This document has been translated from the Japanese original for the convenience of non-Japanese shareholders. In the event of any
discrepancy between this translation and the Japanese original, the original shall prevail.

Securities identification code: 8012
June 4, 2024

To our shareholders:Hiroyuki Ueshima
Representative Director and President

NAGASE & CO., LTD.
1-1-17, Shinmachi, Nishi-ku,
Osaka City, Osaka, Japan
2-6-4, Otemachi, Chiyoda-ku,
Tokyo, Japan (Tokyo Head Office)

NOTICE OF THE 109TH ANNUAL SHAREHOLDERS’ MEETING
You are cordially invited to attend the 109th Annual Shareholders’ Meeting of NAGASE & CO., LTD. (the“Company”), which will be held as described below.
When convening this shareholders’ meeting, the Company takes measures for providing information that
constitutes the content of reference documents for the shareholders’ meeting, etc. (items for which themeasures for providing information in electronic format are taken) in electronic format, and posts thisinformation on the Company’s website on the Internet. Please access the Company’s website mentioned
below to review the information.
Company’s website
https://www.nagase.co.jp/ir/stock-information/stockholders-meetings/ (in Japanese)

In addition to posting the items for which the measures for providing information in electronic format are
taken on the website above, the Company also posts this information on the website of Tokyo Stock
Exchange, Inc. (TSE). Please access the TSE website (Listed Company Search) by using the Internet
address shown below, enter the issue name (Nagase & Co.) or securities code (8012), and click “Search,”and then click “Basic information” and select “Documents for public inspection/PR information” to review
the information.
TSE website (Listed Company Search)https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)
For this shareholders’ meeting, we will deliver paper-based documents that contain the items for which themeasures for providing information in electronic format are taken to all shareholders, regardless of whether
or not they have requested the delivery of paper-based documents.
If you are unable to attend the meeting in person, you are kindly requested to exercise your voting rights inadvance by postal mail or via the Internet, etc. We request that you exercise your voting rights on or before
5:15 p.m. on Thursday, June 20, 2024 after considering the following Reference Documents for the Annual
Shareholders’ Meeting.

1

Meeting Details
1. Date and time:

Friday, June 21, 2024 at 10:00 a.m. (Reception begins at 9:00 a.m.)(Japan Standard Time)

2. Venue:

Nihonbashi Mitsui Hall
COREDO Muromachi 1 (Reception: 4th floor)
2-2-1, Nihonbashi-muromachi, Chuo-ku, Tokyo

3. Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 109th Term (from April 1, 2023 toMarch 31, 2024), as well as the results of audit of the Consolidated Financial Statements by the
Independent Auditor and Audit & Supervisory Board
2. Non-Consolidated Financial Statements for the 109th Term (from April 1, 2023 to March 31, 2024)
Items to be resolved:
Proposal 1:

Appropriation of surplus

Proposal 2:

Election of nine (9) Directors

Proposal 3:

Election of one (1) Audit & Supervisory Board Member

Proposal 4:

Election of one (1) substitute Audit & Supervisory Board Member

4. Instructions on exercising voting rights:
1. If you exercise your voting rights both in writing (by postal mail) and via the Internet, etc., yourvote via the Internet, etc. will be treated as the valid vote. If you exercise your voting rights via theInternet, etc. multiple times, the last vote will be treated as the valid vote.
2. Any voting form returned without indicating approval or disapproval for a particular proposal will
be counted as a vote for approval of the proposal.
3. If you exercise your voting rights by proxy, you may appoint as a proxy one of the shareholders
holding voting rights at the shareholders’ meeting. However, please note that a document verifying
the proxy right of the person representing you must be submitted.

2

5. Other matters relating to this Notice:Note regarding the shareholders’ meeting:Pursuant to laws and regulations and the provisions of the Articles of Incorporation, the following
items among the items for which the measures for providing information in electronic format are taken
are not included in this document.
Business Report: (1) Matters relating to share options for the Company’s stock, (2) Independent
Auditor, (3) Company systems and policies
Consolidated Financial Statements: (1) Consolidated Statement of Changes in Net Assets, (2) Notes toConsolidated Financial Statements
Non-Consolidated Financial Statements: (1) Non-Consolidated Statement of Changes in Net Assets,(2) Notes to Non-Consolidated Financial Statements
These items constitute part of the Consolidated Financial Statements and Non-Consolidated Financial
Statements audited by the Independent Auditor in preparing an accounting audit report, and part of theBusiness Report, Consolidated Financial Statements and Non-Consolidated Financial Statements
audited by Audit & Supervisory Board Members in preparing an audit report.
If any revisions are made to the items for which the measures for providing information in electronic format are
taken, a statement to that effect as well as information before and after the revisions will be posted on the
Company’s website and TSE’s website.

3

Reference Documents for the Annual Shareholders’ Meeting
Proposal 1:

Appropriation of surplus

The Company proposes the appropriation of surplus as follows:
Matters related to year-end dividend
The Company will pay dividends based on consolidated cash flow and investment status, with a basic
policy of “continuously increasing dividends” in consideration of consolidated performance andfinancial structure, while improving profitability and strengthening the corporate structure. For thisfiscal year, the Company proposes a year-end dividend of 40 yen per share, based on consideration of
its consolidated results, financial conditions and other matters.
(1) Type of dividend property
Cash(2) Allocation of dividend property and total amount thereof
40 yen per common shares of the Company
Total amount of dividends: 4,562,146,800 yen(3) Effective date of distribution of dividends of surplus
June 24, 2024

4

[Reference]
Matters relating to shareholder returns(1) Shareholder returns policy under the Medium-term Management Plan ACE 2.0 (from fiscal 2021 to
fiscal 2025)
The Company resolved at the Board of Directors meeting held on May 8, 2024 to change its shareholder
returns policy to “total return ratio of 100%” as a tentative measure for two years until fiscal 2025, whichis the final year of ACE 2.0, to achieve ROE of 8.0% or higher, a quantitative target under ACE 2.0.
We will pay dividends based on consolidated cash flow and investment status, with a basic policy of“continuously increasing dividends” in consideration of consolidated performance and financial structure,
while improving profitability and strengthening the corporate structure, as set out previously.
We previously set the amount of strategic cross-shareholdings sold during the period of ACE 2.0 as
the limitation on the amount of repurchases of treasury stock. However, under the policy above, we will
repurchase treasury stock in a flexible manner, while keeping efficiency in mind.
(2) Repurchases of treasury stock
The Company repurchased treasury stock as follows.
Total number of shares acquired
Total value of acquisition value
Acquisition period
Acquisition method

3,359,600 shares of common shares
7,999,897,300 yen
From May 10, 2023 to December 22, 2023
Purchased on the market

In addition, the Company decided on the repurchase and cancellation of treasury stock at the Board of
Directors meeting held on May 8, 2024 as follows.
• Repurchase of treasury stock
5,500,000 shares (maximum) of common shares(4.82% of the total number of issued shares(excluding treasury stock))
10 billion yen (maximum)
From May 9, 2024 to October 31, 2024
Purchase from the market

Total number of shares to be acquired
Total value of shares to be acquired
Acquisition period
Acquisition method• Cancellation of treasury stock

3,000,000 shares of common shares (2.54% of thetotal number of issued shares (including treasury
stock))
May 31, 2024

Number of shares to be canceled
Date of cancellation5

Proposal 2:

Election of nine (9) Directors

The terms of office of all eight Directors will expire at the conclusion of this meeting. Accordingly, inorder to further strengthen the Company’s management structure, the proposal is for the election of nine
Directors (including three Outside Directors), increasing the number of Directors by one.
<Reason for increasing the number of Directors by one>
In promoting the growth strategy of the ACE 2.0 Medium-term Management Plan aimed at improvementof corporate value, it is necessary for the Company to strengthen Base Areas, led by the chemical industry
field, and carry out research and development of distinctive proprietary products and technologies in
Growth Areas. In order to realize them, we have added an individual who possesses high-level knowledgeof and experience in research and development as well as businesses including the chemical industry field
to the candidates. In addition, we reduced the number of Directors to eight Directors (including three
Outside Directors) from nine Directors (including three Outside Directors) at the Annual Shareholders’Meeting held on June 20, 2023. Accordingly, the Company requests the election of nine Directors(including three Outside Directors) from the perspectives of promoting management policies and strategies
and maintaining a governance system.
The candidates for Directors are as follows:
To increase objectivity and transparency of nominations for Directors and Executive Officers, theCompany established a Nomination Committee consisting of a majority of Independent Outside Directors.
The aforementioned Nomination Committee is also reviewing the contents of this proposal.

No.

