Sumitomo Chemical : Detailed financial statements for FY2023 (2.6 MB)

Consolidated

Financial Statements

Years ended March 31, 2024 and 2023

Consolidated Statement of Financial Position

Millions of yen	Note	As of March 31, 2024	As of March 31, 2023
Assets
Current assets:
Cash and cash equivalents	8	¥	217,449	¥	305,844
Trade and other receivables	9		620,022		603,161
Other financial assets	10		31,338		31,237
Inventories	11		709,637		744,474
Other current assets	12		79,077		70,670
Subtotal			1,657,523		1,755,386
Assets held for sale	13		18,359		7,498
Total current assets			1,675,882		1,762,884
Non-current assets:
Property, plant and equipment	14		796,526		829,355
Goodwill	15		263,757		266,868
Intangible assets	15		272,921		403,996
Investments accounted for using the equity method	17		319,988		402,980
Other financial assets	10		412,747		313,115
Retirement benefit assets	24		110,390		99,253
Deferred tax assets	18		37,070		39,492
Other non-current assets	12		45,537		47,560
Total non-current assets			2,258,936		2,402,619
Total assets		¥	3,934,818	¥	4,165,503

1

Millions of yen	Note	As of March 31, 2024	As of March 31, 2023
Liabilities and equity
Liabilities
Current liabilities:
Bonds and borrowings	19,21	¥	585,905	¥	396,903
Trade and other payables	23		543,384		515,865
Other financial liabilities	20,21,22		77,610		74,931
Income taxes payable			8,545		31,772
Provisions	25		90,919		129,030
Other current liabilities	26		129,087		128,060
Subtotal			1,435,450		1,276,561
Liabilities directly associated with assets held for sale	13		8,037		1,806
Total current liabilities			1,443,487		1,278,367
Non-current liabilities:
Bonds and borrowings	19,21		977,581		1,064,463
Other financial liabilities	20,21,22		100,144		98,594
Retirement benefit liabilities	24		30,589		26,427
Provisions	25		46,059		38,443
Deferred tax liabilities	18		121,146		101,164
Other non-current liabilities	26		51,446		68,856
Total non-current liabilities			1,326,965		1,397,947
Total liabilities			2,770,452		2,676,314
Equity
Share capital	27		89,938		89,810
Capital surplus	27		237		－
Retained earnings	27		578,175		891,552
Treasury shares	27		(8,355)		(8,349)
Other components of equity	27		304,033		197,830
Other comprehensive income associated with			1,725		349
assets held for sale
Equity attributable to owners of the parent			965,753		1,171,192
Non-controlling interests			198,613		317,997
Total equity			1,164,366		1,489,189
Total liabilities and equity		¥	3,934,818	¥	4,165,503

2

Consolidated Statement of Income

Fiscal years ended March 31, 2024 and 2023

Millions of yen	Note		FY2023			FY2022
Sales revenue	6,29	¥	2,446,893		¥	2,895,283
Cost of sales			(1,947,198)				(2,074,357)
Gross profit			499,695				820,926
Selling, general and administrative expenses	30		(887,124)				(878,261)
Other operating income	31		27,935				69,227
Other operating expenses	31		(71,934)				(36,079)
Share of profit (loss) of investments accounted for	17		(57,398)				(6,797)
using the equity method
Operating income (loss)			(488,826)				(30,984)
Finance income	32		72,997				70,836
Finance expenses	32		(46,963)				(39,621)
Income (loss) before taxes			(462,792)				231
Income tax expenses	18		(2,657)				(47,096)
Net income (loss)			(465,449)				(46,865)
Net income (loss) attributable to:			(311,838)				6,987
Owners of the parent
Non-controlling interests			(153,611)				(53,852)
Net income (loss)		¥	(465,449)		¥	(46,865)

Yen			FY2023	FY2022
Earnings per share:	34		(190.69)	4.27
Basic earnings (loss) per share
Diluted earnings per share			－	4.27

