Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

November 5, 2021

Consolidated Financial Results
for the Second Quarter of the Term Ending March 31, 2022
(Under Japanese GAAP)
Company name: TSUMURA & CO.
Listing:
Tokyo Stock Exchange
Securities code:
4540
URL:
https://www.tsumura.co.jp
Representative:
Terukazu Kato, President,Representative Director and CEO
Inquiries:
Ritsuko Inukai, Head of Corporate Communications Dept.
Telephone:+81-3-6361-7100
Scheduled date to file quarterly securities report: November 8, 2021
Scheduled date to commence dividend payments: December 6,2021
Preparation of supplementary material on quarterly financial results: Yes
Holding of financial results briefing: Yes (for institutional investors, securities analysts and news media)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated business results for the Second quarter of the term ending March 31, 2022 (from April 1,
2021 to September 30, 2021)(1) Consolidated operating results (cumulative)
Net sales
Six-month period
ended(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen%

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

September 30, 2021

63,416

11.4

11,6847.0

13,409

22.9

9,965

24.5

September 30, 2020

56,952－

10,920－10,909

－

8,002

－

Note: Comprehensive income

Six-month period ended September 30, 2021:
Six-month period ended September 30, 2020:

Basic earnings per share

Diluted earnings per share

Yen

Yen

Six-month period ended
September 30, 2021

130.26¥14,988 million¥6,373 million[135.2 %][ － %]－－
September 30, 2020
104.59Note:(ⅰ)The Company has determined the provisional accounting treatment for business combinations in the fiscal year ended March 31,
2021, and figures for the second quarter of the term ended March 31, 2021 reflect the contents of the determined provisional accounting
treatment.
(ⅱ) The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. has been applied from the
beginning of the first quarter under review, and figures for the second quarter of the fiscal year ended March 31, 2021 are those after
retroactively applying the Accounting Standard, etc. Therefore, the ratio of year-on-year change is not stated for the second quarter ofthe fiscal year ended March 31, 2021.

(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen%

September 30, 2021

335,881245,640

68.2

March 31, 2021

319,063

233,169

68.3

Reference:

EquityAs of September 30, 2021:
As of March 31, 2021:¥228,976 million¥217,786 million

2. Dividends
Annual dividends per shareFirst quarter-end

Second quarter-end Third quarter-end

Yen
Fiscal year ended
March 31, 2021
Fiscal year ending
March 31, 2022

Yen

－

32.00

－

32.00

Fiscal year ending
March 31, 2022 (Forecast)Fiscal year-end

Yen

Total

Yen

Yen

－

32.00

64.00

－

32.00

64.00

Note: Revisions to dividends projection published most recently: No

3. Projections of consolidated business results for the term ending March 31, 2022
(From April 1, 2021 to March 31, 2022)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year
and from the second quarter of the previous fiscal year for second quarter (aggregate).)Profit attributable to
Net sales
Operating profit
Ordinary profit
Profit per shareowners of parent
Million yen% Million yen% Million yen% Million yen%

Yen

Full-year
127,500
9.5
21,1008.9
23,40012.1
16,6008.3
216.97
Note: Revisions to projections of consolidated business results published most recently: No
Please see “1.Qualitative information on quarterly results (3) Description of projections of consolidated business results” on page 4
for the revision of its earnings forecast announced on October 29, 2021.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes
Note: For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the
Quarterly Consolidated Financial Statements (application of specific accounting treatment to the preparation ofquarterly financial statements)” on page 11 of the material attached hereto.
(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
Note: For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the
Quarterly Consolidated Financial Statements (Changes in accounting policies)” on page 11 of the material attachedhereto.
(4) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2021

76,758,362 shares

As of March 31, 2021

76,758,362 shares(ii) Number of treasury shares at the end of the period
As of September 30, 2021

250,793 shares

As of March 31, 2021

250,402 shares(iii) Average number of shares outstanding during the period
Six-month ended September 30, 2021

76,507,801 shares

Six-month ended September 30, 2020

76,508,283 shares* This Consolidated Financial Results is not subject to audit procedures performed by a certified public
accountant or audit corporation.

*Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
Forward-looking statements such as financial projections, which are stated in this document, are based on
information currently available to the Company and certain assumptions deemed reasonable. There is apossibility that actual results, etc. will differ materially from forecasts due to various factors. Please see “1.
Qualitative information on quarterly results (3) Description of projections of consolidated business results” onpage 4 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials
1. Qualitative information on quarterly results ·····························································································

2(1) Description of operating results ········································································································

2(2) Description of financial position ······································································································

3(3) Description of projections of consolidated business results ········································································

4

2. Quarterly Consolidated Financial Statements and Key Notes ··········································································

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

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

7

Quarterly Consolidated Statements of Income
For the Second Quarter Consolidated Accumulative Term ·······································································

7

Quarterly Consolidated Statements of Comprehensive Income
For the Second Quarter Consolidated Accumulative Term ·······································································

8(3) Consolidated Statements of Cash Flows ·····························································································

9(4) Notes to the Consolidated Financial Statements ····················································································

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

11(Notes on case of extreme change in shareholder's equity amount) ····························································

11(Application of specific accounting treatment to the preparation of quarterly financial statements) ······················

11(Changes in accounting policies) ·····································································································

11(Business combinations) ·············································································································

11

- 1 -

1. Qualitative information on quarterly results
The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the
beginning of the first quarter and makes a comparative analysis with the second quarter of the previous fiscal year and the previous
fiscal year, using figures after retroactively applying the Accounting Standard, etc.
In addition, for business combination with Ping An Tsumura Pharmaceutical Co., Ltd. and its five subsidiaries conducted on March 30,
2020, the purchase price allocation (PPA) was not completed in the second quarter of the previous fiscal year but was completed at theend of the previous fiscal year. Therefore, amounts reflecting the PPA are used for the comparative analysis with the second quarter ofthe previous fiscal year.
(1) Description of operating results
Consolidated business results for the Second quarter under review were as follows:[Consolidated business results]
FY 3/2021 2Q(Million yen)
YoY Change
Percent Change

FY 3/2022 2Q

56,952

63,416

6,464
11.4％

Domestic sales

54,47558,8294,353
8.0％

Overseas sales

2,476

4,587

2,110
85.2％

Cost of sales

26,83030,721

3,891
14.5％

Selling, general and administrative expenses

19,20221,011

1,809
9.4％

Operating profit

10,92011,684763
7.0％

Ordinary profit

10,90913,409

2,499
22.9％

Profit attributable to owners of parent

8,002

9,965

1,963
24.5％

Net sales

Net sales increased 11.4% year on year, to 63,416 million yen.
Domestic net sales were 58,829 million yen. In sales of prescription Kampo products of the Group, prescriptions for products to treat
conditions such as mental illness and skin complaints grew with the promotion of activities for providing information in response to
demand for medical services. Prescriptions for products to treat dizziness also increased. Prescriptions for products to treat common
cold symptoms remained sluggish due to factors such as a decrease in the number of hospital visitors. However, the scale of the decrease
narrowed.
The sales of Daikenchuto, a mainstay item for the Company and a drug fostering program formulation*1, grew 2.7% year on year,
reflecting increased prescription opportunities, particularly at general clinics, for feelings of abdominal flatulence. In Growing
formulations*2, the sales of Goreisan grew 19.2% year on year, supported by increased prescription opportunities for the peripheral
symptoms of dizziness, headache and circulatory organ ailments. As a result, sales for 129 prescription Kampo products increased 7.7%
year on year.
Overseas net sales were 4,587 million yen.

In the crude drug platforms provided by Ping An Tsumura Pharmaceutical Co., Ltd. and