Name

GenderPosition in the Company

Attendance ofBoard of Directors
meetings(fiscal year ended
March 31, 2024)

Number of otherlisted companies
where concurrent
positions are held

16 out of 16 (100%)

1

1Kenji Asakura[Reelection][Inside Director]

Male

2

Hiroyuki Ueshima[Reelection][Inside Director]

Male

Representative Director, President
and CEO

16 out of 16 (100%)03

Masaya Ikemoto[Reelection][Inside Director]

Male

Representative Director, Senior
Managing Executive Officer

16 out of 16 (100%)04Masatoshi Kamada[Reelection][Inside Director]

Male

Director, Managing Executive
Officer

16 out of 16 (100%)

05

Hiroshi Nagase[Reelection][Inside Director]

Male

Director, Senior Advisor

16 out of 16 (100%)0

Ritsuko Nonomiya[Reelection][Outside Director][Independent
officer]

FemaleOutside Director

16 out of 16 (100%)

1

Noriaki Horikiri[Reelection][Outside Director][Independent
officer]

Male

Outside Director

16 out of 16 (100%)

1

Male

Outside Director

12 out of 12 (100%)

0

Male

Executive Officer

-

0

6

7

Representative Director, Chairman[Reelection]
8

Toshiaki Mikoshiba

9

Tamotsu Isobe[Outside Director][Independent
officer][New election][Inside Director]

Notes:
1. The number of the Board of Directors meetings does not include resolutions made in writing. The number of Board of
Directors meetings indicated with regard to attendance at meetings by Toshiaki Mikoshiba are the number of meetings
since he was elected as Director.
2. The number of other listed companies where concurrent positions are held refers to the number of listed companies otherthan the Company, where the candidate holds a directorial position.

6

No.

Name
(Date of birth)[Inside Director] [Reelection]

Kenji Asakura

Career summary, position, responsibilities andsignificant concurrent positions outside the Company
April 1978

Joined the Company

October 2006

General Manager of Automotive Solutions Dept.

April 2009

Executive Officer and General Manager of Automotive
Solutions Dept.

June 2013

Director, Executive Officer

April 2015

Representative Director, President and CEO

April 2023

Representative Director, Chairman (present position)(December 11, 1955)

1

Length of service: 11 years (as ofconclusion of this meeting)Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 31,741[Significant concurrent positions outside the Company]
Outside Director of Japan Tobacco Inc.
Reason for nomination as candidate for Director
Kenji Asakura has worked mainly in the electronics & energy, mobility, andmanagement planning fields since joining the Company and has a charactersuitable as a manager of the Company. In addition, he has served as President
from 2015 to 2022. In light of his extensive experience in operations and his
knowledge in overall management in the Company, Mr. Asakura is nominatedas a candidate for Director.

7

No.

Name
(Date of birth)[Inside Director] [Reelection]

Hiroyuki Ueshima(November 5, 1965)
Length of service: Two years (as ofconclusion of this meeting)2

Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 24,879

Career summary, position, responsibilities andsignificant concurrent positions outside the Company
April 1988

Joined the Company

April 2015

General Manager of Corporate Planning Div.

April 2017

Executive Officer and General Manager of Corporate Planning
Div.

October 2017

Executive Officer and General Manager of Automotive
Solutions Dept.

June 2022

Director, Executive Officer

April 2023

Representative Director, President and CEO (present position)[Significant concurrent positions outside the Company]
None
Reason for nomination as candidate for Director
Hiroyuki Ueshima has worked mainly in the functional materials, electronics& energy, mobility, and management planning fields since joining theCompany, and has a personality suitable for being a part of the Company’s
management team. He was appointed as Representative Director and President
in April 2023. Since then, he has promoted improvement of the corporate
value of the Company. He is considered the most qualified person who canshow leadership towards executing the ACE 2.0 Medium-termManagement Plan, and achieving sustainable growth of the Group and further
improvement of the corporate value because he has extensive experience inoperations and knowledge of overall management. Accordingly, Mr. Ueshima
is nominated as a candidate for Director.

8

No.

Name
(Date of birth)[Inside Director] [Reelection]

Masaya Ikemoto(September 20, 1961)

Career summary, position, responsibilities andsignificant concurrent positions outside the Company
April 1984

Joined the Company

April 2013

General Manager of Automotive Solutions Dept.

April 2015

Executive Officer and General Manager of Automotive
Solutions Dept., Manager of Nagoya Branch

June 2018

Director, Executive Officer

April 2021

Representative Director, Managing Executive Officer

April 2023

Representative Director, Senior Managing Executive Officer

April 2024

Representative Director, Senior Managing Executive Officer, incharge of Corporate Administration (present position)

Length of service: Six years (as ofconclusion of this meeting)3

Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 13,174[Significant concurrent positions outside the Company]
None
Reason for nomination as candidate for Director
Masaya Ikemoto has worked mainly in the advanced materials & processing,electronics & energy, mobility, and management planning fields since joining
the Company and has a character suitable for being a part of the Company’s
management team. In addition, he was appointed as Director in 2018. Since
then, he has promoted improvement of the corporate value of the Company as
an officer mainly in charge of Corporate Administration. In light of his
extensive experience in operations and his knowledge in overall management,
Mr. Ikemoto is nominated as a candidate for Director towards the achievementof the ACE 2.0 Medium-term Management Plan.

9

No.

Name
(Date of birth)[Inside Director] [Reelection]

Masatoshi Kamada

Career summary, position, responsibilities andsignificant concurrent positions outside the Company
April 1985

Joined the Company

April 2011

General Manager of Electronic Materials Dept.

April 2013

Executive Officer and General Manager of Electronic Materials
Dept.

April 2018

Executive Officer and Greater China CEO

June 2021

Director, Executive Officer

April 2024

Director, Managing Executive Officer, in charge of Advanced
Materials & Processing, Electronics & Energy, Mobility, andAsia (Greater China, ASEAN, India, and Korea) (present
position)(August 6, 1961)

4

Length of service: Three years (as ofconclusion of this meeting)Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 15,515[Significant concurrent positions outside the Company]
None
Reason for nomination as candidate for Director
Masatoshi Kamada has worked in the advanced materials & processing,electronics & energy, and overseas business fields since joining the Company,
possesses superb knowledge of and experience in these fields, and has apersonality suitable for being a part of the Company’s management team. In
light of his management skills gained through various experience, including asa China area manager, Mr. Kamada is nominated as a candidate for Director.

10

No.

Name
(Date of birth)[Inside Director] [Reelection]

Hiroshi Nagase(July 18, 1949)
Length of service: 35 years (as ofconclusion of this meeting)5

Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 2,060,832

Career summary, position, responsibilities andsignificant concurrent positions outside the Company
April 1977

Joined the Company

April 1988

General Manager of Plastics Dept. 2

June 1989

Director

June 1995

Managing Director

June 1997

Representative Director, Senior Managing Director

June 1999

Representative Director and President

June 2001

Representative Director and President and CEO

April 2015

Representative Director and Chairman

April 2023

Director, Senior Advisor (present position)[Significant concurrent positions outside the Company]
None
Reason for nomination as candidate for Director
Hiroshi Nagase has worked mainly in the advanced materials & processing,electronics & energy, and management planning fields since joining theCompany and has the character suitable for being a part of the Company’s
management team. In addition, he has served as President and Chairman from1999 to 2022. In light of his extensive experience in operations and his
knowledge of overall management in the Company, Mr. Nagase is nominatedas a candidate for Director.

11

No.

Name
(Date of birth)

Career summary, position, responsibilities andsignificant concurrent positions outside the Company[Outside Director] [Reelection][Independent officer]

September 1987 Joined Peat, Marwick, Mitchell & Company (currently KPMG
LLP)
April 1997

Partner of KPMG Corporate Finance K.K.

November 2000 Joined UBS Warburg Japan (currently UBS Securities Japan
Co., Ltd.)

Ritsuko Nonomiya

January 2005

M&A Advisor, Managing Director of UBS Warburg Japan

July 2008

Senior Vice President and Business Development Leader of GE
Capital Asia Pacific Ltd.

April 2013

Senior Executive Officer and Business Development Leader of
GE Capital Japan, GE Japan Inc. (currently General ElectricCompany)(November 28, 1961)
Length of service: Four years (as ofconclusion of this meeting)Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 2,344

December 2013 Managing Director of GCA Savvian Corporation (currently
GCA Corporation)
March 2017

Director of GCA Corporation (present position)

June 2020

Director of the Company (present position)

February 2022

Representative Director and CEO of Houlihan Lokey Japan
Co., Ltd. (present position)[Significant concurrent positions outside the Company]
Representative Director and CEO, Houlihan Lokey Japan Co., Ltd.
External Audit & Supervisory Board Member, Shiseido Company, Limited
Reason for nomination as candidate for outside Director, and outline of
expected roles
Ritsuko Nonomiya has accumulated business experience, including auditing,in the KPMG Group and has engaged in M&A and business development in
the UBS Group and the GE Group. Thus, she has advanced knowledge mainlyin the fields of finance and accounting. Also, she has experience of global
management in Houlihan Lokey Group, and possesses sufficient knowledge
and experience regarding corporate management. She will use this knowledge
and experience to make proposals concerning the Company’s overallmanagement and is expected to enhance the corporate governance of theGroup, whose overseas business operations are expanding. Accordingly, werequest that Ms. Nonomiya be elected as outside Director. If the proposal ispassed, she is expected to participate in the deliberations of the Company’s
Board of Directors, Compensation Committee, Nomination Committee, etc.
from an objective and neutral standpoint.