3

Consolidated Statement of Comprehensive Income

Fiscal years ended March 31, 2024 and 2023

Millions of yen	Note		FY2023		FY2022
Net income (loss)		¥	(465,449)	¥	(46,865)
Other comprehensive income :
Items that will not be reclassified to profit or loss
Remeasurements of financial assets measured	33		42,622		14,958
at fair value through other comprehensive income
Remeasurements of defined benefit plans	24,33		(3,387)		8,670
Share of other comprehensive income of investments	17,33		3,644		1,126
accounted for using the equity method
Total items that will not be reclassified to profit or loss			42,879		24,754
Items that may be subsequently reclassified to
profit or loss
Cash flow hedge	33,36		925		8,163
Exchange differences on conversion of	33		104,619		62,572
foreign operations
Share of other comprehensive income of investments	17,33		15,023		17,003
accounted for using the equity method
Total items that may be subsequently reclassified to			120,567		87,738
profit or loss
Other comprehensive income, net of taxes			163,446		112,492
Total comprehensive income			(302,003)		65,627
Total comprehensive income attributable to :
Owners of the parent			(187,380)		84,077
Non-controlling interests			(114,623)		(18,450)
Total comprehensive income		¥	(302,003)	¥	65,627

4

Consolidated Statement of Changes in Equity

Fiscal year ended March 31, 2024

Equity attributable to owners of the parent

Other components of equity

Remeasurements

Share

Capital

Retained

Treasury

of financial assets

Remeasurements

capital

surplus

earnings

shares

measured at fair value

of defined benefit

Millions of yen

Note

through other

plans

comprehensive income

Balance as of April 1, 2023

¥

89,810

¥

－

¥

891,552

¥

(8,349)

¥

81,869

¥

－

Net income (loss)

－

－

(311,838)

－

－

－

Other comprehensive

33

－

－

－

－

24,972

(4,940)

income

Total comprehensive income

－

－

(311,838)

－

24,972

(4,940)

Issuance of new shares

27

128

128

－

－

－

－

Purchase of treasury shares

27

－

－

－

(5)

－

－

Disposal of treasury shares

27

－

0

－

0

－

－

Dividends

28

－

－

(19,628)

－

－

－

Changes resulting from

－

－

－

－

－

－

additions to consolidation

Changes resulting from loss

－

－

(290)

－

－

－

of control of subsidiaries

Change in interest due to

transactions with

37

－

109

－

－

－

－

non-controlling interests

Transfer from other

components of equity to

－

－

18,453

－

(23,393)

4,940

retained earnings

Others, net

－

－

(74)

－

－

－

Transfer to other

comprehensive

－

－

－

－

－

－

income associated with

assets held for sale

Transfer of negative

balance of other capital

－

－

－

－

－

－

surplus

Total transactions with owners

128

237

(1,539)

(5)

(23,393)

4,940

Balance as of March 31, 2024

¥

89,938

¥

237

¥

578,175

¥

(8,355)

¥

83,448

¥

－

Equity attributable to owners of the parent

Other components of equity

Other

Equity

Non-

Exchange

comprehensive

attributable

controlling

Total equity

differences on

income

Cash flow

Total

associated with

to owners of

interests

conversion of

hedges

foreign

assets held for

the parent

Note

operations

sale

Balance as of April 1, 2023

¥

(539)

¥

116,500

¥ 197,830

¥

349

¥1,171,192

¥

317,997

¥ 1,489,189

Net income (loss)

－

－

－

－

(311,838)

(153,611)

(465,449)

Other comprehensive

33

858

103,568

124,458

－

124,458

38,988

163,446

income

Total comprehensive income

858

103,568

124,458

－

(187,380)

(114,623)

(302,003)

Issuance of new shares

27

－

－

－

－

256

－

256

Purchase of treasury shares

27

－

－

－

－

(5)

－

(5)

Disposal of treasury shares

27

－

－

－

－

0

－

0

Dividends

28

－

－

－

－

(19,628)

(5,954)

(25,582)

Changes resulting from

－

－

－

－

－

54

54

additions to consolidation

Changes resulting from loss

－

1,923

1,923

(349)

