Financial Strategy
Basic Financial Strategy
Our basic financial strategy is to secure liquidity to support our diverse business portfolio and its growth strategy, and tomaintain a sound financial base. In addition, we will take a steady and flexible approach to financing, using cash on hand andoperating cash flow to fund investment in growth as a principle, and for funding needs that exceed this, we will procure stablemedium- to long-term funding from the financial and capital markets to avoid concentration of maturity dates and ensure that
we are able to take advantage of growth opportunities. Furthermore, as part of our liquidity management efforts, we plan tomaintain enough liquidity to cover unforeseen events, such as financial crises and major natural disasters, with respect to debt
maturing within one year.
Policy for Maintaining Financial Soundness

1

2

3

4

Strengthen financialbase and maintain rating(R&I A-)

Secure long-term stable
funding and maintain
access to financial andcapital markets

Maintain liquidity andreduce refinancing risk

Global capitalmanagement andoptimization ofcapital efficiency

Expanding on-hand liquidity

Savoie in 2020, we proactively used hybrid financing, which

To improve our resilience to uncertainties stemming fromfinancial soundness and boosted our creditworthiness

the COVID-19 pandemic, we keep a close eye on our cashby obtaining an equity classification from Rating andposition and the financial market environment, and ensure

Investment Information, Inc.

carries both equity and debt characteristics, and secured

sufficient liquidity by maintaining a high cash position. As weawait greater clarity in the market environment, we have been
expanding our on-hand liquidity (cash and deposits + shortterm liquidity), which has tripled in the last three years. In
addition, we have introduced the Global Cash Management

Aiming for a net debt-to-equity ratioof 0.0x

System (GCMS), our in-house banking function, to manage

Under our medium-term management plan, T-2023, we aim

the cash position of the entire Group, thereby optimizing

to generate a total of ¥150 billion in operating cash flow

cash efficiency and reducing financial costs.

over three years and improve capital efficiency through(billions of yen)

2017/122018/122019/122020/12

Short-term liquidity (unused)

24.0

34.0

42.0

78.0

Cash and deposits

22.2

46.8

52.7

67.2

On-hand liquidity ratio (times)

2.5

2.4

2.4

4.0

* On-hand liquidity ratio: Liquidity on hand (cash + deposits) / monthly sales (net sales /duration of consolidated accounting period in months)

sustained profit growth. At the same time, we will increase
our investment capacity for the future while securingliquidity on hand and reducing debt to achieve a net cash
position. In addition, we will work to generate more cash bystrengthening the profitability of our core businesses andfocusing on prudent cash management. As a result of these
efforts, we expect to lower our net debt-to-equity ratio from
0.2x to 0.0x.

Maintaining financial discipline withhybrid financing
We carried out M&A deals of about ¥180 billion in total overthe four-year period leading up to 2020. In particular, when
acquiring shares in Tokai COBEX in 2019 and Tokai COBEX

46

TOKAI CARBON INTEGRATED REPORT 2020

(billions of yen)
2017/122018/122019/12

(6.0)

2.9

70.3

56.5

Adjusted shareholders’ equity

126.4

187.1

236.8

236.3

Adjusted net debt-to-equity (times)(0.047)

0.016

0.297

0.239

Adjusted net interest-bearing debt

2020/12* Adjusted net debt-to-equity: Net debt-to-equity that takes into account the equity
classification of hybrid financing obtained from rating agencies.

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Financial Section & Corporate Data

Foundation that Supports Corporate Value

Capital investment plan
Under T-2023, we plan to invest a three-year total of ¥66 billion (¥65 billion for the three-year period through 2020), mainly forfacility upgrades, environmental equipment, and investment in growth. The breakdown is as follows.

Major capital investment plans
Estimatedinvestment(3-year total)

Equipment renewal
and maintenance¥29.0 billion

Overall optimization¥10.0 billion

Facility expansion¥6.0 billion

Environmental
investment¥16.0 billion

Other¥5.0 billion

Total¥66.0 billion

EstimatedamountBusiness2021(billions of yen)

2022

2023

Graphite Electrodes

8.0

Renewal investment (productivity improvements)

Carbon Black

7.0

Renewal investment (productivity improvements)

Fine Carbon

9.0

Major repairs

Smelting and Lining

5.0

Productivity improvements

Graphite Electrodes

7.0

Establish optimal production system for the Group

Smelting and Lining

3.0

Eliminating bottlenecks

Fine Carbon

5.0

Expansion of materials, CVD-SiC furnaces, and high purification furnaces

Industrial Furnaces, etc.

1.0

Facility enhancements

Graphite Electrodes

2.0

Continuous investment to reduce environmental impact

Carbon Black

10.0

North America and EPA compliance

Fine Carbon

2.0

Smelting and Lining

2.0

Installation of exhaust gas facilities, etc.