6

Special notes concerning candidate for outside Director
The Company has the following business relationships with the entity at which the candidate holds a concurrent
position.
Company
namePositionTransactions

SellerPurchaser

Ratio oftransaction
amountCompared with

Shiseido
Company,
LimitedExternal
Audit &
Supervisory
Board
MemberSale ofgoods

The Company

Shiseido
Company,
Limited

Below
0.5%

Net sales of the Company

12

No.

Name
(Date of birth)

Career summary, position, responsibilities andsignificant concurrent positions outside the Company[Outside Director] [Reelection][Independent officer]

Noriaki Horikiri(September 2, 1951)
Length of service: Two years (as ofconclusion of this meeting)Attendance of Board of Directors
meetings: 16 out of 16 Board of
Directors meetings (100%)
Number of the Company’s shares
held: 1,781

April 1974

Joined Kikkoman Shoyu Co., Ltd. (currently Kikkoman
Corporation)

June 2003

Corporate Officer

June 2006

Executive Corporate Officer

June 2008

Director and Executive Corporate Officer

June 2011

Representative Director and Senior Executive Corporate
OfficerJune 2013

Representative Director, President and Chief Executive Officer

June 2021

Representative Director, Chairman and Chief Executive Officer

June 2022

Director of the Company (present position)

June 2023

Representative Director and Chairman of Kikkoman
Corporation (present position)[Significant concurrent positions outside the Company]
Representative Director and Chairman, Kikkoman Corporation
Reason for nomination as candidate for outside Director, and outline of
expected roles
Noriaki Horikiri has been involved in management of Kikkoman Corporation
for many years and possesses advanced knowledge and extensive experience
regarding corporate management. He will use this knowledge and experience
to make proposals concerning the Company’s overall management including
overseas development and manufacturing activities, and is expected toenhance the Group’s corporate governance. Accordingly, we request that Mr.
Horikiri be elected as outside Director. If the proposal is passed, he isexpected to participate in the deliberations of the Company’s Board of
Directors, Compensation Committee, Nomination Committee, etc. from an
objective and neutral standpoint.

7

Special notes concerning candidate for outside Director
The Company has the following business relationships with the entity at which the candidate holds a concurrent
position.
Company
nameKikkoman
Corporation

PositionTransactions

Representative
Sale ofDirector andgoods
ChairmanSellerPurchaser

Ratio oftransaction
amountCompared with

Kikkoman
Corporation

The Company

Below
0.1%

Amount of purchases of
the Company

13

No.

Name
(Date of birth)

Career summary, position, responsibilities andsignificant concurrent positions outside the Company[Outside Director] [Reelection][Independent officer]

April 1980

Joined Honda Motor Co., Ltd.

April 2008

Executive Officer and Director/Vice President of Honda Motor
Europe Limited

April 2011

President, Guangqi Honda Automobile Co., Ltd.

April 2014

Managing Officer, Chief Officer for Regional Operations(Europe Region), Honda Motor Co., Ltd., and President andDirector, Honda Motor Europe Limited

Toshiaki Mikoshiba

April 2015

Senior Managing Officer, Honda Motor Co., Ltd.

(November 15, 1957)

April 2016

Chief Officer for Regional Operations (North
America), Honda Motor Co., Ltd., and President and CEO,
Honda North America, Inc.

Attendance of Board of Directors
meetings: 12 out of 12 Board of
Directors meetings (100%)

June 2017

Senior Managing Director, Honda Motor Co., Ltd.

April 2019

Chairman, Honda Motor Co., Ltd.

Number of the Company’s shares
held: 325

June 2023

Director of the Company (present position)

Length of service: One year (as ofconclusion of this meeting)[Significant concurrent positions outside the Company]
None

8

Reason for nomination as candidate for outside Director, and outline of
expected roles
Toshiaki Mikoshiba has been involved in management of Honda Motor Co.
Ltd. for many years and possesses advanced knowledge and extensive
experience regarding corporate management. He will use this knowledge andexperience to make proposals concerning the Company’s overall management
including overseas development and sales domain, and is expected to enhance
the Group’s corporate governance. Accordingly, we request that Mr.
Mikoshiba be elected as outside Director. If the proposal is passed, he isexpected to participate in the deliberations of the Company’s Board of
Directors, Compensation Committee, Nomination Committee, etc. from an
objective and neutral standpoint.
Special notes concerning candidate for outside Director
Toshiaki Mikoshiba is former Chairman of Honda Motor Co. Ltd., and the Company has the following business
relationships with the entity.
Company
namePositionTransactions

SellerPurchaser

Ratio oftransaction
amountCompared with

Honda Motor
Co. Ltd.

FormerChairman

Sale ofgoods

The Company

Honda Motor
Co. Ltd.

Below
0.1%

Net sales of the Company

14

No.

Name
(Date of birth)[Inside Director] [New election]

Career summary, position, responsibilities andsignificant concurrent positions outside the Company
April 1992

Joined the Company

April 2012

COO of Nagase (Malaysia) Sdn. Bhd.

April 2017

General Manager of Performance Chemicals Dept.

September 2021 General Manager of Performance Chemicals Dept. and General
Manager of Nagase Application Workshop
April 2023

Executive Officer and General Manager of Performance
Chemicals Dept.

April 2024

Executive Officer, in charge of Functional Materials, Life &Healthcare, Business Development, Europe and Americas, andOsaka Area

Tamotsu Isobe(April 2, 1967)
Number of the Company’s shares
held: 6,963

9[Significant concurrent positions outside the Company]
None
Reason for nomination as candidate for Director
Tamotsu Isobe has worked in the functional materials, electronics & energy,
and overseas business fields since joining the Company, possesses superb
knowledge of and experience in these fields, and has a personality suitable forbeing a part of the Company’s management team. In light of his management
skills gained through various experience, including as a general manager ofbusiness department, Mr. Isobe is nominated as a candidate for Director.

Notes:
1.

Ritsuko Nonomiya, Noriaki Horikiri, and Toshiaki Mikoshiba are candidates for outside Director specified in Article 2,
item (15) of the Companies Act and are independent officers pursuant to the regulations of financial instruments
exchanges.

2.

There are no special interests between the candidates and the Company.

3.

Agreement limiting liability
Pursuant to the Articles of Incorporation, the Company has entered into an agreement with outside Directors Ritsuko
Nonomiya, Noriaki Horikiri, and Toshiaki Mikoshiba, limiting liability to the Company for damage to a certain degree.
If this proposal is approved, the Company plans to renew the agreement under the same terms. A summary of theagreements is as follows:
If the Company incurs damage as a result of the failure of the outside Director to perform his or her duties, as long as theoutside Director performed his or her duties in good faith and without gross negligence, the liability for damage that theoutside Director shall owe to the Company shall be limited to the minimum amount of liability specified in Article 425,
paragraph (1) of the Companies Act.

4.

Directors and officers liability insurance contract
The Company’s Directors are covered by directors and officers liability insurance. Under this insurance policy, 10% of
insurance premiums applicable to an indemnity rider covering shareholder representative lawsuits are paid by the
insured persons, and 90% are paid by the Company. If each candidate is elected as a Director and assumes the office,they will be the insured persons under this insurance policy. Covered insurance events are third-party lawsuits,
shareholder representative lawsuits, etc. In addition, the maximum total amount of insurance has been set, and officers
responsible for an insurance event are required to individually pay for a certain portion of the damage incurred so thatthe appropriateness of their duties is not compromised. When renewing this insurance, the Company will choose similar
policy provisions.

5.

The number of Board of Directors meetings does not include resolutions made in writing. The numbers of Board of
Directors meetings indicated with regard to attendance at meetings by Toshiaki Mikoshiba are the number of meetings
since he was elected as Director.

6.

Shares of the Company held by each candidate include shares nominally held by NAGASE & CO., LTD. Officer’s
Shareholding Association and NAGASE & CO., LTD. Own Share Investment Association.

15

[Reference]
Matters relating to cross-shareholdings(1) Policy regarding cross-shareholdings
The Company may hold securities as cross-shareholdings where it is considered necessary, when taking
into consideration the maintenance and strengthening of trading relationships as well as its businessstrategies, among other things, in order to achieve sustainable improvement of corporate value of theGroup.
With regards to the reasonableness of such holdings, relevant departments scrutinize whether theprospect of business expansion and synergies can be expected, or services essential to the corporate
activities of the Group can be secured stably based on the income from related transactions and earning
status and from dividends received. The results are confirmed by the Board of Directors each year.
Where it is not found reasonable to hold securities, the Company has been working to sell securities inphases to reduce the holdings, while taking into considerable various factors.
(2) Reduction policy under the Medium-term Management Plan
Under our Medium-term Management Plan ACE 2.0 (from fiscal 2021 to fiscal 2025), the Company
intends to further reduce cross-shareholdings with the aim of improving capital efficiency andenhancing governance. We have set the target of reducing 30 billion yen during the period of ACE
2.0.
(3) Status of cross-shareholdings

Number of securities (securities)

Total amount on the balance sheet (million yen)

107th term
Fiscal 2021

108th term
Fiscal 2022

109th term
Fiscal 2023

Listed85

78

67

Non-listed

52

54

53

Total

137

132

120

Listed59,371

54,74059,737

Non-listed

3,863

2,194

2,024

63,23556,93561,761

Net assets (million yen)

Total

355,092

378,388

401,315

Ratio of listed stock to net assets

16.7%

14.5%

14.9%

Ratio to net assets

17.8%

15.0%

15.4%

During fiscal 2023, the Company worked on reduction in accordance with the policy described in (2)above to sell 17 securities worth 7.1 billion yen.(Note 1) The securities newly acquired as crossshareholdings are one non-listed security worth 30 million yen.
Note 1: Including securities some of whose shares held have been sold.

