30, 2021, an increase of 5.8% since March
31, 2020.
Liabilities
Current liabilities were ¥39,610 million, an increase of 47.7% since March 31, 2021. The decrease was due
primarily to an increase of ¥8,735 million in current portion of bonds with subscription rights to shares and anincrease of ¥10,890 million in notes and accounts payable-trade respectively.
Noncurrent liabilities were ¥6,207 million, a decrease of 59.5% since March 31, 2021. The decrease wasdue primarily to a decrease of ¥8,737 million in bonds with subscription rights to shares.
As a result, Total liabilities were ¥45,817 million as of September 30, 2021, an increase of 8.7% since March
31, 2021.
Net assets
Net assets were ¥80,485 million as of September 30, 2021, an increase of 4.2% since March 31, 2021.
(3) Cash Flows
As of September 30, 2021, cash and cash equivalents were ¥36,194 million, an increase of ¥4,258 million
since March 31, 2021.
Cash flows from operating activities
Net cash provided by operating activities totaled ¥7,277 million, due primarily to ¥6,398 million in income
before income taxes, ¥1,928 million in depreciation, and a decrease of ¥1,291 million in income tax paid.
Cash flows from investing activities
Net cash used in investing activities totaled ¥2,322 million, due primarily to purchase of ¥1,977 million forpurchase of property, plant, and equipment.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥795 million, due primarily to payment of ¥758 million in
cash dividends.
(4) Annual Earnings Forecasts
There are no revisions to the earnings forecast from the previous forecast announced in the “Consolidated
financial results for the year ended March 31, 2022” dated on October 19, 2021.

5

5.

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Notes & accounts receivable-trade and contract assets
Electrically recorded monetary claims
Short term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Less: Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant, and equipment
Property, plant, and equipment – Net
Other – Net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Less: Allowance for doubtful accounts
Total investment and other assets
Total noncurrent assets
Total assets

6

March 31,2021

September 30,
2021

17,436
26,6553,456
14,499
6,581
1,661
2,219
1,435
(69)
73,876

21,69426,062
3,553
14,499
7,383
2,071
2,397
1,503
(69)
79,096

8,920
11,616
20,536

9,227
13,48322,710

498
283
782

407
283
690

22,965325893(6)24,17845,496
119,373

22,680318811(5)23,80447,206
126,302CONSOLIDATED BALANCE SHEETS (Continued)(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable- trade
Short term loans payable
Income taxes payable
Provision for bonuses
Current portion of bonds with subscription rights to shares

Other current liabilities
Total current liabilities
Noncurrent liabilities
Bonds with subscription rights to shares
Deferred tax liability
Net defined benefit liability
Other noncurrent liabilities
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total net assets and liabilities

7

March 31,2021

September 30,
2021

13,046
7,172
1,492
884
4,223
26,81814,136
7,172
2,215
917
8,735
6,434
39,610

8,737
2,463
2,705
1,415
15,322
42,141

2,083
2,719
1,404
6,207
45,817

15,87014,38846,387(7,669)68,977

15,871
14,39050,051(7,659)72,654

8,292
48
(13)
(80)
8,247
7
77,232
119,373

7,766
18
105
(67)
7,822
8
80,485
126,302CONSOLIDATED STATEMENTS OF INCOME(Millions of yen)
Six Months Ended
September 30,
September 30,
2020
2021
45,17842,15735,48329,829
9,695
12,327

Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Share of profit of entities accounted for using equity
methodInsurance claim income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange loss
Other
Total non-operating expenses
Ordinary income

6,197
3,497

6,633
5,694

7
275
-

6
274
27
25

0
48
333

136
58
528

43
15

46
-

63
10
132
3,698

17
64
6,158

Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Total extraordinary loss
Income before income taxes

-

304
304

92
92
3,606

64
64
6,398

Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests

1,025
107
1,132
2,474
(0)

2,105
(128)
1,976
4,421
(0)

Net income attributable to owners of parent

2,474

4,421

8

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Millions of yen)

Net income
Other comprehensive income
Unrealized gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Re-measurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Minority interests

9

Six Months Ended
September 30,
September 30,
2020
2021
2,474
4,421
1,563
(8)
(22)
19
(3)

(526)
(30)
106
13
12

1,549
4,023

(424)
3,997

4,023
(0)

3,997
0

CONSOLIDATED STATEMENTS OF CHASH FLOWS(Millions of yen)

Six Months Ended
September 30,
September 30,
2020
2021
Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss on retirement of non-current assets
Loss (gain) on sales of short-term and long-term investment
securities
Share of loss (profit) of entities accounted for using equity
methodInsurance claim income
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in notes and accounts receivable-tradeand contract assets
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Proceeds from insurance income
Income taxes paid
Net cash provided by (used in) operating activities

10

3,606
1,849
91
(0)
(15)
(266)

6,398
1,918
91
(1)
32
-

(13)
(283)
43
18
92
-

14
(280)
46
(12)
64
(304)

15

(25)

(0)
3,969
-

(136)
575

(562)
(1,763)
731
7,511
293
(43)
0
(1,122)
6,638(1,381)
992
195
8,198
280
(46)
136
(1,291)
7,277

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen)

Six Months Ended
September 30,
September 30,
2020
2021
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from redemption of securities
Purchase of investment securities
Proceeds from sales and redemption of investment
securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Redemption of bonds
Purchase of treasury shares

Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11

(491)
(51)
500
(8)
-

(1,977)
(57)
(456)
331

(85)
(136)

(162)
(2,322)(595)(1,263)
(677)
(771)
(34)
(3,341)
(44)

(1)
(758)
(36)
(795)
98

3,116
28,89932,015

4,258
31,93636,194

6. Notes to the Consolidated Financial Statements(1) Notes regarding the going concern assumption:

None

(2)

Notes on significant changes in shareholders’ equity:

None

(3)

Changes in accounting policies(Adoption of the Accounting Standard for Revenue Recognition)
Osaka Soda Group has adopted “Accounting Standard for Revenue Recognition” (ASBJ Statement
No.29, March 31, 2020) and related implementation guidance from the beginning of the fiscal year
ending March 31, 2022, and recognize revenue at the amount expected to be received in exchange forits goods or services when the dominance of the promised goods or services is transferred tocustomers. Among contracts applying the completed-contract method, those with performancerequirements met over a period of time will change to a recognition method which estimates the degreeof progression said performance fulfillment and determines revenue based on this progression, except
for those for which this period of time is extremely short. In addition, estimating the degree of progresson fulfillment of performance requirements will use an input method based on the ratio of cost accrued
to total estimated cost. Regarding the revenue in which we act as an agent in providing the products orservices to customers, we have previously recognized the gross amount of consideration to be received
from customers as revenue. We have now changed to a method to recognize revenue at the net
amount after deducting the amount to be paid to suppliers from the amount to be received from
customers.
Regarding to the adoption of the revenue recognition standards, in accordance with the transitional
treatment stipulated in the provision to paragraph 84 of the Accounting Standard for Revenue
Recognition, the cumulative effect of retroactively adopting the new accounting policy prior to thebeginning of the fiscal year ending March 31, 2022, has been added to or deducted from retained
earnings at the beginning of the fiscal year ending March 31, 2022 and the new accounting policy has
been adopted from the beginning balance of the fiscal year ending March 31, 2022.
As a result, net sales and cost of sales decreased 12,266 million yen respectively for the quarterly
period ended June 30, 2021. Nothing has changed in operating income, ordinary income, net income
before income taxes.
Due to the application of these accounting standards, “Notes and accounts receivable-trade” in“Current Assets” in the consolidated balance sheets have been reclassified as “Notes and accounts
receivable-trade, and contract assets” from the first quarter of the fiscal year ending March 31, 2022.
Based on the transitional treatment stipulated in Article 89-2 of the “Accounting Standard for Revenue
Recognition” comparative information for the previous fiscal year has not been restated to reflect the
new method of presentation.In accordance with the transitional treatment provided for in Paragraph 2815 of the “Accounting Standard for Quarterly Financial Reporting” (ASBJ Statement No. 12, March 31,2020), information on disaggregate revenue from contracts with customers for the six months ended
September 30, 2020 is not presented(Application of Accounting Standard for Fair Value Measurement)
Osaka Soda Group has adopted “Accounting Standard for Fair Value Measurement” (ASBJ Statement
No.30, July 4, 2019) and related implementation guidance from the beginning of the quarterly period
ended June 30, 2021. Based on the transitional treatment prescribed in Paragraph 19 of the AccountingStandard for Fair Value Measurement and Paragraph 44-2 of the “Accounting Standard for Financial
12

Instruments” (ASBJ Statement No.10, July 4, 2019), we have decided to apply the new accounting
policies set forth by the Accounting Standard for Fair Value Measurement into the future. Thesechanges had no impact on the quarterly consolidated financial statements.

(4) Segment information
Six months ended September 30, 2020

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

Products

Products

and Others

Total

Adjustments *1

operatingincome *2

Net sales
External sales

19,925

18,634

6,618

45,178－45,178

14

72

155

242

(242)

－

19,94018,706

6,774

45,420(242)

45,178

1,683

2,317

110

4,111

(613)

3,497

Intersegment sales
or reclassifications
Total
Segment income

Notes 1:

Adjustments of segment income of ¥(613) million are corporate expenses not allocated toreportable segments. Corporate expenses are mainly expenses not attributable to a reporting
segment and related to fundamental research and development as well as administrative
departments.

Notes 2:

Segment income has been adjusted for the operating income appearing in the quarterly
consolidated statements of income.

Six months ended September 30, 2021

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

Products

Products

and Others

Total

Adjustments *1

operatingincome *2

Net salesJapan

14,862

10,3592,796

28,018-28,018

Asia

1,893

8,004

15

9,913

-

9,913

Europe

341

2,690

-

3,031

-

3,031

Others

447

746

-

1,193

-

1,193

17,54421,8002,812

42,157-42,157

Other revenue

-

-

-

-

-

-

External sales

17,54421,8002,812

42,157-42,157

11

338

1,453

1,804

(1,804)-

17,555

22,1394,266

43,961(1,804)42,157

1,930

4,226

99

6,256

(562)

5,694

Revenue fromcontracts withcustomers

Intersegment sales
or reclassifications
Total
Segment income

Notes 1:

Adjustments of segment income of ¥(562) million are corporate expenses not allocated toreportable segments. Corporate expenses are mainly expenses not attributable to a reporting
segment and related to fundamental research and development as well as administrative
departments.

13

Notes 2:

Segment income has been adjusted for the operating income appearing in the quarterly
consolidated statements of income.

14