5.0

Development, software, etc.

—

South Korea, etc.

¥25.0 billion¥24.0 billion¥17.0 billion

Note: This investment plan does not include the capital investment plan associated with developing the Anode Materials business in Europe.

Stable and continuous shareholder returns
Our basic policy for shareholder returns is to pay stable

will be brought down to our target level of 30% fromand continuous dividends while targeting a payout ratio

2022 onward. In addition, we will flexibly carry out shareof 30%. Our forecast of annual dividend FY2021 is ¥30

repurchases as a part of our shareholder return policy,

per share, the same amount as FY2020. As we expect ataking into account the management environment,

full-fledged recovery in the global economy, along withfinancial environment, investment for growth, stock price,an increase in net income per share, our consolidated

and other factors in a comprehensive manner.

dividend payout ratio, which is temporarily high today,

Fiscal year

2015

2016

2017

2018

2019

2020

2021
(forecast)

Dividend per share (yen)

6

6

12

24

48

30

30

Dividend payout ratio

52%

—

21%

7%

32%

627%

71.2%

TOKAI CARBON INTEGRATED REPORT 202047

Long-Term Earnings Summary (2010–2020)(Millions of yen)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Net sales

107,679

104,924

98,704

100,935

114,576

104,864

88,580106,252

231,302

262,028

201,542

Gross profit

24,34823,95818,56015,267

18,651

19,96016,52927,451

99,37892,84049,555

Selling, generaland administrative
expenses

13,773

13,491

12,85913,611

14,947

15,871

15,39816,35826,31238,495

41,696

Operating income

10,575

10,467

5,700

1,655

3,703

4,088

1,131

11,09373,06554,344

7,858

Ordinary income

9,854

10,104

6,470

3,114

4,180

4,317

1,702

12,85572,991

52,986

6,262

Net income before
income taxes

9,211

9,336

3,992

2,926

4,345

6,726

(7,938)15,533

95,811

51,226

6,116

Income taxes

3,232

2,937

2,142

1,802

1,749

4,345

(67)

2,740

21,543

17,1752,283

Net income

5,630

6,119

1,993

1,213

2,562

2,484

(7,929)12,60374,26834,050

3,833

EBITDA

19,35718,92316,084

12,47013,845

14,581

10,616

17,74085,13077,05335,262Gross profit

22.6

22.8

18.8

15.1

16.3

19.0

18.7

25.8

43.0

35.4

24.6

Selling, generaland administrative
expenses

12.8

12.9

13.0

13.5

13.0

15.1

17.4

15.4

11.4

14.7

20.7

Operating income ROS

9.8

10.0

5.8

1.6

3.2

3.9

1.3

10.4

31.6

20.7

3.9

Ordinary income

9.2

9.6

6.6

3.1

3.6

4.1

1.9

12.1

31.6

20.2

3.1

Net Income before
income taxes

8.6

8.9

4.0

2.9

3.8

6.4

(9.0)

14.6

41.4

19.5

3.0

Net income

5.2

5.8

2.0

1.2

2.2

2.4

(9.0)

11.6

32.1

13.0

1.9

EBITDA

18.0

18.0

16.3

12.4

12.1

13.9

12.0

16.7

36.8

29.4

14.3

Capital expenditure

6,710

13,975

12,287

9,007

6,830

5,301

6,013

4,282

11,794

24,341

28,873

Depreciation

8,853

8,286

8,712

8,656

8,629

9,242

8,124

6,647

10,39018,503

20,890R&D expenses

2,012

1,956

1,961

1,800

1,882

1,822

2,249

1,482

1,883

2,460

2,682

Cash flow fromoperating activities

18,586

12,771

8,828

11,606

11,983

20,613

17,505

10,543

44,10941,66455,022

Cash flow investment
activities(6,088)(10,666)(12,770)(10,791)(24,027)3,189(3,622)(14,039)(53,849)(99,159)(44,301)

Free cash flows

12,4982,105(3,941)815(12,043)

23,802

13,883(3,496)(9,740)(57,495)

10,721

Cash flow fromfinancing activities(6,795)2,629(3,611)

1,441

9,728

(14,926)(7,613)(4,534)29,67764,568927

Increase (decrease)in cash and cash
equivalents

5,027

4,560

(6,674)

4,155(1,307)

8,180

5,602

(6,376)

18,9795,318

11,284

Exchange rate
(USD/JPY)

87.81

79.84

79.82

97.65

105.85121.05108.85112.19110.43109.05106.82

Consolidated
Statements of Income

Sales ratio (%)

Investment-related

Cash flow*Corporate exchange rate
*Figures have been revised retrospectively.