16

Proposal 3:

Election of one (1) Audit & Supervisory Board Member

The term of office of Nobuyuki Shirafuji, the Audit & Supervisory Board Member, will expire at theconclusion of this meeting, and he will retire from the Company. Accordingly, the proposal is for theelection of one Audit & Supervisory Board Member. The Audit & Supervisory Board has given its consent
to this proposal.
The candidate for Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Career summary, position andsignificant concurrent positions outside the Company[Outside Audit & Supervisory Board April 1992
Member] [New election][Independent officer]

Masaya Ishida(January 10, 1970)
Number of the Company’s shares
held: 0Joined Sumitomo Bank (currently Sumitomo Mitsui Banking
Corporation (“SMBC”))

April 2009

Head of Sales Promotion Group, Hibiya Corporate Banking No.2 Office

April 2010

Group Head, Human Resources Dept.

August 2011

Group Head, Americas Business No. 1 Dept.

April 2014

Deputy General Manager, Americas Business No.1 Dept.

April 2016

Deputy General Manager, Tokyo Corporate Banking No. 5 Dept.

April 2018

General Manager, Fukuoka Corporate Banking No. 2 Office

April 2020

General Manager, Hamamatsucho Corporate Banking Office

April 2022

General Manager, Hiroshima Corporate Banking Office

April 2024

Retired from SMBC

[Significant concurrent positions outside the Company]
None
Reason for nomination as candidate for outside Audit & Supervisory Board
MemberMasaya Ishida has never been directly involved in management, however he has
considerable knowledge in finance and accounting based on his wide range ofexperience in Japan and overseas over many years at a financial institution.
Accordingly, we expect Mr. Ishida to perform the duties of outside Audit &Supervisory Board Member appropriately and request his election.
Special notes concerning candidate for outside Audit & Supervisory Board Member
Masaya Ishida does not have any personal relationships, capital relationships,
transactional relationships, or other interests with the Company. Mr. Ishida worked for
Sumitomo Mitsui Banking Corporation, one of the Company’s banks, but no longer
works for the bank. As of the end of March 2024, the Group had an outstanding loan
from the bank for 36,199 million yen (4.57% of consolidated total assets), butshareholders’ equity ratio of the Company is high, its finances are sound, and its degreeof dependence on loans from financial institutions is low, and accordingly, a
determination was made that the loan is not significant enough to give rise to a special
relationship. The Company believes that there is no likelihood of a conflict of interests
between Mr. Ishida and general shareholders arising from his status as an outside Audit& Supervisory Board Member.
Notes:
1.

Masaya Ishida is a candidate for outside Audit & Supervisory Board Member specified in Article 2, item (16) of theCompanies Act, and the Company plans to file notice as an independent officer pursuant to the regulations of financial
instruments exchanges.

2.

Agreement limiting liability
If Masaya Ishida, a candidate for new outside Audit & Supervisory Board Member, is elected, pursuant to the Articles ofIncorporation, the Company plans to enter into an agreement with him, limiting liability to the Company for damage to acertain degree. A summary of the agreements is as follows:17

If the Company incurs damage as a result of the failure of the outside Audit & Supervisory Board Member to perform
his or her duties, as long as the outside Audit & Supervisory Board Member performed his or her duties in good faithand without gross negligence, the liability for damage that the outside Audit & Supervisory Board Member shall owe to
the Company shall be limited to the minimum amount of liability specified in Article 425, paragraph (1) of theCompanies Act.
3.

Directors and officers liability insurance contract
The Company’s Audit & Supervisory Board Members are covered by directors and officers liability insurance. Under
this insurance policy, 10% of insurance premiums applicable to an indemnity rider covering shareholder lawsuits arepaid by the insured persons, and 90% are paid by the Company. If the candidate is elected as an Audit & Supervisory
Board Member and assumes the office, he will be the insured person under this insurance policy. Covered insurance
events are third-party lawsuits, shareholder lawsuits, etc. In addition, the maximum total amount of insurance has beenset, and officers responsible for an insurance event are required to individually pay for a certain portion of the damage
incurred so that the appropriateness of job execution can be maintained. When renewing this insurance, the Company
will choose similar policy provisions.

18[Reference]
Roles and expertise of Directors and Audit & Supervisory Board Members upon the approval of
Proposals 2 and 3
Roles particularly expected of Directors and Audit & Supervisory Board Members are as below.
Some changes to the skill items were made in fiscal 2024 to further clarify strategic roles expected of
Directors.
Position

Name

Corporate
management

Globalbusiness

Marketing/
Sales

Representative
Director and Chairman

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

R&D

Production/ Finance andQualityaccounting

Legal affairs/ Human
resource Sustainability
Riskmanagement management

DX

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Kenji Asakura
Representative
Director and President✓✓

Hiroyuki Ueshima
Representative
Director✓✓

Masaya Ikemoto
Director

Masatoshi Kamada
Director

Tamotsu Isobe
Director, Senior
Advisor✓✓Hiroshi Nagase
Outside Director

Ritsuko Nonomiya
Outside Director

Noriaki Horikiri
Outside Director

Toshiaki Mikoshiba

✓

✓

✓

✓

✓

✓

✓
✓
✓

Audit & Supervisory
Board Member

✓

✓

✓

✓

✓

✓

✓

✓

Masanori Furukawa
Audit & Supervisory
Board Member

Akira Takami
Outside Audit &Supervisory Board
MemberMasaya Ishida
Outside Audit &Supervisory Board
MemberGan Matsui

19✓Proposal 4:

Election of one (1) substitute Audit & Supervisory Board Member

The Company proposes to elect one substitute Audit & Supervisory Board Member to prepare for acontingency in which the Company does not have the number of Audit & Supervisory Board Members
required by laws and regulations. The Audit & Supervisory Board has given its consent to this proposal.
The candidate for substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Career summary, position andsignificant concurrent positions outside the Company[Outside Audit & Supervisory
Board Member] [Reelection][Independent officer]

April 1979

Joined Tokyo Regional Taxation Bureau

April 1988

Primary Investigator, Special Investigative Squad, Tokyo District Public
Prosecutors Office

Takao Muramatsu

July 1991

Investigator, Large Enterprise and Criminal Investigation Department,
National Tax Agency

July 1998

Senior Investigator, Large Enterprise and Criminal Investigation
Department, National Tax Agency

July 2003

District Director, Shibuya Tax Office

July 2005

Chief Investigator, Criminal Investigation Department, Tokyo Regional
Taxation Bureau

July 2009

Chief Internal Inspector, Osaka Regional Taxation Bureau

July 2010

Chief Internal Inspector, National Tax Agency

July 2012

Assistant Regional Commissioner (Planning and Administration),
Nagoya Regional Taxation Bureau

June 2013

Regional Commissioner, Takamatsu Regional Taxation Bureau

October 2014

Registered as certified tax accountant
President, Muramatsu Tax Accountant Office (present position)(October 1, 1953)
Number of the Company’s shares
held: 0[Significant concurrent positions outside the Company]
Outside Director and Audit & Supervisory Board Member, BESTERRA CO., LTD.
Outside Audit & Supervisory Board Member, SERENDIP HOLDINGS CO., LTD.
Outside Director and Audit & Supervisory Board Member, GLOBERIDE, Inc.
President, Muramatsu Tax Accountant Office
Reason for nomination as candidate for substitute outside Audit & Supervisory Board Member
Takao Muramatsu does not have direct managerial experience, but he has held a number of important posts in Regional
Taxation Bureaus. Based on his high degree of specialization relating to taxes and corporate accounting and experience
as Audit & Supervisory Board Member of other companies, we have determined that he will properly perform his duties
as outside Audit & Supervisory Board Member, and we request his election.
Special notes concerning candidate for substitute outside Audit & Supervisory Board Member
The Company has the following business relationships with the entity at which the candidate holds a concurrent position.
Company
namePositionTransactions

SellerPurchaser

Ratio oftransaction
amountCompared with

SERENDIP
HOLDINGS
CO., LTD.

Outside Audit &Supervisory
Board Member

Sale ofgoods

The Company

SERENDIP
HOLDINGS
CO., LTD.

Below
0.1%

Net sales of the Company

GLOBERIDE,Inc.

Outside Directorand Audit &Supervisory
Board Member

Sale ofgoods

The Company

GLOBERIDE,
Inc.

Below
0.1%

Net sales of the Company

20Notes:1. There are no special interests between Takao Muramatsu and the Company.
2.

Takao Muramatsu is a candidate for substitute outside Audit & Supervisory Board Member, and if he is elected as
outside Audit & Supervisory Board Member, the Company plans to file notice as an independent officer pursuant to theregulations of financial instruments exchanges.

3.

