Consolidated Financial Results for the Six Months Ended September 30, 2021
(JPGAAP)
November 11, 2021
Stock Exchange: Tokyo
Name of listed company: Nissan Chemical Corporation
URL: https://www.nissanchem.co.jp/
Code number: 4021
Representative: YAGI Shinsuke, President
Inquiry to: DAIMON Hideki, Executive Officer and Head of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled submission date of quarterly report: November 12, 2021
䚷䚷䚷䚷䚷 Scheduled dividend payment date: December 6, 2021
Supplemental information: Yes
Financial results meeting : Yes (For institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months Ended September 30, 2021 (From April 1, 2021 to September 30, 2021)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Six months ended September 30, 2021
Six months ended September 30, 2020
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

91,807(2.8)

21,32418.6

22,26322.5

16,291

17.2

94,494(2.0)

17,980(0.3)

18,173(2.5)

13,896(4.3)

Six months ended September 30, 2021

: 13,772 million yen ,(16.2%)

Six months ended September 30, 2020

: 16,436 million yen ,48.7%

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Six months ended September 30, 2021

113.94

㸫

Six months ended September 30, 2020

95.96

㸫

(2) Consolidated Financial Position
Net assets

Total assets

Equity ratio

Million yen

Million yen%

As of September 30, 2021

247,426

197,404

79.1

As of March 31, 2021

265,509200,562

74.9(Reference) Shareholders' equity:

As of September 30, 2021

: 195,621 million yen

As of March 31, 2021

: 198,828 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

SecondquarterYen

Thirdquarter

Yen

Year ended March 31, 2021

䠉

46.00

Year ending March 31, 2022

䠉

50.00

Year ending March 31, 2022
(Outlook)Year-end

Yen

Annual

Yen

Yen

㸫

58.00

104.00㸫

64.00

114.00(Note) Revision of the latest released dividend outlook: Yes
Please refer to " Revision of Financial Results Outlook, Interim Dividend Payment and Dividend Outlook" for details.

3. Outlook of Consolidated Financial Results for the Fiscal Year Ending March 31, 2022 (From April 1, 2021 to March 31, 2022)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet salesYear ending March 31, 2022

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

205,500(1.7)

47,40011.4

48,80011.2

36,4008.8

255.10(Note) Revision of the latest released outlook of financial results: Yes(Note) The Company determined to apply "Accounting Standard for Revenue Recognition" (ASJB Statement No. 29) from FY 2021.
㻌㻌As a result, the above earnings outlook is the amount after applying the relevant accounting standards.
Please refer to " Revision of Financial Results Outlook, Interim Dividend Payment and Dividend Outlook" for details.

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation)(2) Application of special accounting treatment to preparation of quarterly financial statements: None: None(3) Changes of accounting policies and accounting estimates, and restatement
1. Changes of accounting policies due to revisions of accounting standards: Yes

2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(Note) Please refer to [2. Consolidated Financial Statements䚷(4) Notes to Consolidated Financial Statements"(Changes in Accounting Policies)"]䚷on page 10 for further details.
(4) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
As of September 30, 2021

: 143,000,000 shares

As of March 31, 2021

: 145,000,000 shares

2. Number of treasury shares
As of September 30, 2021

: 612,029 shares

As of March 31, 2021

: 1,351,888 shares

3. Average number of shares outstanding
As of September 30, 2021

: 142,982,238 shares

As of September 30, 2020

: 144,827,351 shares(Note) The Company has introduced “Board Benefit Trust (BBT)” based on the resolution of Board of Directors' meeting held on
July 30,2019.The shares held by the Trust are included in the number of treasury shares at the end of the period, and they
are included in the number of treasury shares deducted in calculating the average number of shares outstanding over theperiod. The number of shares held by the Trust (included in treasury shares) at the end of the period was 164,000 shares.
In addition, the average number of shares held by the Trust during the period was 164,550 shares.
This is not included in the average number of shares outstanding.
* Presentation regarding implementation status of quarterly review procedures
The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business outlook and other special notes
The business outlook contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the outlook due to various factors.
For supplemental information, please refer to our website.
The transcript of financial results briefing will be released on our website as well.