1,284

－

1,284

of control of subsidiaries

Change in interest due to

transactions with

37

－

－

－

－

109

1,139

1,248

non-controlling interests

Transfer from other

components of equity to

－

－

(18,453)

－

－

－

－

retained earnings

Others, net

－

－

－

－

(74)

－

(74)

Transfer to other

comprehensive

－

(1,725)

(1,725)

1,725

－

－

－

income associated with

assets held for sale

Transfer of negative

balance of other capital

－

－

－

－

－

－

－

surplus

Total transactions with owners

－

198

(18,255)

1,376

(18,058)

(4,761)

(22,819)

Balance as of March 31, 2024

¥

319

¥

220,266

¥ 304,033

¥

1,725

¥

965,753

¥

198,613

¥ 1,164,366

5

Fiscal year ended March 31, 2023

Equity attributable to owners of the parent

Other components of equity

Remeasurements of

Share

Capital

Retained

Treasury

financial assets

Remeasurements

capital

surplus

earnings

shares

measured at fair value

of defined benefit

Millions of yen

Note

through other

plans

comprehensive income

Balance as of April 1, 2022

¥

89,699

¥

27,089

¥

974,382

¥

(8,343)

¥

82,682

¥

－

Net income (loss)

－

－

6,987

－

－

－

Other comprehensive

33

－

－

－

－

4,550

9,163

income

Total comprehensive income

－

－

6,987

－

4,550

9,163

Issuance of new shares

27

111

111

－

－

－

－

Purchase of treasury shares

27

－

－

－

(6)

－

－

Disposal of treasury shares

27

－

0

－

0

－

－

Dividends

28

－

－

(42,514)

－

－

－

Changes resulting from

－

－

－

－

－

－

additions to consolidation

Changes resulting from loss

－

－

513

－

(505)

－

of control of subsidiaries

Change in interest due to

transactions with

37

－

(88,037)

－

－

－

－

non-controlling interests

Transfer from other

13,672

(4,509)

(9,163)

components of equity to

－

－

－

retained earnings

Others, net

－

(603)

(48)

－

－

－

Transfer to other

comprehensive

－

－

－

－

(349)

－

income associated with

assets held for sale

Transfer of negative

balance of other capital

－

61,440

(61,440)

－

－

－

surplus

Total transactions with owners

111

(27,089)

(89,817)

(6)

(5,363)

(9,163)

Balance as of March 31, 2023

¥

89,810

¥

－

¥

891,552

¥

(8,349)

¥

81,869

¥

－

Equity attributable to owners of the parent

Other components of equity

Other

Equity

Non-

comprehensive

Exchange

attributable

controlling

Total equity

Cash flow

differences on

income

Total

associated with

to owners of

interests

conversion of

hedges

foreign

assets held for

the parent

Note

operations

sale

Balance as of April 1, 2022

¥

(8,735)

¥

61,327

¥ 135,274

¥

－

¥1,218,101

¥

483,876

¥ 1,701,977

Net income (loss)

－

－

－

－

6,987

(53,852)

(46,865)

Other comprehensive

33

8,204

55,173

77,090

－

77,090

35,402

112,492

income

Total comprehensive income

8,204

55,173

77,090

－

84,077

(18,450)

65,627

Issuance of new shares

27

－

－

－

－

222

－

222

Purchase of treasury shares

27

－

－

－

－

(6)

－

(6)

Disposal of treasury shares

27

－

－

－

－

0

－

0

Dividends

28

－

－

－

－

(42,514)

(13,962)

(56,476)

Changes resulting from

－

－

－

－

－

－

－

additions to consolidation

Changes resulting from loss

(8)

－

(513)

－

－

－

－

of control of subsidiaries

Change in interest due to

transactions with

37

－

－

－

－

(88,037)

(133,467)

(221,504)

non-controlling interests

Transfer from other

components of equity to

－

－

(13,672)

－

－

－

－

retained earnings

Others, net

－

－

－

－

(651)