Agreement limiting liability
If the candidate is elected as substitute outside Audit & Supervisory Board Member and assumes the office of outside
Audit & Supervisory Board Member, the Company plans to enter into an agreement pursuant to the Articles ofIncorporation limiting liability to the Company for damage to a certain degree. A summary of the agreement is asfollows:
If the Company incurs damage as a result of the failure of the outside Audit & Supervisory Board Member to perform
his duties, as long as the outside Audit & Supervisory Board Member performed his duties in good faith and withoutgross negligence, the liability for damage that the outside Audit & Supervisory Board Member shall owe to theCompany shall be limited to the minimum amount of liability specified in Article 425, paragraph (1) of the Companies
Act.

4.

Directors and officers liability insurance contract
The Company’s Audit & Supervisory Board Members are covered by directors and officers liability insurance. Under
this insurance policy, 10% of insurance premiums applicable to an indemnity rider covering shareholder lawsuits arepaid by the insured persons, and 90% are paid by the Company. If the candidate is elected as substitute outside Audit &Supervisory Board Member and assumes the office of outside Audit & Supervisory Board Member, he will be theinsured person under this insurance policy. Covered insurance events are third-party lawsuits, shareholder lawsuits, etc.
In addition, the maximum total amount of insurance has been set, and officers responsible for an insurance event are
required to individually pay for a certain portion of the damage incurred so that the appropriateness of job execution canbe maintained. When renewing this insurance, the Company will choose similar policy provisions.

21

Business Report (April 1, 2023 to March 31, 2024)
1.
NAGASE Group business conditions(1)

Development and results of business operations

The global economy during the current fiscal year faced concerns about economic slowdown due to factors
including the prolonged conflicts in Ukraine and the Middle East, inflation in Europe and the U.S. andresulting continued monetary tightening, and the sluggish real estate market in China.
Among the regions where the NAGASE Group conducts business, the economy in Greater China slowed
down with the stagnation in the real estate market pushing down private consumption. In the Americas,
price increases continued, but at a slower pace, and economic recovery is expected to continue due to an
expansion in private consumption and an increase in employment. In ASEAN, the economies have been ona solid trend, led by domestic and inbound demand. In Japan, continued economic recovery is expected due
to an improvement in real wages, firm corporate capital investment, and continued inbound demand,
despite downward pressures including sharp fluctuations in exchange rates due to higher interest rates
resulting from the discontinuation of the negative interest rate policy and geopolitical risks, andincreasingly budget-minded consumer spending.
In such environment, the Group’s earnings during the current fiscal year were as below.
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

(Millions of yen)

(Millions of yen)

Gross profit

155,410

164,719

9,309

6.0%

Operating income

33,371

30,618(2,753)(8.2)%

Ordinary income

32,52830,591(1,937)(6.0)%Net income attributable to ownersof the parent

23,62522,402(1,222)(5.2)%

Year on year
(Millions of yen)(%)

- In terms of performance in the current fiscal year, gross profit increased mainly due to a weaker yen.
- Operating income decreased due to an increase in selling, general and administrative expenses, despite anincrease in gross profit. For details, see Overview by Segment.
- Net income attributable to owners of the parent amounted to 22.4 billion yen, down 1.2 billion yen,despite a decrease in loss on valuation of investments in securities.

22

Overview by Segment
The following describes performance by segment.
Note that as of October 1, 2023 of the current fiscal year under review, the categorizations for reportablesegments have been partially amended. Year-on-year amounts and ratios for the previous fiscal year are
calculated after rearranging reportable segment classifications to match those of the current fiscal year.
*For the details of the changes in business segmentation, please refer to (Segment Information Etc.) on
page 16 of “Consolidated Financial Statements for the Fiscal Year Ended March 31, 2024” announced on
May 8, 2024 (in Japanese).
<Functional Materials>
Gross profit
28.1 billion yen (down 5.9% from the previous fiscal year)
The major factors behind performance were as follows.
- Sales decreased for coating materials.
- Sales decreased for raw materials for the electronics industry, including semiconductor-related products- Sales of digital print processing materials were lower, as was profitability in the manufacturing business- Operating income decreased due to a decrease in gross profit<Advanced Materials & Processing>
Gross profit
23.6 billion yen (down 2.6% from the previous fiscal year)
The major factors behind performance were as follows.
- Sales of resin declined due to lower demand in the office equipment, appliance, and video game device
market and the impact of inventory adjustments by customers- Operating income decreased due to a decrease in gross profit<Electronics & Energy>
Gross profit
34.2 billion yen (up 11.2% from the previous fiscal year)
The major factors behind performance were as follows.
- Despite weakening semiconductor market conditions, sales of materials to the semiconductor industry
increased due to product line expansion- Sales increased due to higher demand for formulated epoxy resins, mainly for semiconductors forserver applications and mobile device applications- Sales increased for photolithography materials for display applications- Operating income increased due to an increase in gross profit<Mobility>
Gross profit
15.2 billion yen (up 5.6% from the previous fiscal year)
The major factors behind performance were as follows.

23

- Sales increased for resins, mainly due to boosted automobile production and expanded market shareamong existing customers.
- Sales increased for functional materials and functional components for interior and exterior fittings andelectrification- Operating income increased due to an increase in gross profit<Life & Healthcare>
Gross profit
63.4 billion yen (up 13.5% from the previous fiscal year)
The major factors behind performance were as follows.
- Overall Prinova Group sales increased due to operations of the new plant in Utah
- Sales of Nagase Viita Co., Ltd. (changed its trade name from Hayashibara Co., Ltd. effective April 1,2024) increased mainly in cosmetics materials- Sales increased for pharmaceutical raw materials and intermediates- Operating income decreased, despite higher gross profit, as personnel expense and other selling, generaland administrative expenses increased at the Prinova Group and profit contribution from the new Utah
plant was delayed<Others>
No special matters to disclose.

24

(2)

Status of capital investment, etc.
During the current fiscal year, the Group made capital investment of 20 billion yen (including
intangible fixed assets), particularly in the Life & Healthcare segment.
A breakdown of capital investment amounts by segment is set forth below.
Segment

Amount (Millions of yen)

Functional Materials

1,262

Advanced Materials & Processing

1,159Electronics & Energy

3,189

Mobility

325

Life & Healthcare

4,367

Others, Company-wide (common)

9,708

Total

(3)

20,012

Status of capital procurement
The Company has established commitment lines of 20 billion yen in total with financial institutions
for fund-raising, preparing for unexpected situations.

(4)

Status of transfers of business, absorption-type company split or corporate divisions
No applicable information.

(5)

Status of acquisition of business of other companies
No applicable information.

(6)

Status of assumption of rights and duties relating to the business of other companies throughabsorption-type merger or company split
No applicable information.

(7)

Status of acquisition or disposal of shares, other equity interests, or share options and the like of othercompanies
No applicable information.

25

(8)

Issues to be addressed

Medium-term Management Plan “ACE 2.0”
The NAGASE Group (hereinafter “NAGASE”) has prepared the Five-Year Medium-term Management
Plan “ACE 2.0” to solve materiality (key issues) identified, by backcasting from the Ideal NAGASE in
2032 (200th anniversary of its foundation). Positioning ACE 2.0 as “Pursue Quality,” NAGASE
launched it in April 2021, and considers that the items listed in ACE 2.0 are the issues to be addressed.
* “ACE” represents Accountability, Commitment, and Efficiency.
Quantitative Targets of ACE 2.0 and Results
Quantitative targets of ACE 2.0 and results are as shown in the table below.
Measures

Indicators

Enhance capital efficiency

ROE

Increase earnings power

Operating income

Targets

Fiscal 2020

8.0%

5.9%

Fiscal 2021
7.7%

Fiscal 2022

Fiscal 2023

6.6%

5.9%

35.0 billion yen 21.9 billion yen 35.2 billion yen 33.3 billion yen 30.6 billion yen

In fiscal 2023, profitability in the resin sale business, which was affected by sluggish global demand, andin the digital print processing materials business, which faced a deterioration in the demand and supply
balance, deteriorated due to lower sales volume and unit sales price. This, together with the Prinova Groupsuffering from a decline in the unit sales price due to the influx of inexpensive Chinese products andincurring personnel expenses, etc., exceeding revenues due to a delay in the installation of automationequipment at its Utah plant, resulted in a deterioration in profitability as a whole.
While the situation is improving, we face an external environment where increasing interest expenses andthe rising trend in personnel expenses resulting from global increases in prices continue, thereby
demanding further reform of our profit structure.
Against this backdrop, in November 2023, the full-year forecast for fiscal 2023 for operating income had
been revised to 30.0 billion yen, and overall performance was in line with the forecast.
It was a year during which NAGASE made considerable achievements in “Pursue Quality,” including
progress in initiatives in Focus Areas, and a reduction in losses in Improvement Areas, in addition to
reducing inventory held strategically to cope with the unstable condition of the supply chain during the
COVID-19 pandemic.
NAGASE will continue to promote ACE 2.0 under the basic policy described below, with the aim toachieve the quantitative targets in fiscal 2025, the final year of the Medium-term Management Plan.