Table of Contents for Attached Materials
1. Qualitative Information on Quarterly Results(1) Business Performance(2) Financial Position........................................................................................................ 2.............................................................................................................................. 2..................................................................................................................................... 3(3) Outlook of Consolidated Financial Results and Other Forward-looking Information .................................................... 4(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements......................................................................................................... 4................................................................................................................... 5(1) Consolidated Balance Sheets ...................................................................................................................... 5(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income ......................................... 7(3) Consolidated Statements of Cash Flows........................................................................................................ 9(4) Notes to Consolidated Financial Statements..................................................................................................10(Notes on Assumption of Going Concern).................................................................................................10(Notes on Significant Changes in Shareholders' Equity)................................................................................10(Changes in Accounting Policies) ............................................................................................................10(Segment Information).........................................................................................................................111

1Qualitative Information on Quarterly Results(1) Business Performance
During the second quarter of the current fiscal year (April 1, 2021 to September 30, 2021), the domestic economy failed to achieve a fullfledged recovery due to sluggish personal consumption, which had shown signs of recovery due to the recurrence and extension of thedeclaration of emergency situations. Export demand making a firm start got dull due to Chinese economic slowdown, which also affected
delayed economic recovery. Under these circumstances, sales of Basic Chemicals and Fine Chemicals increased in the Chemicals Segment.
In the Performance Materials Segment, Display Materials, Semiconductor Materials and Inorganic materials performed well. In the Agricultural
Chemicals Segment, although shipments remained at the same level as the previous year, sales decreased due to the adoption of the“Accounting Standards for Revenue Recognition.” In the Pharmaceuticals Segment, although sales of drug discovery decreased, sales of"Custom Chemicals" (custom manufacturing and process researching services for pharmaceutical companies) increased.
As a result, business performances for this period were as follows. Sales were below the same period of previous fiscal year, however
operating income, ordinary income, and net income attributable to owners of parent achieved record highs and exceeded the outlook
announced in May.


2Q FY2020(Million yen, amount rounded down to the nearest million yen)
2Q FY2021
Change from2Q FY2021
Change(Outlook)
Outlook

Sales

94,49491,807(2,686)76,500+15,307

Operating income

17,98021,324+3,343

17,700+3,624

Ordinary income

18,173

22,263+4,08918,000+4,263

Net income attributableto owners of parent

13,896

16,291+2,39414,000+2,291The Company adopted "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, revised on March 31, 2020)and other standards from the first quarter of the fiscal year ending March 31, 2022. For supplemental information, please refer to[2.Consolidated Financial Statement (4) Notes to Consolidated Financial Statements “(Changes in Accounting Policies)”] on page
10.
Explanations by segments are as below.
The Chemicals Segment
In Basic Chemicals, sales of melamine (adhesives agent for particle board) and high purity sulfuric acid (agent used for cleaning
semiconductor) increased. In Fine Chemicals, sales of “TEPIC” (powder coating agent for paint, sealants, etc.) and cyanuric acid (rawmaterial for sterilizing and disinfecting agents) of environmental chemicals also performed well.
As a result, sales of this segment were 17,085 million yen (an increase of 2,373 million yen) and operating income was 1,172 million
yen (an increase of 1,311 million yen). Compared to the outlook (Note), sales were above 0.4 billion yen and operating income wasabove 0.2 billion yen.
(Note) The outlook is described on page 19 and 20 of the FY2021 Presentation Materials. (announced on May 14, 2021)
The Performance Materials Segment
In Display Materials, sales of "SUNEVER" (LCD alignment coating) for tablets and notebook PCs performed well. In Semiconductor Materials,
sales of anti-reflective coating for semiconductors (ARC®*) and multilayer materials (OptiStack®*) increased, reflecting favorable operation bycustomers. In Inorganic materials, sales of "SNOWTEX" for polishing electronic materials and hard coating, and Organo / Monomer sol (various
kinds of coating materials, resin additive) were steady. Sales of Oilfield materials (for enhancing oil recovery) increased.
As a result, sales of this segment were 39,555 million yen (an increase of 4,962 million yen) and operating income was 13,178 million yen (anincrease of 2,444 million). Compared to the outlook (Note), sales were above 2.4 billion yen and operating income was above 1.6 billion yen.
(Note) The outlook is described on page 19 and 20 of the FY2021 Presentation Materials. (announced on May 14, 2021)
 * ARC®, OptiStack® are registered trademarks of Brewer Science, Inc.