－

(651)

Transfer to other

comprehensive

－

－

(349)

349

－

－

－

income associated with

assets held for sale

Transfer of negative

balance of other capital

－

－

－

－

－

－

－

surplus

Total transactions with owners

(8)

－

(14,534)

349

(130,986)

(147,429)

(278,415)

Balance as of March 31, 2023

¥

(539)

¥

116,500

¥ 197,830

¥

349

¥1,171,192

¥

317,997

¥ 1,489,189

6

Consolidated Statement of Cash Flows

Fiscal years ended March 31, 2024 and 2023

Millions of yen	Note		FY2023		FY2022
Cash flows from operating activities:		¥	(462,792)		¥	231
Income (loss) before taxes
Depreciation and amortization			157,522			167,957
Impairment losses	16		269,389			109,417
Share of (profit) loss of investments accounted for using the equity			57,398			6,797
method
		(22,139)			(18,730)
Interest and dividend income
Interest expenses			29,234			22,468
Restructuring costs			48,397			22,021
Changes in fair value of contingent consideration			1,562			(3,388)
(Gain) loss on sale of property, plant and equipment, and intangible			(1,215)			(5,226)
assets
		34,798			134,499
(Increase) decrease in trade receivables
(Increase) decrease in inventories			78,554			(79,887)
Increase (decrease) in trade payables			(32,251)			(63,628)
Increase (decrease) in unearned revenue			(11,543)			(13,717)
Increase (decrease) in provisions			(50,143)			(13,373)
Others, net			(67,240)			(88,340)
Subtotal			29,531			177,101
Interest and dividends received			26,812			25,265
Interest paid			(28,060)			(21,768)
Income taxes paid			(48,333)			(65,529)
Restructuring costs paid			(31,267)			(3,448)
Net cash provided by (used in) operating activities			(51,317)			111,621
Cash flows from investing activities:			(3,953)			6,546
Net (increase) decrease in securities
Purchase of property, plant and equipment, and intangible assets			(152,873)			(143,581)
Proceeds from sales of property, plant and equipment, and intangible			1,959			18,231
assets
		(1,019)			(17,174)
Purchase of investments in subsidiaries
Purchase of other financial assets			(5,273)			(7,692)
Proceeds from sales and redemption of other financial assets			97,963			42,974
Proceeds from collection of loan receivables	38		95			63,199
Increase in loan receivables	38		(67,825)			(1,728)
Proceeds from sale of subsidiaries			20,701			30,092
Others, net			(2,015)			(10,278)
Net cash provided by (used in) investing activities			(112,240)			(19,411)
Cash flows from financing activities:			26,405			100,959
Net increase (decrease) in short-term borrowings	21
Net increase (decrease) in commercial paper	21		29,000			35,000
Proceeds from long-term borrowings	21		67,113			66,141
Repayments of long-term borrowings	21		(39,083)			(109,130)
Proceeds from issuance of bonds	21		39,836			－
Redemption of bonds	21		(30,000)			－
Repayments of finance lease liabilities	21,22		(18,619)			(16,668)
Cash dividends paid	28		(19,639)			(42,484)
Cash dividends paid to non-controlling interests			(5,965)			(13,982)
Payments for acquisition of subsidiaries' interests from			－			(199,073)
non-controlling interests
		198			735
Others, net
Net cash provided by (used in) financing activities			49,246			(178,502)
Effect of exchange rate changes on cash and cash equivalents			28,736			27,842
Increase (decrease) in cash and cash equivalents			(85,575)			(58,450)
Cash and cash equivalents at the beginning of the year	8		305,844			365,429
Net increase (decrease) in cash and cash equivalents	13		(2,820)			(1,135)
resulting from transfer to assets held for sale
Cash and cash equivalents at the end of the period	8	¥	217,449		¥	305,844

7

Notes to Consolidated Financial Statements

Sumitomo Chemical Company, Limited and Consolidated Subsidiaries

For the Years ended March 31, 2024 and 2023 (Fiscal year 2023 and Fiscal year 2022)

1. Reporting Entity

Sumitomo Chemical Company, Limited (hereinafter, the "Company") is a company domiciled in Japan. The address of the Company's registered head office and main places of business are presented on the Company's website (URL https://www.sumitomo-chem.co.jp/english/).