26

Basic ACE 2.0 Policy
For the realization of NAGASE’s sustainable growth under the ACE 2.0, NAGASE will create the“thoughts” that all stakeholders expect as a specific “state” (business/framework/culture). Then, NAGASE
will aim to become “a business designer that creates a sustainable future” by accelerating DX further,promoting sustainability, and strengthening corporate functions for the two kinds of reform, “Reform Profit
Structure” and “Reform Corporate Culture,” including the functions to uphold both reforms.

27

Reform Profit Structure - Establishment of Revenue Base towards the “Ideal NAGASE”
To maximize management resource efficiency, NAGASE secures and reinvests management resources.
From the viewpoints of efficiency and growth, NAGASE classifies its businesses into four areas, “Base,”“Focus,” “Growth,” and “Improvement,” implements strategies for each area, and accelerates the shiftingof resources.
NAGASE has manufacturing and R&D functions as well as trading company functions. We had been using
a business axis for our four quadrants; however, we re-classified our business portfolio by use of afunctional axis in fiscal 2023 to further ensure future growth, clarifying priority fields in respective areas.
(Approach to Business Portfolio)[Reform Profit Structure - Initiatives](Base Areas)
We define our trading company functions as Base Areas in our business portfolio. Trading company
functions are responsible for exploration and matching of issues by leveraging our global network and theability of NAGASE Group’s talents to judge information. These functions focus on high-quality
information for use in the business development of Growth Areas to play an essential role in creating new
businesses and new materials.
As a result of our initiatives to make a proposal that combined a deep understanding of the supply chains inthe semiconductor area, knowledge on technologies and our issue-solving capabilities, we were selected asa partner for arranging transportation for Rapidus Corporation, which aims to manufacture cutting-edge
semiconductors in Japan. We will make contributions through the development and maintenance of supply
chains aimed at realizing manufacturing of cutting-edge semiconductors.
Further, a reduction in inventory, which had been held strategically to maintain the supply chain under
unstable conditions due to the COVID-19 pandemic, led to the right-sizing of capital.

28

(Focus Areas)
We define manufacturing functions in the food field centered on Prinova Group, the semiconductor field
centered on Nagase ChemteX Corporation, and the life science field centered on Nagase Viita Co., Ltd.
(whose name changed from Hayashibara Co., Ltd. in April 2024) as Focus Areas.
In the food field, the installation of automation equipment at the Utah plant of the Prinova Group has been
completed, making it ready to start contributing to revenue. With the aim to expand a highly profitablemanufacturing and processing business globally, we will make aggressive investments such as M&A.
In the semiconductor field, sales of liquid encapsulating materials for high-end servers by Nagase
ChemteX Corporation have been strong and are expected to continue to grow. Nagase ChemteX
Corporation is promoting a review to establish a new manufacturing base from the BCP perspective ofchemical-related products such as release agents. In addition, there was progress in the initiatives to launcha business collecting and recycling chemicals used in the manufacturing process of semiconductors at SN
Tech Corporation, a joint venture with our partner Sachem Inc. We will work to offer unique solutions tothe semiconductor industry in the future.
In the life science field, we changed the corporate name of Hayashibara Co., Ltd., which manufacturescosmetic raw materials and pharmaceutical raw materials, to Nagase Viita Co., Ltd. The name represents
its aim to “Respect life, and embrace the well-being of people and the planet.” In addition, Nagase Viita
received the “Platinum” rating from EcoVadis, acquiring the highest rating evaluation by an externalorganization as a trusted supply chain partner. It is also promoting the review of expansion into new
business areas and will accelerate growth through M&A and other means.
(Growth Areas)
We define research and development for new materials that will become a future pillar of revenue,
incubation to create new businesses, and businesses in areas of high growth potential as Growth Areas.
Through our research and development functions we made progress in our initiatives toward the mass
production of rare amino acid ergothioneine, making steady progress for future commercialization. In
addition, we succeeded in creating an SAP (Super Absorbent Polymer) with higher absorbability despite
starch being the primary material used, by combining our proprietary enzyme technologies and organic
synthesis techniques, and initiated marketing activities. Further, we recently succeeded in developing a
grade of super-absorbent polymer (SAP) with marine biodegradability. Testing by a third-party
organization has confirmed it has the required biodegradability to be certified as marine biodegradable,
broadening the possibility of using it in products including those used for soil water retention for greening
or agricultural purposes that may flow out into ocean through rivers and rolling them out asenvironmentally friendly products.
With a view to enhancing our research and development functions in order to continue to contribute tosolving social issues through the development of materials, we decided to integrate basic researchfunctions of Nagase Bio-Innovation Center and Nagase Viita Co., Ltd. and establish a new bio researchbase (to be opened in April 2027 or later).
We formed CVC (Corporate Venture Capital) to promote the creation of new businesses in the future froma different perspective from existing businesses. We will promote investment in start-up companies toacquire a wide range of leading-edge technologies and knowledge and discover seeds for next-generation
businesses.
In addition, we have defined the Global South (India, Brazil, Mexico, and Indonesia) as a field in which we
expect further growth in the future and promoted initiatives, including the development of cross-divisional
area strategies. We will continue to accelerate investment of resources.

29

(Improvement Areas)
We define loss-making businesses, unprofitable transactions, and businesses with concerns for future
impairment losses of assets as Improvement Areas.
Unprofitable transactions and impairment losses have been reduced significantly from fiscal 2022 throughcomprehensive monitoring activities.
We initiated monitoring based on capital cost by business in fiscal 2023 to make our business portfolio
management more advanced. We will continue to work on asset replacement by collecting capital frombusinesses that have been unsuccessful in delivering a sufficient rate of returns on invested capital relative
to their capital cost, as well as promoting the investment of capital into businesses that realize value
creation in excess of their respective assumed capital costs.
The review is underway into investment candidates worth approximately 80 billion yen in total, primarily
in Focus and Growth Areas, for sustainable growth. We will make decisions after scrutinizing them toidentify transactions that will lead to improvement in corporate value through an appropriate review
process.
Reform Corporate Culture - Mindset towards the “Ideal NAGASE”
Considering that it is necessary to pursue economic value and social value as a pair of values for therealization of “Pursue Quality,” NAGASE conducts monitoring by setting financial and non-financial
KPIs. Further, we will strive to improve productivity of core operations in the pursuit of efficiency,
increase ROIC through the business strategy, and reduce WACC through the financial strategy, to improve
ROIC spread. NAGASE will aim to improve corporate value by earning its ROIC above WACC at all
times. In addition, we believe it is necessary to boost personnel to promote reforms and will work toenhance engagement of employees and the Company to achieve sustained growth and development for
both.
(Pursue Efficiency)(Enhanced Engagement)*1: Net income attributable to owners of the parent/Average invested capital*100*2: Cost of shareholders’ equity (constituent of WACC) represents the amountobtained using the Company’s original CAPM-based calculation method.

[Reform Corporate Culture - Initiatives]
ROIC in fiscal 2023 declined to 4.0% due to lower business profitability as described in Quantitative
Targets of ACE 2.0 and Results, despite the effect of progress in reducing inventory as initially expected.
WACC stood at 5.9%, partly due to the impact of a higher percentage of shareholders’ equity in weighted
average capital with a decline in the Net DE ratio to 0.27 times.
As an initiative to improve capital efficiency, we sold 17 securities valued at 7.1 billion yen of crossshareholdings in fiscal 2023. While we have been striving to improve profitability through various
measures, under the recognition that further improvement in capital efficiency is necessary to achieve ROEof 8.0% or higher, a quantitative target of ACE 2.0, we decided to change our shareholder returns policy
to adopt total return ratio of 100%, in addition to the existing policy of continued dividend increase, as atentative measure for two years up to the final year of ACE 2.0.
30

The revised shareholder returns policy will be reviewed upon the expiration of ACE 2.0.
(Policy and results of the sale of cross-shareholdings)
Fiscal 2019
Numbe r of securities soldTotal sales priceMedium-term manage ment plan ACE 2.0

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

Total

7

5

49

13

17

10.4 billion yen

6.2 billion yen

7.8 billion yen

7.3 billion yen

7.1 billion yen(from fiscal 2021 to fiscal 2025)
79

Five years’ cumulative total

22.4 billion yen Plan to se ll share s worth 30 billion yen(Changes to our shareholder returns policy)
Conventional policy

New policy

Total return ratio

－

100%

Dividends

In principle, continued dividend increase

Same as on the left

Repurchase of treasury stock

Implement repurchase of treasury stock
flexibly, with the maximum amount being theamount of strategic cross-shareholding sold

Implement repurchase of treasury stock
flexibly* A tentative measure until the expiration of ACE 2.0 (fiscal 2025). It will be reviewed upon the
expiration of ACE 2.0.
With respect to the enhancement of personnel to promote reforms, we revised the human resources systemof the Company with the aim to clarify roles and professional duties and ensure their linkage to treatment,
enable dynamic personnel assignment and promotion, and facilitate securing and promotion of diverse
specialist personnel. We started operating the system on April 1, 2024. In addition, we assigned an HRBP
(HR Business Partner) to each department to strengthen the system to promote human resources strategies
linked to medium- to long-term business strategies. In addition to these initiatives, we have been promoting
the reform of our work culture, etc., through the creation of learning opportunities by expanding elective
training and hosting workshops aimed at the promotion of D&I (Diversity & Inclusion) for management
and those in managerial posts. Through these initiatives, we will promote improved employee engagement
and enhanced competitiveness.
In addition, we integrated 11 departments into 7 departments with a view to increasing the efficiency oforganization management, expediting decision-making, enhancing the effectiveness of disposal of
unprofitable businesses, reallocating human resources and others. Further, we worked to establish an
efficient management base by promoting the delegation of authority to the business divisions as well as
reviewing various committees to allow prompt decision-making in accordance with changes in the external
environment.
Functions supporting reforms
To realize both reforms, NAGASE will expand the DX, sustainability, and corporate functions because
these functions are necessary across the Group.
By using DX as a means, NAGASE will further improve its existing strengths, “broad network,” “technicalknowledge,” and “problem-solving capabilities & human resources,” mainly aiming to enhance andexplore business models that can solve the issues of customers and societies, create innovation, andimprove productivity.
To pursue economic value and social value for the realization of the “Ideal NAGASE” based on the
Sustainability Basic Policy, NAGASE will also make these functions available to the entire Group.