2

The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) declined due to a decrease in shipments caused by the impact ofcustomer inventories and other factors, although royalty income was strong. In the domestic segment, sales of "ROUNDUP" (non-selective
leaf treatment herbicide) were firm, and “DITHANE” (fungicide), which was acquired in the third quarter of FY2020, contributed to sales. On theother hand, shipments of "ALTAIR" (paddy rice herbicide) and "GRACIA" (insecticide) declined. In the overseas segment, sales of "GRACIA"
decreased, but sales of "TARGA" (herbicide), “SANMITE” (insecticide and acaricide) and "QUINTEC" (fungicide) performed well. In addition,
sales and operating income decreased due to adoption of the “Accounting Standards for Revenue Recognition.”
As a result, sales of this segment were 24,950 million yen (a decrease of 795 million yen) and operating income was 6,991 million yen (adecrease of 803 million yen). Compared to the outlook (Note), sales were above 0.2 billion yen and operating income was above 1.2 billion
yen.
(Note) The outlook is described on page 19 and 20 of the FY2021 Presentation Materials. (announced on May 14, 2021)
The Pharmaceuticals Segment
Sales of "LIVALO" (anti-cholesterol drug) increased in Japan, but decreased overseas due to the impact of increased sales of genericdrugs. In “Custom Chemicals”, sales of active pharmaceutical ingredients (generic) increased.
As a result, sales of this segment were 3,340 million yen (an increase of 314 million yen) and operating income was 451 million yen(an increase of 425 million yen). Compared to the outlook (Note), sales were above 0.4 billion yen and operating income was above
0.3 billion yen.
(Note) The outlook is described on page 19 and 20 of the FY2021 Presentation Materials. (announced on May 14, 2021)
Trading
Sales of this segment were 36,441 million yen (an increase of 2,704 million yen) and operating income was 1,255 million yen (anincrease of 13 million yen). Compared to the outlook (Note), sales were above 2.9 billion yen and operating income was above 0.2
billion yen.
(Note) The outlook is described on page 19 and 20 of the FY2021 Presentation Materials. (announced on May 14, 2021)
OthersSales of this segment were 10,373 million yen (an increase of 960 million yen) and operating loss was 3 million yen (a decrease in profit of 49
million yen).

(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of September 30, 2021 was 247,426 million yen (a decrease of 18,082 million yen from March 31, 2021). It is mainly due tothe decrease of notes and accounts receivable - trade.
Also, total liabilities as of September 30, 2021 was 50,022 million yen (a decrease of 14,924 million yen). It is mainly due to the decrease of
short-term loans payable.
Net assets as of September 30, 2021 was 197,404 million yen (a decrease of 3,158 million yen).
As a result of these factors, equity ratio was 79.1% (an increase of 4.2% from March 31, 2021).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation and gain and loss on working
capital, net cash provided by operating activities for the six months ended September 30, 2021 was 33,765 million yen (33,629 million yen forthe same period of the previous year).
Due to the investment on plant and equipment, net cash used in investing activities for the six months ended September 30, 2021 was
6,091 million yen (2,585 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing activities for the six months
ended September 30, 2021 was 31,560 million yen (32,770 million yen).

3As a result of these factors, cash and cash equivalents at the end of this period was 28,371 million yen, reflecting exchange of 121 million
yen. It decreased by 4,008 million yen from March 31, 2021 (28,897 million yen).

(3) Outlook of Consolidated Financial Results and Other Forward-looking Information
Outlook for the year ending March 31, 2022 was revised as follows based on the cumulative second quarter and demand outlook.
For the exchange rate of the third quarter and beyond, it is assumed that 1 U.S. dollar is 107 yen.
Revision of consolidated financial results’ outlook for the year ending March 31, 2022 (April 1, 2021 to March 31, 2022)(Billion yen, amounts rounded to the nearest billion yen)Previous
outlook(A)Increase or
decrease(B-A)

Revisedoutlook(B)Rate of change(%)(Reference)
Results for theprevious fiscal year

Net sales

172.5

205.5

+33.0

+19.1%

209.1

Operating income

43.6

47.4

+3.8

+8.7%

 42.5

Ordinary income



44.9

48.8

+3.9

+8.7%

43.9

Net income attributable toowners of parent



34.1

36.4

+2.3

+6.7%

 33.5239.18 yen

255.10 yen+15.92 yen+6.7%

231.73 yen

Basic earnings per share

Revision of consolidated net sales and operating income outlook for the year ending March 31, 2022
(Billion yen, amounts rounded to the nearest billion yen)
 Net sales
Previous Operating income
Revised