48

TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Financial Section & Corporate Data

Foundation that Supports Corporate Value(Millions of yen)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Total current assets

81,68488,42186,87990,984

94,68587,96877,64585,444

164,220

196,446

177,678

On-hand liquidity

12,076

16,572

11,891

16,04814,862

23,04528,52822,152

46,797

52,69567,174

Accounts receivables

31,49428,54328,25930,07533,972

26,897

24,22030,265

55,13750,64841,438Inventory

33,86837,97942,99341,507

41,29934,253

20,73427,56458,78986,38063,797

Other current assets

4,245

5,325

3,734

3,352

4,551

3,771

4,162

5,463

3,945

6,722

5,266

73,61973,142

79,78892,443

115,753

96,106

81,17899,286

165,648

266,425

282,03150,91655,166

58,16961,98567,581

56,62943,12251,40580,312

101,343

125,007

Intangible fixed
assets

490

382

438

464

14,103

11,324

10,534

16,34361,805

141,966

133,349

Investment andother assets

22,212

17,593

21,17929,99434,06928,15327,521

31,537

23,52923,11523,674

Total assets

155,304

161,563

166,668

183,427

210,439

184,074

158,824

184,730

329,868

462,872

459,709

Total current liabilities

28,62545,43938,05042,38544,897

31,12629,02836,87091,654

117,541

92,656

Short-term interestbearing liabilities

6,272

19,471

14,636

20,71821,576

9,537

12,91014,07441,70968,36351,878

Accounts payables

15,051

16,05916,145

14,17916,051

11,397

9,591

14,52226,001

28,936

18,647

Other current
liabilities

7,301

9,907

7,268

7,488

7,269

10,191

6,525

8,274

23,944

20,241

22,129Total long-term
liabilities

21,072

8,901

15,351

17,80933,19827,976

16,806

20,72830,381

112,355

142,237

Long-term interestbearing liabilities

12,162

1,747

6,191

5,044

16,713

14,398

4,137

2,068

8,000

79,666

106,764

Other long-term
liabilities

8,910

7,154

9,160

12,765

16,484

13,577

12,66918,66022,381

32,68935,473

Total liabilities

49,69854,34053,40160,19578,096

59,10345,83457,599122,035

229,896234,894

Total net assets

105,605

107,223

113,266

123,232

132,343

124,971

112,989

127,130

207,833

232,975

224,815

Shareholder’s capital 102,200

106,606

106,887

106,807108,006

108,910

99,693110,089

179,500

203,819

196,543

155,304

161,563

166,668

183,427

210,439

184,074

158,824

184,730

329,868

462,872

459,709

ROA

6.4

6.4

3.9

1.8

2.1

2.2

1.0

7.5

30.0

13.4

1.4

ROE

5.4

5.9

1.9

1.0

2.0

2.0

(6.8)

10.4

46.8

16.0

0.5

Capital-to-asset ratio

66.6

64.5

66.1

66.0

61.8

66.8

69.9

68.4

56.7

45.8

43.8

EPS (JPY)

26

29

9

6

12

12

(37)

58

344

150

45

BPS (JPY)

485

488

516

567

610

577

521

593

878

994

999

Dividend (JPY)

8

8

7

6

6

6

6

12

24

48

30

Dividend payout ratio (%)

31

28

75

106

50

52

—

21

7

32

627

Consolidated
Balance Sheet

Total fixed assets
Tangible fixed assets

Total liabilities andnet assets
Ratio analysis (%)

Indicator per share

TOKAI CARBON INTEGRATED REPORT 2020

49

Financial Statements
Consolidated Balance Sheets(Millions of yen)

FY2019FY2020AssetsCurrent assets

52,69567,174

Notes and accounts receivable* 50,648* 41,438

Merchandise and finished goods

20,227

14,890Work in progress

35,11630,638Raw materials and supplies

31,036

18,269

Other

6,971

5,490

Cash and cash equivalents

4

4

(248)

(224)

196,446

177,678

Buildings and structures, net

23,09225,150Machinery, equipment, and vehicles, net

42,13951,515

Furnaces, net

4,700

8,354

Land

7,315

7,604

Construction in progress

17,792

24,672

Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets

Other, net
Total tangible fixed assets

6,302

7,709

*1 101,343*1 125,007

Intangible fixed assets
Software

1,728

2,015

Goodwill

64,54360,316

Customer-related assets

67,49462,438

Other

8,200

8,579

141,966

133,349*2 18,842*2 17,492

Total intangible fixed assets
Investments and other assets
Investment securities

2,633

2,729

Deferred tax assets

997

2,611

Other

693

890

Allowance for doubtful accounts

(50)

(50)

23,11523,674266,425

282,031462,872

459,709

Net defined benefit asset

Total investments and other assets
Total fixed assets
Total assets*1 The cumulative amount of depreciation of tangible fixed assets is as follows.

50

FY2019FY2020¥ 253,854 million¥ 276,430 million

TOKAI CARBON INTEGRATED REPORT 2020

*2 Items associated with affiliates are as follows.