31

[Initiatives]
In relation to further acceleration of DX, preparation for rolling out a marketing platform aimed atstrengthening and expanding the customer base through digital marketing has been partially completed,
and we have shifted to a phase to utilize it and acquire revenue in each business division and region.
With respect to the promotion of sustainability, we gained deeper knowledge on solutions to deal withclimate change in supply chains by, for example, collecting and coordinating primary data on GHG
emissions in the supply chains under the PACT*2 hosted by the WBCSD*1 in cooperation with Zeroboard
Inc. and Fujitsu Limited, our partners to provide decarbonation management solutions, to succeed in an
initiative to calculate GHG emissions of final products.
*1 World Business Council for Sustainable Development*2 Partnership for Carbon Transparency (partnership among companies to coordinate product carbon
footprint information through the transparency of the exchange of primary data on GHG emissions acrosstheir supply chains)Non-financial targets (KPIs) and results
Under ACE 2.0 we have established employee engagement and reduction in GHG emissions toward
carbon neutrality as non-financial targets (KPIs) to be evaluated quantitatively and monitored in our
initiatives to address to solve materiality (key issues). The results for fiscal 2023 are as below.
Enhance employee engagement
Benchmarks

Fiscal 2021

Fiscal 2022

Fiscal 2023

Targets for
Fiscal 2025

Group companies:
Ratio of companies that carry out engagement surveys
periodically

41%

81%

86%

100%

NAGASE & CO. LTD. (non-consolidated):
Total score in the engagement survey

52.4

56.5

56.0

60 or higher(Reference) NAGASE & CO. LTD. (non-consolidated):
Response rate in the engagement survey

98%

96%

96%

32

Reduction in GHG emissions(Unit: t-CO2)
Item

Fiscal
2013

Scope 1
Scope 2
(Market-based)

86,197

Total

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Targets for Fiscal
2025

30,53833,13231,09931,381-

33,10527,057

25,61026,784-

63,64360,18956,71058,165-

Consolidated Scope 1, 2 reduction rate(compared to 2013)

-

26%

30%

34%

33%

37% or higher

Reduction due to power
generation and purchaseof renewable energy(cumulative)

-

-

10

523

7,488

35,000 or higher

Scope 2

-

-

2,514

2,014

1,810

Zero emission

NAGASE &CO. LTD.
(nonconsolidated)* Included in the consolidated data are NAGASE & CO., LTD., Nagase ChemteX Corporation, and Nagase Viita Co., Ltd.
* Data for fiscal 2023 are tentative values before receiving third-party assurance.

(9)

Changes in assets and profit/loss
Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

Gross profit (Unit: Million yen)

114,600

139,494

155,410

164,719

Ordinary income (Unit: Million yen)

22,85436,49732,52830,591

Net income attributable to owners of theparent (Unit: Million yen)

18,82925,93923,62522,402

Net income per share (Unit: yen)

151.91

213.46199.54194.96

Total asset (Unit: Million yen)

640,587739,720762,688792,336

Net asset (Unit: Million yen)

338,431355,092

378,388

401,315

Note: Amounts indicated in units of one million yen are rounded down to the nearest one million yen.

33

(10) Status of parent company and main subsidiaries (As of March 31, 2024)a) Status of parent company
No applicable information.
b) Status of main subsidiaries
Company name

Percentage ofvoting rights
held

Main business-100.0%(100.0%)

Sales of food ingredients, processing, andcontract manufacturing of finished products(thousand)100.0%

Regional management, investment and asset
management, and provision of professional
services

500 million yen

100.0%Development, manufacture, and sale of food
raw materials, pharmaceutical raw
materials, cosmetics raw materials, healthfoods raw materials, and functional dyes(thousand)100.0%(100.0%)

Import/export, intermediate trade, market
development, information collection

100.0%

Manufacture and sale of high-performanceresins, such as formulated epoxy resins,
photolithography materials, epichlorohydrin
derivatives, acrylic polymer,
electroconductive paints, and sterilization
and antibacterial agents

100.0%

Import/export, intermediate trade, market
development, information collection

134,687

100.0%(100.0%)Investment, trade, import/export,
processing, logistics, R&D, IT development,
and various services

310 million yen

100.0%

Sale of coating raw materials, dyestuffs,
paper chemicals, industrial chemicals,
plastics, and various machinery

100.0%

Import/export, intermediate trade, market
development, information collection

70.0%(53.8%)

Sale of plastics and related products

CapitalPrinova Group LLC
Nagase Holdings America
Corporation

Hayashibara Co., Ltd.

Shanghai Nagase Trading
Co., Ltd.

Nagase ChemteX
Corporation

Nagase (Hong Kong) Ltd.

US$

RMB

1

8,120

2,474 million yen(thousand)HK$

28,670(thousand)Nagase (China) Co., Ltd.

Nagase Chemical Co., Ltd.

Nagase (Thailand) Co., Ltd.
Shanghai Hua Chang
Trading Co., Ltd.

RMB

(thousand)BAHT

321,000(thousand)

RMB

19,864

Notes:
1.

Figures in parentheses under percentage of voting rights held indicate indirect ownership (included in total equity
holdings).

2.

Prinova Group LLC is a limited liability company under United States law. The amount of capital is not statedbecause it does not exactly accord with the concept of capital.

3.

Hayashibara Co., Ltd. changed its trade name to Nagase Viita Co., Ltd. effective April 1, 2024.

4.

As of the end of the fiscal year, there were no specified wholly owned subsidiaries.

34

(11) Main business activities (As of March 31, 2024)
The NAGASE Group conducts import and export of a diverse range of products, conducts domestictransactions, manufactures and sells products, and provides services.
Business segment

Products handled or services provided

Functional Materials

Paint and ink, dyestuff, pigments, additives, processing pigments, dispersing
element, functional dyes, material for thermal paper, materials for toner and inkjet, adhesive raw materials, urethane materials and auxiliaries, plastic materials,
plastic additives, industrial oil materials, water processing-related materials,
surfactant raw materials, fluorochemicals, adhesive materials, 5G-relatedmaterials, silicone materials, environmental solution and environment-relatedcommercial products, sintered metal filters, conductive paints, and others

Advanced Materials &Processing

Thermoplastic resins, thermosetting resins, plastic products, plastic moldings andmolds, and others

Electronics & Energy

Modified epoxy resins, fluoric products, fine polishing abrasives, semiconductor
assembly materials and equipment, adhesive and sealing materials, display panel
components, materials and equipment, chemical management equipment for
display production processes, low-temperature vacuum equipment, equipment toanalyze liquid state, LED, 3D printing-related commercial products, solar panels,
and others

Mobility

Plastic products, rechargeable battery raw materials, interior and exterior materials
and parts, materials for mechanical components, products for electrification,
sensor parts, products for automotive interior electronics, automotive displayrelated components, products for automatic driving, and others

Life & Healthcare

Pharmaceutical and agricultural raw materials, research reagents, in-vitro
diagnostics, enzymes, food additives, food extracts, sports nutrition, premix,
cosmetics additives, feed, surfactants, medical equipment, radiation measuringservices, sleep monitoring service, cosmetics, health foods, beauty foods, andothersOthersDesign and manufacture of rechargeable battery systems, proposals for energy
management systems, battery assessment services, healthcare services, logistics
services, information processing services, vocational services, and others

35(12) Main offices and plants (As of March 31, 2024)
Domestic sales branch

NAGASE & CO.,LTD.