The consolidated financial statements of the Company and its subsidiaries (hereinafter, the "Group") have a closing date as of March 31 and comprise the financial statements of the Group and the interests in associates and jointly controlled entities of the Group.

The Group is primarily involved in the manufacturing and sale of "Essential Chemicals & Plastics," "Energy & Functional Materials," "IT-related Chemicals," "Health & Crop Sciences" and "Pharmaceuticals." Details of these businesses are presented in Note 6 Segment Information.

2. Basis of Preparation

(1) Compliance with IFRS

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (hereinafter, "IFRS") issued by the International Accounting Standards Board. The provision of Article 93 of the Ordinance on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements applies, as the Company meets the requirements for a "Specified Company Applying Designated International Financial Reporting Standards" prescribed in Article 1-2 of said ordinance.

The Group's consolidated financial statements were approved on June 21, 2024 by Keiichi Iwata, Representative Director & President.

(2) Basis of measurement

The Group's consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments measured at fair value presented in Note 3 Material Accounting Policies.

(3) Functional currency and presentation currency

The Group's consolidated financial statements are presented in Japanese yen, which is the Company's functional currency, rounded to the nearest million yen.

8

3. Material Accounting Policies

(1) Basis of consolidation ○1 Subsidiaries

Subsidiaries are entities controlled by the Group. The Group has control over an entity if it has exposure or rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Accordingly, even in cases where the Group does not own the majority of voting rights of an entity, if the Group is deemed to effectively control its decision-making body, the entity is treated as a subsidiary.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which it is lost.

Subsidiaries' financial statements are adjusted, if necessary, when their accounting policies differ from those of the Group. All intergroup balances, transactions and unrealized gains and losses arising from intergroup transactions are eliminated in preparing the consolidated financial statements.

A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. Differences between adjusted non-controlling interest amounts and fair value of the considerations are recognized directly as equity attributed to owners of the parent. In the event of a loss of control, any gain or loss arising from a loss of control is recognized in profit or loss.

In the case when the closing date of a subsidiary is different from that of the Group, financial statements that are prepared provisionally as of the consolidated closing date are used for such subsidiaries.

○2 Associates and joint control arrangements

Associates are those entities in which the Group has significant influence over the financial and operating policies but does not have control or joint control. The Group is presumed to have significant influence over another when it holds at least 20% of the voting rights of that entity.

Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in joint control arrangements are classified as joint operations or joint ventures depending on the rights and obligations of the parties to the arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Investments in associates and equity interests in joint ventures are initially recognized at acquisition cost, and subsequently accounted for using the equity method. Investments in associates and joint ventures include goodwill identified on acquisition. If the Group holds an interest in a joint operation, the Group recognizes its share of the assets, liabilities, income and expenses generated from the joint operation.

Financial statements of associates, joint ventures and joint operations are adjusted, if necessary, when their accounting policies differ from those of the Group.

When it is impracticable to unify the closing date of associates, joint ventures and joint operations due to certain reasons, such as relationships with other shareholders, significant transactions or events between the closing date of the Group and that of the said entities' financial statements are reflected in the consolidated financial statements.

The Company assesses whether there is any indication that investments in associates and joint ventures may be impaired, and if there is an indication of impairment, the Company performs an impairment test. The recoverable amount is calculated using fair value, for which market price is used.

(2) Business combinations

The Group uses the acquisition method to account for business combinations. The consideration of acquisition is measured as the aggregate of the acquisition-date fair value of the assets transferred, liabilities assumed and equity securities issued by the Group in exchange for control of the acquiree.

Identifiable assets and liabilities of the acquiree, excluding the following items, are measured at their acquisition-date fair values.

・Deferred tax assets/liabilities, and assets/liabilities related to employee benefits;

9