SHENZHEN TSUMURA MEDICINE CO., LTD., sales of crude drugs and crude drug pieces for decoction grew.
Cost of sales increased 14.5% year on year, to 30,721 million yen, reflecting the growth in net sales. The cost-to-sales ratio rose 1.3
percentage points year on year, to 48.4%.
Selling, general and administrative expenses increased 9.4% year on year, to 21,011 million yen. This was mainly due to a rise in
expenses for activities associated with e-promotions. The SGA ratio fell 0.6 percentage points year on year, to 33.1%.
As a result, operating profit increased 7.0% year on year, to 11,684 million yen. The operating profit margin was 18.4%, falling 0.8
percentage points from a year ago. Ordinary profit rose 22.9% year on year, to 13,409 million yen, thanks to the impact of foreignexchange gains, and profit attributable to owners of parent increased 24.5% year on year, to 9,965 million yen.
*1 “Drug fostering” program formulations:
Formulations the Company is addressing by looking hard at the structure of diseases in recent years, targeting diseases that are difficult- 2 -to treat with new drugs for which prescription Kampo preparations prove specifically effective in domains where demand for medical
treatment is high, and calling the establishment of evidence “drug fostering”*2 “Growing” formulations:
Growth drivers aimed at registration in clinical practice guidelines as strategic formulations after five drug fostering program
formulations by constructing evidence (such as data on safety and effectiveness) in domains where the degree of satisfaction with medical
treatment and the degree of drug contribution are low[Initiatives in response to COVID-19 pandemic]
In response to the COVID-19 pandemic, the Company ensured prevention of transmission to employees and business associates
throughout the year and focused on the stable supply of products to fulfil its responsibility as a pharmaceuticals company.
There was no impact on product supply either in Japan or overseas.
The Company will continue to monitor the changing situation and focus on infection control measures and the stable supply of products.
(2) Description of financial condition
The financial position at the end of the second quarter under review was as follows:
Total assets at the end of the second quarter increased 16,817 million yen from the end of the previous fiscal year, to 335,881 million
yen. Current assets increased 14,303 million yen from the end of the previous fiscal year, mainly due to a rise in inventories. Noncurrent assets increased 2,514 million yen from the end of the previous fiscal year, mainly due to an increase in property, plant andequipment, offsetting a decrease in investment securities.
Total liabilities were 90,240 million yen, an increase of 4,346 million yen from the end of the previous fiscal year. Notes and accounts
payable – trade increased, but current liabilities shrank 4,556 million yen from the end of the previous fiscal year, mainly due to a
decline in the current portion of long-term borrowings.
Non-current liabilities grew 8,902 million yen from the end of the previous fiscal year, mainly reflecting an increase in long-termborrowings.
Net assets totaled 245,640 million yen, an increase of 12,471 million yen from the end of the previous fiscal year. Shareholders’ equity
rose 7,459 million yen from the end of the previous fiscal year, mainly reflecting an increase in retained earnings. Accumulated othercomprehensive income climbed 3,730 million yen from the end of the previous fiscal year, chiefly due to an increase in foreign
currency translation adjustment. Non-controlling interests increased 1,281 million yen from the end of the previous fiscal year.
As a result, the equity ratio fell 0.1 percentage point, to 68.2%.
Cash flows in the first half under review were as follows:
At the end of the first half under review, cash provided by operating activities was 11,815 million yen, cash used in investing activities
was 3,600 million yen, and cash used in financing activities was 2,733 million yen.
Cash provided by operating activities was 11,815 million yen. Looking at its breakdown, a major cash inflow item was profit before
income taxes of 13,165 million yen, while a major cash outflow item was income taxes paid of 3,894 million yen. Compared to thefirst half of the previous fiscal year, cash inflow increased 1,081 million yen.
Cash used in investing activities was 3,600 million yen. Looking at its breakdown, purchase of property, plant and equipment of 4,764
million yen was a major cash outflow item. Compared to a year ago, cash outflow rose 1,060 million yen.
Cash used in financing activities was 2,733 million yen. Looking at its breakdown, a major cash outflow item was dividends paid of
2,447 million yen. Compared to the first half of the previous fiscal year, cash outflow dropped 4,472 million yen.
As a result, cash and cash equivalents increased 7,627 million yen from the end of the previous fiscal year, to 67,296 million yen.

- 3 -(3) Description of projections of consolidated business results
The consolidated earnings forecast for the fiscal year ending March 2022 has been revised as follows in the "Notice Concerning
Revision of Earnings Forecast" announced on October 29, 2021.

(i) Revision of projections of consolidated business results for the fiscal year ending March 31, 2022 (from April 1, 2021 to March
31, 2022)

Million yen
122,500
127,500
5,000
4.1％

OperatingprofitMillion yen
19,50021,1001,600
8.2％

116,413

19,382

Net sales
Previous forecast (A)Revised forecast (B)Change (B - A)
Percentage change (%)

Million yen
20,00023,4003,400
17.0％

Profit attributable toowners of parent
Million yen
14,20016,6002,400
16.9％

20,866

15,332

Ordinary profit

Profit per share
Yen
185.60216.97（Reference) Resultsfor previous fiscal year
（ended March 31, 2021)

200.40(ii) Reason of revision
In the domestic prescription medicines business, the Company expects net sales will continue to expand given increased activities toprovide information by means such as e-promotions. Meanwhile, sales for the Chinese business are predicted to rise above the initialplan, too, due to the strong sales of products, including crude drugs and crude drug pieces for decoction.
The Company expects consolidated net sales to total 5,000 million yen more than its initial plan and reach 127,500 million yen.
The Company expects that profits will surpass the previously announced forecasts, despite a rise in selling, general and administrative
expenses associated with an expected increase in spending in areas such as an allocation to measures that will help expand the Kampo
market.
As a result, the Company forecasts operating profit of 21,100 million yen, an improvement of 1,600 million yen from the initial plan,
ordinary profit of 23,400 million yen, an improvement of 3,400 million yen, and profit attributable to owners of parent of 16,600
million yen, an improvement of 2,400 million yen.
(Note) The above forecasts are based on information available as of the date of these materials and do not take into consideration theimpact of currently unforeseeable risks such as the impact of further coronavirus outbreaks on social and economic activity. Actual
financial and other results may differ materially from these forecasts depending on a number of factors. The Company will maketimely and appropriate disclosure should the situation change in the future.