Investment securities (Shares)

FY2019FY2020¥ 791 million¥ 835 million

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Financial Section & Corporate Data

Foundation that Supports Corporate Value(Millions of yen)

FY2019FY2020*4 24,857*4 4,0783* 37,530
30,000
833
3,658
359
2,813
1,550
*4 11,859
117,541*4 15,500*4 3,147*3 3,065
40,000
8,813
3,094
289
2,880
1,754
*4 14,108
92,65635,00044,666
21,431
6,246
86
66
296
4,561
112,355
229,896

55,00051,764
21,409
7,544
82
73
431
5,932
142,237
234,894

20,436
17,333
173,310(7,260)203,819

20,436
17,338166,017(7,248)
196,543

8,415
34(1,671)
1,239
8,019
21,137
232,975
462,872

7,436(70)(3,529)887
4,723
23,548224,815459,709

Liabilities
Current liabilities
Notes and accounts payable
Electronically recorded obligations
Short-term borrowings
Commercial paper
Current portion of long-term debt
Income taxes payable
Consumption taxes payable
Accrued expenses
Reserve for bonuses
Other
Total current liabilities
Fixed liabilities
Corporate bonds
Long-term debt
Deferred tax liabilities
Net defined benefit liability
Reserve for directors’ retirement benefits
Reserve for executive officers’ retirement benefits
Provision for environment and safety measures
Other
Total fixed liabilities
Total liabilities
Net assets
Shareholders’ capital
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Total shareholders’ capital
Other accumulated comprehensive income
Net unrealized gains/losses on other securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Cumulative remeasurements of defined benefit plans
Total other accumulated comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets*3 Overdraft facility agreements and commitment line agreements
The Company has overdraft facility agreements and loan commitment contracts with nine financial institutions to facilitate the efficient procurement of working capital. At the endof the consolidated fiscal year, the balance of unexecuted loans under these agreements was as follows.

Total value of overdraft limits and loan commitment contracts

FY2019FY2020¥ 40,000 million¥ 62,000 million

Executed loans

16,0002,000

Unused balance

24,00060,000*4 Notes and electronically recorded obligations maturing at end of fiscal year
Notes and electronically recorded obligations maturing at the end of the fiscal year are accounted for as if they had been settled on their maturity dates.

TOKAI CARBON INTEGRATED REPORT 202051

Financial Statements

Consolidated Statement of Operations(Millions of yen)

FY2019FY2020262,028

201,542

Cost of sales*1, *4 169,188*1, *4 151,987

Gross profit

92,84049,555*2 10,418*2 9,852*3, *4 28,076*3, *4 31,843

38,495

41,69654,344

7,858Interest income

289

214

Dividend income

558

514

Equity in income of non-consolidated subsidiaries
and affiliates

123

124

Other

770

782

1,741

1,636

536

952

Net sales

Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating income
Non-operating income

Total non-operating income
Non-operating expenses
Interest expenses

344

282

Other

2,218

1,997

Total non-operating expenses

3,099

3,232

52,9866,262—*5 1,067* 56*6 76953—

Foreign exchange losses

Ordinary income
Extraordinary income
Insurance claim income
Gain on sales of fixed assets
Gain on termination of retirement benefit program

6

Gain on liquidation of subsidiaries and affiliates

23—

Total extraordinary income

133

1,836

Loss on disaster—*5 1,337

Impairment loss

*7 1,314*7 643

Loss on sales of fixed assets

8

* 3

*8 1

Loss on disposal of fixed assets

576—

Extraordinary losses

52

Total extraordinary losses

1,894

1,983

Net income before income taxes

51,226

6,116

Income taxes, inhabitants tax, and enterprise taxes

20,456

6,136

Income tax adjustments(3,280)(3,852)

Total Income taxes

17,1752,283

Net income

34,0503,833

Net income attributable to non-controlling interests

2,056

2,813

Net income attributable to owners of the parent

31,994

1,019

TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation*1	Inventories at the end of the fiscal year are shown after reductions
in book values to reflect declines in profitability, and the following
inventory valuation losses are included in the cost of sales.
FY2019FY2020¥ 1,980 million¥ 3,162 million

Financial Section & Corporate Data

Foundation that Supports Corporate Value*2	Major items included in selling expenses and their amounts are as
follows.

Warehousing and shipping expenses

FY2019FY2020¥ 7,955 million¥ 8,428 million

Selling expenses

2,155

1,421

*3 Major items included in general and administrative expenses and their amounts are as follows.