Previous

RevisedChemicals

34.6

36.4

2.4

2.9

Performance Materials

75.8

80.9

23.8

26.3

Agricultural Chemicals

66.2

65.8

17.6

18.2

Pharmaceuticals

6.1

6.3

0.3

0.5

Trading

70.1

75.1

2.2

2.3

Others

23.4

23.5

0.7

0.6

Adjustment(103.7)(82.5)

(3.4)

(3.4)

Total

172.5

205.5

43.6

47.4

(4) Basic Policy on Distribution of Earnings
The Company’s basic policy of profit allocation is returning to shareholders by improving company value through increasing revenue in themedium and long terms.
In medium-term business plan “Vista2021” Stage II launched from April 2019, the company aims to realize dividend payout ratio to be 45%
and total payout ratio to be 75% after FY2019.

4

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million yen)
As ofMarch 31, 2021

As of
September 30, 2021

AssetsCurrent assets
Cash and deposits

32,38028,371

Notes and accounts receivable - trade73,93755,787

Merchandise and finished goods

33,77437,17023

164

Raw materials and supplies

12,853

14,676

Other

6,650

6,177

(31)

(34)

159,588

142,315

Buildings and structures, net

24,837

24,545

Other, net

27,00026,424

Total property, plant and equipment

51,83750,969

548

682

Other

11,581

11,440Total intangible assets

12,12912,12335,89432,086

2

3,324

Other

6,167

6,718

Allowance for doubtful accounts

(110)

(110)

Total investments and other assets

41,95342,018105,921105,111

265,509247,426

Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
SoftwareInvestments and other assets
Investment securities
Long-term loans receivable

Total non-current assets
Total assets

5

(Million yen)
As ofMarch 31, 2021

As of
September 30, 2021

Liabilities
Current liabilities
Notes and accounts payable - trade16,29816,019

Short-term loans payable

21,4895,585

Income taxes payable

7,113

5,811

Provision for bonuses

2,250

2,244

7

-

Other

12,585

14,742

Total current liabilities

59,744

44,403

1,184

963

171

1,061

-

626

Provision for share-based remuneration for directors (and other

91

130

Net defined benefit liability

249

258

Other

3,506

2,579

Total non-current liabilities

5,202

5,619

64,94750,022

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

161,708

157,036

Treasury shares(7,340)(3,259)Total shareholders' equity

186,923

186,332

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable
Provision for business structure improvement
Provision for loss on business of subsidiaries and affiliates

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

11,3599,110

Foreign currency translation adjustment

81

(256)

Remeasurements of defined benefit plans

463

434

11,904

9,288

1,733

1,783

200,562

197,404

265,509247,426

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)
Six Months Ended
September 30, 2020

Six Months Ended
September 30, 2021

Net sales

94,49491,807

Cost of sales

54,764

46,275Gross profit

39,73045,532

Selling, general and administrative expenses

21,74924,208Operating income

17,98021,324Non-operating income
Interest income

715

Dividend income

336

301

Equity in earnings of affiliates

263

456

Other

343

583

Total non-operating income

951

1,356

Interest expenses

45

47

Loss on disposal of non-current assets

288

282

50

40

263

-

Non-operating expenses

Plant stop losses
Foreign exchange losses
Other

110

47

Total non- operating expenses

758

417

18,173

22,263

1,089

2,816

1,089

2,816

-

2,165

Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Business structure improvement expenses
Loss on business of subsidiaries and affiliates-

626

Total extraordinary losses

-

2,792

Income before income taxes and non-controlling interests

19,262

22,287

Income taxes - current

5,527

6,105

Income taxes - deferred

(173)

(247)

Total income taxes

5,354

5,858

Net income

13,90816,428Net income attributable to non-controlling interests
Net income attributable to owners of parent

7

11

137

13,896

16,291

- Consolidated Statements of Comprehensive Income(Million yen)

Net income

Six Months Ended
September 30, 2020

Six Months Ended
September 30, 2021

13,90816,4282,404(2,249)Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

119

(377)

Remeasurements of defined benefit plans, net of tax

3

(29)

Share of other comprehensive income of entities accounted forusing equity method

00Total other comprehensive income
Comprehensive income

2,527(2,656)

16,436

13,772

16,40913,67526

96(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)
Six Months Ended
September 30, 2020