- 4 -2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets

As of September 30, 2021

61,31048,623
13,93913,39653,41913,63767,31051,864
10,073
14,04362,98812,368(53)(71)

204,273

218,576

Non-current assets
Property, plant and equipment
Buildings and structures
Other

74,533
97,252

76,572102,100

Accumulated depreciation(87,609)(92,111)

84,176

86,561

7,881
3,561

8,294
3,724

Total intangible assets

11,44312,018Investment and other assets
Investment securities
Retirement benefit asset
Other

11,4452,252
5,472

10,2582,470
5,994

Total property, plant and equipment
Intangible assets
Goodwill
Other

Allowance for doubtful accounts

(0)

(0)

Total investment and other assets

19,17018,724

Total non-current assets
Total assets- 5 -114,789

117,304

319,063

335,881(Million yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payable

As of September 30, 2021

8,593
10,472
12,3804,057
12,876

12,73910,3133,000
3,640
14,131

48,38043,82430,000－30,0009,377

Retirement benefit liability
Other

61
7,452

61
6,978

Total non-current liabilities

37,513

46,416

Total liabilities

85,89490,240Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings

30,142
13,789168,989

30,142
13,732
176,506

Long-term borrowings

Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

(679)

(681)

212,241

219,701

3,180
1,233
2,673

Foreign currency translation adjustment(1,130)

2,353
1,093
2,673
3,557

Remeasurements of defined benefit plans

(412)

(401)

Total accumulated other comprehensive income

5,544

9,275

Non-controlling interests

15,382

16,663

Total net assets

233,169

245,640

319,063

335,881

Total liabilities and net assets- 6 -(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the Second Quarter Consolidated Accumulative Term
(Million yen)Six-month period ended
September 30,2020(From April 1, 2020
to September 30, 2020)

Six-month period ended
September 30,2021(From April 1, 2021
to September 30, 2021)

Net sales
Cost of sales

56,952
26,83063,41630,721Gross profit

30,122

32,695

Selling, general and administrative expenses

19,20221,011

Operating profit

10,92011,684

265
135

234
129

69

－

Foreign exchange gains

－

1,184

Other

190

310

Total non-operating income

660

1,858
116

Foreign exchange losses

167
485

Other

18

17

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodNon-operating expenses
Interest expenses

Total non-operating expenses

－

671

133

10,90913,4090
4

21

Gain on sales of investment securities
Total extraordinary income

421

Ordinary profit
Extraordinary income
Gain on sales of non-current assets－

Extraordinary losses
Loss on sales of non-current assets

0－Loss on retirement of non-current assets

13

264

13

264

Profit before income taxes

Total extraordinary losses

10,90013,165

Total income taxes

3,198

3,253

Profit

7,702

9,911

Loss attributable to non-controlling interests

(299)

(54)

Profit attributable to owners of parent

8,002

9,965

- 7 -

Quarterly Consolidated Statements of Comprehensive Income / For the Second Quarter Consolidated Accumulative Term
(Million yen)Six-month period ended
September 30,2020(From April 1, 2020
to September 30, 2020)
ProfitOther comprehensive income

Six-month period ended
September 30,2021(From April 1, 2021
to September 30, 2021)

7,702

9,911

Valuation difference on available-for-sale securities

389

(826)

Deferred gains or losses on hedges

248

(140)

(1,995)

5,995

45

10

(16)

37

(1,329)

5,076

6,373

14,988

6,944

13,696
1,291

Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to
Owners of parent(570)

Non-controlling interests- 8 -(3) Quarterly Consolidated Statements of Cash Flows(Million yen)Six-month period ended
September 30,2020(From April 1, 2020
to September 30, 2020)
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts

Six-month period ended
September 30,2021(From April 1, 2021
to September 30, 2021)

10,9003,935
201
213,165
4,322
218
13

(400)

(364)

167

116

(69)

－

13

243

515

(2,868)Decrease (increase) in inventories(454)(2,766)

Increase (decrease) in trade payables(1,181)

3,450

(4)

－

Decrease (increase) in retirement benefit asset

(144)

(209)

Increase (decrease) in retirement benefit liability
Other

4
205

6
148

13,69015,477

Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Decrease (increase) in trade receivables

Loss (gain) on sales of short-term and long-term investment
securities

SubtotalInterest and dividend income received

528

365

(169)

(133)