Salaries and allowances

FY2019FY2020¥ 6,718 million¥ 7,463 million

Additions to reserve for bonuses

375

209

Retirement benefit expenses

200

158

Additions to reserve for directors’ retirement benefits

1412Additions to reserve for executive officers’ retirement benefits

14

10

Depreciation and amortization

4,440

7,204

Research and development expenses

2,425

2,660

Amortization of goodwill

4,205

6,512

794

754

Rent expenses*4 Total amount of research and development expenses included in general and administrative expenses and production costs
FY2019FY2020¥ 2,460 million¥ 2,682 million*5 Insurance claim income and loss on disaster
Previous fiscal year (January 1, 2019 to December 31, 2019)
Not applicable.
Current fiscal year (January 1, 2020 to December 31, 2020)
Expenses required for the dismantling, removal and restoration of production facilities at the Tanoura Plant, which was damaged by the heavy rain disasterthat occurred in July 2020, and losses due to damage to inventories, etc. are recorded in “Loss on disaster.” Moreover, casualty insurance money received
is recorded in “Insurance claim income.”*6 Gains (losses) on sales of fixed assets were as follows.
FY2019FY2020

Buildings¥ 5 million

Transport equipment10¥ 1 million
15

Land

35

751

Other

4

2

Total

56

769

*7 Impairment loss
The Group recorded impairment losses with respect to the asset groups below. For more details, please refer to pages 81-82 of the FY2020 Securities Report.
https://contents.xj-storage.jp/xcontents/AS04435/b217c537/6644/4912/bc02/e811f08ac71e/20210512103733748s.pdf
Use

Type

Company nameLocation

Impairment loss (Millions of yen)

Idle asset

Buildings and structures
Land
Other

Tokai Carbon Co., Ltd.

Ishinomaki-shi, Miyagi

129

Idle asset

Buildings and structures
Land

Tokai Carbon Co., Ltd.

Gotemba-shi, Shizuoka

387

Idle asset

Buildings and structures
Land

Tokai Carbon Co., Ltd.

Taketoyo-cho, Chita-gun, Aichi

9

Idle asset

Buildings and structures
Land

Tokai Carbon Co., Ltd.

Kitakyushu-shi, Fukuoka

117*8 Losses on sales of fixed assets were as follows.
FY2019Machinery and equipment¥ 0 million

FY2020¥ 1 million

Other

2

0

Total

3

1

TOKAI CARBON INTEGRATED REPORT 202053

Financial Statements

Consolidated Statements of Cash Flows(Millions of yen)

FY2019FY2020Cash flows from operating activities
Net income before income taxes

51,226

6,116

Depreciation and amortization

18,503

20,890

Impairment loss

1,314

643

Loss (gain) on liquidation of subsidiaries and affiliates

(23)

—

Loss (gain) on sales of tangible fixed assets

522

(767)

4,205

6,512

Amortization of goodwill
Gain on termination of retirement benefit program

(53)

—

Increase (decrease) in allowance for doubtful accounts

(480)

(28)

0

270

Increase (decrease) in net defined benefit liability

2,514

168

Decrease (increase) in net defined benefit asset

(637)

(96)

Increase (decrease) in provision for environmentand safety measures

(281)

(200)

Interest and dividend income

(847)

(728)

Interest expenses

536

952

Foreign exchange gain (losses)

108

36

Equity in losses (income) of non-consolidated subsidiaries
and affiliates

(123)

(124)

—

(1,067)

Increase (decrease) in reserve for bonuses

Insurance claim income
Loss on disaster
Decrease (increase) in trade receivables
Decrease (increase) in inventories

1,337
10,463(19,778)

26,145—

3,084

Increase (decrease) in trade payables

730(9,430)

Increase (decrease) in accrued expenses

(88)

(246)

Increase (decrease) in accounts payable-other

(61)

97

Decrease (increase) in short-term guarantee deposits

Decrease (increase) in advance payments

1,732

(9)

Increase (decrease) in accrued consumption taxes(419)(1,639)65

134

67,28762,514

Other
SubtotalInterest and dividends received

891

798

Interest paid

(552)

(1,015)—

1,067

Proceeds from insurance income

—

(244)

Income taxes paid

(25,961)(8,098)Net cash provided by (used in) operating activities

41,66455,022

Payments associated with disaster loss

54

—
8,623

TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Financial Section & Corporate Data

Foundation that Supports Corporate Value(Millions of yen)

FY2019FY2020Cash flows from investing activities
Payments into time deposits(6,243)(8,992)

Proceeds from withdrawal of time deposits

5,399

5,986

(23,984)(26,839)

Proceeds from sales of tangible fixed assets

150

1,165

Purchase of intangible fixed assets

(649)

(391)

*2 (73,643)*2 (15,229)

(187)

0

(99,159)(44,301)

Net increase (decrease) in short-term borrowings(1,975)(33,167)

Net increase (decrease) in commercial paper

Purchase of tangible fixed assets

Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other
Net cash provided by (used in) investing activities