Six Months Ended
September 30, 2021

Income before income taxes and non-controlling interests

19,262

22,287

Depreciation and amortization

4,763

4,622

Business structure improvement expenses

-

2,165

Loss on business of subsidiaries and affiliates

-

626

33

51

(343)

(317)

Cash flows from operating activities

Amortization of goodwill
Interest and dividend income
Loss (gain) on sales of investment securities(1,089)(2,816)

Interest expenses

45

47

Loss (gain) on disposal of non-current assets

288

282

Decrease (increase) in notes and accounts receivable - trade

23,482

18,052

Decrease (increase) in inventories(5,288)(5,603)

Increase (decrease) in notes and accounts payable - trade(2,929)

(256)

Other

1,116

1,124

Subtotal

39,34040,267

Interest and dividend income received

904

942

Interest expenses paid

(45)

(47)

Income taxes paid

(6,570)(7,396)

Net cash provided by (used in) operating activities

33,62933,765Purchase of investment securities

(106)

(118)

Proceeds from sales of investment securities

1,625

3,486

Purchase of shares of subsidiaries

(302)

(19)

(4,025)(5,252)

Payments for retirement of property, plant and equipment

(252)

(236)

Purchase of intangible assets

(249)

(779)

-

(3,322)

Net decrease (increase) in short-term loans receivable

742

62

Purchase of long-term prepaid expenses

(15)

(55)

Other

(0)

145

(2,585)(6,091)(18,458)(15,893)

(320)

(276)

(6,990)(8,341)

Cash flows from investing activities

Purchase of property, plant and equipment

Payments of long-term loans receivable

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Dividends paid to non-controlling interests
Share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

-

(48)

(7,000)(7,001)-

0(32,770)(31,560)

(14)

(121)

Net increase (decrease) in cash and cash equivalents(1,741)(4,008)Cash and cash equivalents at beginning of period

30,63932,380Cash and cash equivalents at end of period

28,89728,3719

(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company made a stock payment of 1,000 shares to the eligible party on April 23, 2021 based on the trust agreement of the Board
Benefit Trust (BBT) resolved by the Board of Director's meeting on July 30, 2019. In addition, the Company made a stock payment of 800 shares to the eligible
party on July 21, 2020. As a result, treasury shares decreased by 8 million yen during the second quarter of current consolidated fiscal year. Also, the Company
canceled 1,000,000 treasury shares on August 31, 2021 based on the resolution of Board of Directors' meeting held on August 24, 2021. As a result, retained
earnings and treasury shares decreased by 5,515 million yen during the second quarter of current consolidated fiscal year.
In addition, the Company repurchased 1,261,600 treasury shares based on the resolution of Board of Directors' meeting held on May 14, 2021.
As a result, treasury shares increased by 6,999 million yen during the second quarter of current consolidated fiscal year.
(Changes in Accounting Policies)(Application of "Accounting Standard for Revenue Recognition," etc.)
The Company adopted "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, revised on March 31, 2020) and other standards,
and applied accounting policy to recognize revenue with the amounts expected to be received in exchange for the promised goods or services as the controlof such goods or services are transferred to the customer at the beginning of the first quarter of FY 2021.
Major changes due to the adoption of Accounting Standard for Revenue Recognition are as follows:(1)Recognition of revenue related to agent transactions
For transactions where the Company ’ s role in providing the product to the customer is fulfilled by an agent, the method of revenue recognition
has been changed to one in which the net amount after the amount paid to the supplier is deducted from the amount received from the customer is recognized
as revenue.
(2)Variable consideration
For transactions which include variable consideration in consideration, the Company includes such variable consideration within the transaction priceto the extent that it is highly probable that a significant reversal of previously recognized cumulative revenue will not occur when the uncertainty issubsequently resolved.
(3)Granting of license
As revenue for granting license, income from licensing was previously recognized upon deposit. However, if the nature of the covenant to granta license of the customer is the right to access the intellectual property rights over the term of the license, revenue is recognized over a certain period of time,and if the right to use the intellectual property at the time the license is granted, revenue is recognized at one point.
The application of such changes in accounting policies follows the transitional treatment prescribed in the proviso of paragraph 84 of Accounting Standard
for Revenue Recognition, such that the new accounting policy was applied from the beginning balance of retained earnings of the first quarter of FY 2021
to add to or deducted from the amount of beginning balance of retained earnings of the first quarter of FY 2021 the cumulative effects of applying
retrospectively the new accounting policy from the first quarter of the fiscal year ending March 31, 2022. The method prescribed in paragraph 86 of
Accounting Standard for Revenue Recognition was applied, however, with no retrospective application of the new accounting policy to the contract which arethat almost all amounts of revenues have been recognized in accordance with the prior treatments before the beginning of the first quarter of FY 2021.
In addition, applying the method prescribed in the proviso (1) of paragraph 86 of Accounting Standard for Revenue Recognition, for the contracts
which have been modified before the beginning of the first quarter of FY 2021, the cumulative effect is added to or deducted from the beginning balance ofthe retained earnings of the first quarter of FY 2021, based on the terms of the contracts that have been reflected all modifications in the contracts.
As a result, in the second quarter of the fiscal year ending March 31, 2022, net sales decreased by 10,917 million yen, cost of sales decreased by
10,041 million yen while Operating income, Ordinary income and income before taxes and non-controlling interests increased 875 million yen.
Also, the balance of retained earnings at the beginning of fiscal year ending March 31, 2022 decreased by 1,548 million yen.
(Application of "Accounting Standard for Fair Value Measurement," etc.)
The company adopted "Accounting Standard for Fair Value Measurement"(ASBJ Statement No.30, July 4, 2019) and other standards from the firstquarter of the fiscal year ending March 31, 2022. Based on the transition treatment prescribed in Paragraph 19 of "Accounting Standard for Fair Value
Measurement" and Paragraph 44-2 of "Accounting Standard for Financial Instruments" (ASBJ Statement No.10, July 4 2019), we have decided to apply
the new accounting policies set forth by "Accounting Standard for Fair Value Measurement" into the future. These changes had no impact on
the quarterly consolidated financial statements.