Income taxes paid

(3,316)(3,894)

Net cash provided by (used in) operating activities

10,733

11,815

2,321

1,711

(4,136)(4,764)052Interest paid

Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

(105)

(226)

Purchase of short-term and long-term investment securities(18,162)(6,669)Proceeds from sales and redemption of short-term and longterm investment securities

18,178

6,664

Purchase of investments in capital of subsidiaries

(451)

－

Loan advances

(155)

－

Purchase of intangible assets

Collection of loans receivable
Other
Net cash provided by (used in) investing activities

- 9 -

1

0

(31)

(367)

(2,539)(3,600)(Million yen)Six-month period ended
September 30,2020(From April 1, 2020
to September 30, 2020)

Six-month period ended
September 30,2021(From April 1, 2021
to September 30, 2021)

Cash flows from financing activities
Proceeds from short-term borrowings

1,848

－

Repayments of short-term borrowings(13,398)

Repayments from long-term borrowings

－

(167)
9,377

Repayments of long-term borrowings－(9,376)

7,567－(2,448)(49)(2,447)
(87)

(699)

－

Proceeds from share issuance to non-controllingshareholders
Dividends paid
Dividends paid to non-controlling interests
Purchase of investments in capital of subsidiaries that do
not result in change in scope of consolidation
Other

(26)

(31)

Net cash provided by (used in) financing activities(7,206)(2,733)

Effect of exchange rate change on cash and cash equivalents

(791)

2,145

Net increase (decrease) in cash and cash equivalents

195

7,627

Cash and cash equivalents at beginning of period

57,69259,668

Increase in cash and cash equivalents resulting from inclusionof subsidiaries in consolidation

3,519

－

Cash and cash equivalents at end of period

61,407

67,296- 10 -

(4) Notes to the Consolidated Financial Statements(Notes on premise of a going concern)
There are no applicable matters.
(Notes on case of extreme change in shareholder's equity amount)
No relevant items.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of the costaccounting period, which is, therefore, deferred as “current assets (other) or current liabilities (other).”(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company has decided to apply the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020;
hereinafter the "Revenue Recognition Accounting Standard"), etc. from the beginning of the first quarter and recognize revenue fromgoods or services which the Group promised to provide at an amount expected to be received in exchange for the goods or services at
the time when control over the promised goods or services has been transferred to a customer.
As a result, some expenses which were recorded in cost of sales and selling, general and administrative expenses in the past are
deducted from net sales.
In addition, provision for sales returns, which was recorded in current liabilities in the past, is presented in "Other" under current
liabilities as refund liabilities.
This change in accounting policies is applied retroactively, in principle, and quarterly consolidated financial statements andconsolidated financial statements for the first quarter of the previous fiscal year and the previous fiscal year are those after
retroactively applying the change.
Accounting Standard is applied.

However, the following method stipulated in Paragraph 85 of the Revenue Recognition(1) For contracts in which the amounts of almost all revenues were recognized in accordance with the previous accounting treatment
prior to the beginning of the previous fiscal year, comparative information shall not be adjusted retroactively.
As a result, net sales for the second quarter of the previous fiscal year decreased 7,041 million yen, cost of sales decreased 0 million
yen, and selling, general and administrative expenses decreased 7,041 million yen, compared to before retroactive application.
However, this does not have an impact on operating profit, ordinary profit and profit attributable to owners of parent. There is also
no impact on the balance of retained earnings at the beginning of the previous fiscal year.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company has decided to apply the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019;
hereinafter the "Fair Value Measurement Accounting Standard"), etc. from the beginning of the first quarter and apply the new
accounting policy stipulated in the Fair Value Measurement Accounting Standard, etc. according to the provisional treatment stipulated
in Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10, July 4, 2019) into the future. The application of the Fair Value Measurement AccountingStandard and others mentioned above does not have no impact on quarterly consolidated financial statements.
(Business combinations)
Material review in the initially allocated amounts of acquisition costs in comparative information
With respect to the business combination with Ping An Tsumura Pharmaceutical Co., Ltd. and its five subsidiaries, which took placeon March 30, 2020, the Company applied provisional accounting treatment in the second quarter of the previous fiscal year, but it was
finalized at the end of the previous fiscal year.
Associated with the finalization of the provisional accounting treatment, a material review is reflected on the initially allocatedamounts of acquisition costs in comparative information that is included in quarterly consolidated financial statements for the second
quarter under review.
As a result, operating profit, ordinary profit, profit before income taxes and profit decreased 204 million yen, respectively, and profit
attributable to owner of parent declined 81 million yen in the quarterly consolidated statement of income for the second quarter of theprevious fiscal year.

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