Cash flows from financing activities

30,00010,000

Proceeds from long-term debt

37,50015,015

Repayment of long-term debt

(27,302)(1,415)

Proceeds from issuance of bonds

35,00020,000

Repayments of finance lease obligations
Dividends paid
Dividends paid to non-controlling interests
Other

(371)

(600)

(7,673)(8,313)

(666)

(608)

57

17

64,568927

Effect of exchange rate changes on cash and cash equivalents(1,754)(364)

Increase (decrease) in cash and cash equivalents

5,318

11,284

Net cash provided by (used in) financing activities

41,12446,443* 46,443* 57,727

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

1

1

TOKAI CARBON INTEGRATED REPORT 202055

Financial Statements*1 Reconciliation of balance of Cash and cash equivalents at the end of the period and those on consolidated balance sheet

Cash and cash equivalents

FY2019FY2020¥ 52,695 million¥ 67,174 million

Time deposits with original maturities of more than three months(6,251)(9,446)

Cash and cash equivalents

46,44357,727*2 Principal assets and liabilities of companies that became consolidated subsidiaries due to share acquisitions
Previous fiscal year (January 1, 2019 to December 31, 2019)
Principal assets and liabilities of Tokai COBEX HoldCo GmbH upon consolidation of the company along with its three group companies resulting fromacquisition of its shares, as well as the relationship between the acquisition price of the shares of the company and expenditures (net) for its acquisition are
as follows.
Current assets¥ 22,281 million

Fixed assets

59,907

Goodwill

39,496

Current liabilities(8,697)

Fixed liabilities(37,356)

Foreign currency translation adjustments
Acquisition price for shares of Tokai COBEX HoldCo GmbH165
75,797

Cash and cash equivalents of Tokai COBEX HoldCo GmbH

(2,153)

Net: Funds used for acquisition of shares of subsidiaries resulting in a change in the scope of consolidation

73,643

The above figures are amounts reflecting the significant revision of the initial allocation amount of acquisition costs due to finalization of provisional
accounting treatments for the business combination.
Current fiscal year (January 1, 2020 to December 31, 2020)
Principal assets and liabilities of Carbone Savoie International SAS upon consolidation of the company along with its one subsidiary resulting from acquisitionof its shares, as well as the relationship between the acquisition price of the shares of the company and expenditures (net) for its acquisition are as follows.
Current assets
Fixed assets

11,706

Goodwill

1,429

Current liabilities(3,243)Fixed liabilities(3,086)

Foreign currency translation adjustments
Acquisition price for shares of Carbone Savoie International SAS

56¥ 13,469 million

320,278Cash and cash equivalents of Carbone Savoie International SAS

5,049

Net: Funds used for acquisition of shares of subsidiaries resulting in a change in the scope of consolidation

15,228TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Foundation that Supports Corporate Value

Financial Section & Corporate Data

Company Overview

Trade NameTOKAI CARBON CO., LTD.

Head Office

Aoyama Building, 1-2-3 Kita-Aoyama, Minato-ku, Tokyo 107- 8636, Japan
Tel: +81-3-3746-5100 (Switchboard)

Established

1918

President & CEO

Hajime Nagasaka, President and CEO

Fiscal YearEnding December 31

Capital Stock

20,436 million yen (as of December 2020)

Number of Employees

778 (4,178 consolidated) (as of December 2020)

Operations

Manufacture and sales of, Graphite Electrodes, Carbon Black, Fine Carbon,
Smelting and Lining, Friction Materials, Anode Materials,
Industrial Furnaces and Related Products
Head Office: TokyoResearch Laboratory : Fuji (Shizuoka), Chita, Hofu
Offices

Sales Branch: Osaka, Nagoya

Plant: Ishinomaki, Shonan, Chita, Shiga, Hofu,
Production Technology Center, Kyushu-Wakamatsu, Tanoura

Main Banks

Bank of Tokyo-Mitsubishi UFJ

TOKAI CARBON INTEGRATED REPORT 202057

Group Companies

Tokai Carbon (Tianjin) Co., Ltd
Tokai Konetsu (Suzhou) Co., Ltd.
Tokai Carbon (Suzhou) Co., Ltd.
Shanghai Tokai Konetsu Co., Ltd.
Tokai Carbon (Dalian) Co., Ltd.
THAI TOKAI CARBON PRODUCT CO., LTD.
Tokai Carbon Korea Co., Ltd.

SCHUNK TOKAI SCANDINAVIA AB
TOKAI CARBON ITALIA S.R.L.
TOKAI CARBON DEUTSCHLAND GmbHTOKAI ERFTCARBON GmbHTOKAI CARBON EUROPE GmbHTOKAI CARBON EUROPE LTD.
Tokai COBEX GmbH
Tokai COBEX Savoie SAS
Tokai COBEX Polska sp.zo.o

TOKAI CARBON U.S.A., INC.
MWI, INC.
TOKAI CARBON US HOLDINGS INC.
Cancarb Limited
TOKAI CARBON GE LLC
Tokai Carbon CB Ltd.