10

(Segment Information)
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Six Months Ended September 30, 2020 (From April 1, 2020 to September 30, 2020)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading(Million yen)
Others

Total

Adjustments(1)

Consolidated
Total

Sales
Sales to outside customers

10,15730,34023,532

3,002

23,856

3,601

94,492

1

Intersegment Sales

4,553

4,252

2,213

22

9,879

5,810

26,733(26,733)-

14,711

34,59325,746

3,025

33,736

9,412

121,226(26,731)

94,494(139)

10,733

7,794

26

1,242

45

19,702(1,722)

17,980

Total
Segment Profit or Loss
(Operating Income or Loss)

94,494

Notes: (1) The (1,722) million yen adjustments in segment profit includes (73) million yen in intersegment eliminations, 1 million yen sales not allocated to any
reporting segments, and (1,650) million yen corporate expenses not allocated to any reportable segments.
The corporate expenses are mainly group administrative expenses which do not belong to segments.
(Million yen)

2) For the Six Months Ended September 30, 2021 (From April 1, 2021 to September 30, 2021)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustments(1)(2)

Consolidated
Total

Sales
Sales to outside customers

11,701

33,95722,8003,320

25,656

4,406

101,843(10,035)

Intersegment Sales

5,384

5,597

2,150

19

10,784

5,966

29,902(29,902)-

Total

17,08539,555

24,9503,340

36,441

10,373

131,746(39,938)

91,807

Segment Profit or Loss
(Operating Income or Loss)

1,172

13,178

6,991

451

1,255

(3)

23,045(1,721)

21,32491,807

Notes: (1) The (10,035) million yen adjustments in sales to outside customers includes (10,041) million yen elimination of agent transactions due to the adoptionof Accounting Standard for Revenue Recognition, and 6 million yen sales not allocated to any reporting segments.
(2) The (1,721) million yen adjustments in segment profit includes 7 million yen in intersegment eliminations, 6 million yen sales not allocated to any reporting
segments, and (1,734) million yen corporate expenses not allocated to any reportable segments. The corporate expenses are mainly group administrative
expenses which do not belong to segments.
2. Matters Related to Changes in Reportable Segments
As described in "Changes in accounting policies", the Company has adopted ”Accounting Standard for Revenue Recognition” and other standards from the
beginning of the first quarter of FY 2021.Accordingly, the accounting method for revenue recognition has been changed, and the method for calculating profit or loss
in our business segments has been changed as well.
As a result of this change, net sales and segment income in the "Agricultural Chemicals" segment for the first six months of the current fiscal year decreased by
875 million yen, compared with the previous method.

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