Chita Plant
Chita Laboratory
Nagoya Branch
Tokai Konetsu Engineering Co., Ltd.
Shiga Plant
Osaka Branch
Hofu Plant
Hofu Laboratory
Production Technology Center
Kyushu-Wakamatsu Plant
Tanoura Plant

Tokai Noshiro Seiko Co., Ltd.
Tokai Unyu Co., Ltd. Ishinomaki Office
Ishinomaki Plant
TOKAI CARBON Head OfficeFuji Research Laboratory
Shonan Plant
Oriental Sangyo Co., Ltd.
Mitomo Brake Co., Ltd.
Tokai Fine Carbon Co., Ltd.
Tokai Konetsu Kogyo Co., Ltd.
Tokai Material Co., Ltd.

58

TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Foundation that Supports Corporate Value

Financial Section & Corporate Data

Tokai Unyu Co., Ltd. Ishinomaki
OfficeIndustrial Furnaces andRelated Products Division

Minato-ku, Tokyo

Ishinomaki, Miyagi

Laboratory

Tokai Carbon CB Ltd.

Tokai Konetsu Kogyo Co., Ltd.
Head Office

TOKAI CARBON Fuji ResearchLaboratory

Fort Worth, U.S.A.

Minato-ku, Tokyo

TCCB US Ltd.

Tokai Konetsu Engineering Co., Ltd.

Sunto-gun, Shizuoka

Fort Worth, U.S.A.

Oumihachiman, Shiga

TOKAI CARBON Chita Laboratory

TCCB Genpar LLC

Shanghai Tokai Konetsu Co., Ltd.

Chita-gun, Aichi

Fort Worth, U.S.A.

Shanghai, China

TOKAI CARBON Hofu Laboratory

Cancarb Limited

Tokai Konetsu (Suzhou) Co., Ltd.

Hofu, Yamaguchi

Medicine Hat, Canada

Suzhou, China

BranchTHAI TOKAI CARBONPRODUCT CO., LTD.

Smelting and Lining Division

Head Office

TOKAI CARBON JAPANTOKAI CARBON Osaka Branch
Kita-ku, Osaka

Bangkok, Thailand

TOKAI CARBON Nagoya Branch
Nagoya, Aichi

Tianjin, China

Tokai Carbon (Tianjin) Co., Ltd

Tokai COBEX HoldCo GmbH
Wiesbaden, Germany

Tokai COBEX GmbH
Wiesbaden, Germany

Fine Carbon Division
Graphite Electrodes Division

Tokai COBEX Polska sp.zo.o

TOKAI CARBON Tanoura Plant

Raciborz, Poland

TOKAI CARBON Shiga Plant

Ashikita-gun, Kumamoto

Tokai COBEX (shanghai) Ltd.
Beijing, China

TOKAI CARBON Hofu Plant

Tokai Fine Carbon Co., Ltd.
Head Office

Hofu, Yamaguchi

Chigasaki, Kanagawa

Notre-Dame de Briançon, France

TOKAI CARBON GE
HOLDING LLC

Oriental Sangyo Co., Ltd.

Oumihachiman, ShigaCharlotte, U.S.A.

TOKAI CARBON GE LLC
Charlotte, U.S.A.

TOKAI CARBON GE FUND CORP.
Charlotte, U.S.A.

TOKAI ERFTCARBON GmbH
Grevenbroich, Germany

Carbon Black Division

TOKAI CARBON Ishinomaki Plant

Kofu, Yamanashi

TOKAI CARBON U.S.A., INC.
Hillsboro, U.S.A.

MWI, INC.
Rochester, U.S.A.

TOKAI CARBON EUROPE GmbH
Grevenbroich, Germany

TOKAI CARBON EUROPE LTD.
West Midlands, U.K.

TOKAI CARBON ITALIA S.R.L.

Tokai COBEX Savoie SAS

Other Divisions

TOKAI CARBON Shonan Plant[Friction Materials Division]
Chigasaki, Kanagawa

TOKAI CARBON Production
Technology Center[Anode Materials Division]
Hofu, Yamaguchi

Tokai Material Co., Ltd.
Head Office/Plant[Friction Materials Division]
Yachiyo, Chiba

Ishinomaki, Miyagi

Milano, Italy

TOKAI CARBON Chita Plant
Chita-gun, Aichi

TOKAI CARBON
DEUTSCHLAND GmbHTOKAI CARBON
Kyushu-Wakamatsu Plant

Buchholz-Mendt, Germany[Friction Materials Division]Hiki-gun, Saitama

SCHUNK TOKAI SCANDINAVIA AB

Tokai Noshiro Seiko Co., Ltd.

Trollhättan, Sweden[Friction Materials Division]Noshiro, Akita

kita-Kyusyu, Fukuoka

Tokai Carbon (Dalian) Co., Ltd.

Mitomo Brake Co., Ltd.

Dalian, China

Tokai Carbon (Suzhou) Co., Ltd.

Tokai Carbon Korea Co., Ltd.

[Friction Materials Division]Suzhou, China

Anseong-si, Korea

Other

TOKAI CARBON US HOLDINGS INC.
Charlotte, U.S.A.

TOKAI CARBON INTEGRATED REPORT 2020

59

Stock Information

Stock Summary
Securities code

5301

Stock Exchange ListingFirst Section of Tokyo Stock Exchange, Inc.

Fiscal Yearfrom January 1 to December 31

General Meeting of Shareholders

March
General Meeting of Shareholders : December 31

Shareholder Record Date

Year-End Dividend of Surplus: December 31

Interim Dividend: June 30 (when applicable)

Share Unit

100 shares

Shareholder Registry Administrator

4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo
Mitsubishi UFJ Trust and Banking Corporation

Method of Public NoticeElectronic notice(If unavoidable circumstances prevent notice from being given electronically,
notice shall be posted in the Nikkei.)

Stock Figures(as of December 31, 2020)

Total number of shares issued
by the company

598,764,000

Total number of outstanding shares

224,943,104

Total number of shareholders

78,224

Major Shareholders(as of December 31, 2020)

Name

Number of shares held
(1,000 shares)

The Master Trust Bank of Japan, Ltd. (Trust Account)

25,726

12.07

Japan Custody Bank, Ltd. (Trust Account)

15,006

7.04

MUFG Bank, Ltd.

7,958

3.73

SMBC Nikko Securities Inc.

7,686

3.61

Mitsubishi Corporation

6,748

3.17

Mitsubishi UFJ Trust and Banking Corporation

6,290

2.95

The Master Trust Bank of Japan, Ltd.
(Mitsubishi Chemical Corp. Retirement Benefit Trust Account)

5,900

2.77

Japan Custody Bank, Ltd. (Trust Account 9)

3,149

1.47

Japan Custody Bank, Ltd. (Trust Account 5)

3,102

1.46

Japan Custody Bank, Ltd. (Trust Account 6)

2,801

1.31

Notes 1. Tokai Carbon holds 11,771,000 shares of treasury stock but has not been listed among the major shareholders above.
2. The shareholding ratio was calculated excluding treasury stock.

60

Shareholding ratio(%)

TOKAI CARBON INTEGRATED REPORT 2020

INTRODUCTION

Tokai Carbon Value Creation

Strategy for Value Creation

Share Owner Information

Financial Section & Corporate Data

Foundation that Supports Corporate Value(as of December 31, 2020)

Number of shares held
(1,000 shares)

Shareholder
Financial Institutions

93,753(44%)

Individuals/Others

59,878(28%)

Foreign Corporations, etc.

22,218(10%)

Japanese Corporations

21,528(10%)

Financial Instruments Business
Operators

15,792

(7%)

Total

213,171(100%)

Note The shareholding ratio was calculated excluding treasury stock.

Financial Instruments
Business Operators

7%

Financial Institutions 44%

Japanese Corporations 10%
Foreign
Corporations, etc. 10%

Shareholding ratio

Individuals/Others 28%

Dividend Policy• The Company regards returning profits to shareholders to be one of its important management priorities in its efforts
to increase corporate value over the medium and long term. Accordingly, the Company maintains its basic policy to pay
dividends stably and continuously with a consolidated payout ratio of 30% as a target, while giving consideration to its
operating results and forecasts, investment plans, and status of cash flows, etc. in each period.
• The Company’s basic policy is to distribute dividends of surplus twice a year: an interim dividend and a year-end dividend. The
decision-making body for such dividends of surplus is the General Meeting of Shareholders for the year-end dividend and theBoard of Directors for the interim dividend.
• Based on the policy outlined above, the Company decided to pay an annual dividend of ¥30 per share (including an interim
dividend of ¥15 per share) for the fiscal year under review.
• The Company plans to allocate retained earnings to investments in areas that could become sources of future value, such as
facility upgrades, environmental investments, growth-oriented investments, and strategic investments.
• The Company’s articles of incorporation stipulate that “An interim dividend may be distributed with a record date of June 30
every year by the resolution of the Board of Directors.”
Dividends per share and dividend payout ratio (consolidated)
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021*

Dividends per share (yen)

8

8

7

6

6

6

6

12

24

48

30

30

Dividend payout ratio (%)

30.7

27.9

74.9

105.6

50.0

51.5

—

20.7

7.0

32.0

627.0

71.2

* 2021 = Forecast as of February 2021

TOKAI CARBON INTEGRATED REPORT 202061