Head officeOsaka Head Office (Osaka, Osaka)

BranchTokyo Head Office (Chuo-ku, Tokyo),
Nagoya Branch Office (Nagoya, Aichi)

Domestic R&D center

Nagase Bio-Innovation Center (Kobe, Hyogo), Nagase
Application Workshop (Amagasaki, Hyogo)

Domestic sales branch

Nagase Chemical Co., Ltd. (Chuo-ku, Tokyo), and others

Domestic
manufacturing plant

Hayashibara Co., Ltd.: Okayama Plant I, Plant II, Okayama
Functional Saccharide Plant, Fujita Plant and Fujita
Formulation Plant (Okayama, Okayama) and Fukuchiyama
Plant (Fukuchiyama, Kyoto)
Nagase ChemteX Corporation: Harima Plant, (Tatsuno,
Hyogo), Sakai Factory (Sakai, Osaka), and others

Subsidiaries
Domestic R&D center

Overseas sales branch

Hayashibara Co., Ltd.: R&D Center (Okayama, Okayama) andFukuchiyama Plant (Fukuchiyama, Kyoto)
Nagase ChemteX Corporation Harima Plant (Tatsuno, Hyogo),
and others
Prinova Group LLC, Nagase Holdings America Corporation,
Shanghai Nagase Trading Co., Ltd., Nagase (Hong Kong) Ltd.,
Nagase (China) Co., Ltd., Nagase (Thailand) Co., Ltd.,
Shanghai Hua Chang Trading Co., Ltd., and others

Note: Hayashibara Co., Ltd. changed its trade name to Nagase Viita Co., Ltd. effective April 1, 2024.

(13) Status of employees (As of March 31, 2024)a) Status of the corporate group employees
Business Segment

Number of employees

Functional Materials

912

Advanced Materials & Processing

1,179Electronics & Energy

1,511

Mobility

339

Life & Healthcare

2,408

Others328

Company-wide (common)

851

Total

7,528

Notes:
1.

The number of employees indicates the number of persons employed.

2.

The number of employees indicated as “Company-wide (common)” refers to employees who are assigned to
management divisions that cannot be categorized in a particular business segment.

36b) Status of the Company’s employees
Number of employees

Change from the end of
the previous fiscal year

Average age

Average length of service

975

+32

41.8

15.7 years

Notes:
1.
The number of employees indicates the number of persons employed.
2.
The number of employees exclude employees who are seconded from the Company and include employees
who are seconded to the Company, starting from the fiscal year under review.
3.
The change from the end of the previous fiscal year shows the number of persons by re-classifying data for theprevious fiscal year using the method as described for the fiscal year under review.

(14) Main lenders and loan amounts (As of March 31, 2024)
Lenders

Loan amounts

Sumitomo Mitsui Banking Corporation

36,199 million yen

MUFG Bank, Ltd.

21,600 million yen

Mizuho Bank, Ltd.

11,851 million yen

Note: Amounts of less than one million yen are rounded down to the nearest one million yen.

(15) Other significant matters relating to the current state of the corporate group
No applicable information.

37

2.

Matters relating to the Company’s shares (As of March 31, 2024)(1)

Total number of shares authorized

346,980,000(2)Total number of shares issued

117,908,285(3)

Number of shareholders(4)

Principal shareholders (top 10)

28,730

Number of shares held
(thousand shares)

Principal shareholders

Holdings percentage(%)

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

14,089

12.4

Custody Bank of Japan, Ltd. (Trust Account)

5,301

4.6

Sumitomo Mitsui Trust Bank, Limited

4,776

4.2

Sumitomo Mitsui Banking Corporation

4,377

3.8

NAGASE & CO., LTD. Own Share Investment Association

3,674

3.2

Nippon Life Insurance Company

3,589

3.1

Reiko Nagase

3,495

3.1

Nagase Shunzo Co., Ltd.

2,688

2.4

STATE STREET BANK AND TRUST COMPANY 505001

2,130

1.9

CGML PB CLIENT ACCOUNT/COLLATERAL

2,108

1.8

Notes:(5)

1.

The Company holds 3,854,615 shares of treasury stock, and holdings percentages are calculated with the treasury
stock excluded.

2.

Quantities of less than one thousand shares are rounded down.

Status of shares issued to the Company’s Directors as consideration for the execution of duties during
the current fiscal year
No applicable information.

(6)

Other significant matters relating to shares
Treasury stock canceled based on a resolution made at the Board of Directors meeting held on May
8, 2024(i) Class of shares canceled
Common shares of the Company(ii) Number of shares canceled 3,000,000 shares(2.54% of the total number of issued shares before the cancellation)(iii) Date of the cancellation
May 31, 2024

38

3.

Matters relating to officers(1)

Status of the Company officers (As of March 31, 2024)
Areas of responsibility or
profession

Position

Name

Representative
Director and Chairman

Kenji Asakura

Representative
Director and President

HiroyukiUeshima

Representative
Director

MasayaIkemotoIn charge of Corporate
Administration, Business
Development, and Europe andAmericas

Director

Masatoshi
KamadaIn charge of Sales & Marketingand Asia

Director, Senior
AdvisorHiroshi Nagase

Significant concurrent positions
outside the Company
Outside Director of Japan
Tobacco Inc.

Director

RitsukoNonomiya

Representative Director and
CEO of Houlihan Lokey Japan
Co., Ltd.
External Director of Shiseido
Company, Limited

Director

NoriakiHorikiri

Representative Director andChairman of Kikkoman
Corporation

Director

Toshiaki
Mikoshiba

Full-time Audit &Supervisory Board
MemberMasanori
Furukawa

Full-time Audit &Supervisory Board
MemberNobuyuki
Shirafuji

Full-time Audit &Supervisory Board
MemberAkira Takami

Audit & Supervisory
Board Member

Gan MatsuiAttorney

39

Outside Director and Audit&Supervisory Board Memberof Orient Corporation
Outside Audit & Supervisory
Board Member of TOTETSU
KOGYO CO., LTD.
Outside Director (Audit andSupervisory Committee
Member) of GLOBERIDE, Inc.
Outside Director of Dentsu
Group Inc.
Attorney of Yaesu Sogo Law
OfficeNotes:1.

Directors Ritsuko Nonomiya, Noriaki Horikiri, and Toshiaki Mikoshiba are outside Directors and are independent
officers pursuant to the regulations of financial instruments exchanges.

2.

Full-time Audit & Supervisory Board Member Nobuyuki Shirafuji and Audit & Supervisory Board Member Gan
Matsui are outside Audit & Supervisory Board Members and are independent officers pursuant to the regulationsof financial instruments exchanges.

3.

Full-time Audit & Supervisory Board Member Masanori Furukawa and Akira Takami have many years ofexperience engaged in the finance and accounting departments of the Company and possess considerable
knowledge regarding finance and accounting.

4.

Full-time Audit & Supervisory Board Member Nobuyuki Shirafuji has many years of experience in financial
institutions and possesses considerable knowledge regarding finance and accounting.

5.

Audit & Supervisory Board Member Gan Matsui has many years of experience in the legal field as an attorney
and possesses considerable knowledge regarding compliance and governance.

6.

The Company has adopted an executive officer system, and Directors Hiroyuki Ueshima, Masaya Ikemoto, andMasatoshi Kamada are also executive officers.

7.

Changes in Directors and Audit & Supervisory Board Members during the fiscal year
(1) Appointments
At the 108th Annual Shareholders’ Meeting held on June 20, 2023, Toshiaki Mikoshiba and Akira Takami
were newly elected and appointed as Director and Audit & Supervisory Board Member, respectively.
(2) Retirements
Directors Reiji Nagase and Takahiko Ijichi and Audit & Supervisory Board Member Mitsuru Kanno retired
from office due to the expiration of their terms of office effective as of the conclusion of the 108th Annual
Shareholders’ Meeting held on June 20, 2023.
(3) Changes in status or areas of responsibility of Directors during the fiscal year
Representative Directors and Directors with executive titles as of April 1, 2023 were as set forth below.
Name

New

Old

Kenji Asakura

Representative Director, Chairman

Representative Director, President
and CEO

Hiroyuki Ueshima

Representative Director, President
and CEO

Director

Hiroshi Nagase

Director, Senior Adviser

Representative Director, Chairman

Reiji Nagase

Director

Director, Vice Chairman

The areas of responsibility of Directors as of April 1, 2023 were as set forth below.
Position
Representative
Director,
President and
CEO

Name

New

Old
In charge of Business
Development, Europe, Europe(CEO), and General Manager of
New Value Creation Office

HiroyukiUeshima

Representative
Director

MasayaIkemotoIn charge of Corporate
Administration, Business
Development, Europe andAmericas, and Group
Manufacturing Management
Innovation OfficeDirector

Masatoshi
KamadaIn charge of Sales & Marketing,and Asia

40

In charge of Corporate
Administration, Group Affiliates,
and Americas
In charge of Sales & Marketing,Asia, and Greater China (CEO)The areas of responsibility of Directors as of July 1, 2023 were as set forth below.
Position

Representative
Director

Name

New

Old
In charge of Corporate
Administration, Business
Development, Europe andAmericas, and Group
Manufacturing Management
Innovation Office

In charge of Corporate
Administration, Business
Development, and Europe andAmericas

MasayaIkemoto<Reference>
1.

The areas of responsibility of Directors as of April 1, 2024 were as set forth below.
Position

Name

New

Old

Representative
Director

MasayaIkemotoIn charge of Corporate
Administration

In charge of Corporate
Administration, Business
Development, and Europe andAmericas

Director

Masatoshi
KamadaIn charge of Advanced Materials &Processing, Electronics & Energy,
Mobility, and Asia (Greater China,
ASEAN, India, and Korea)

In charge of Sales & Marketing,and Asia

2.

Status of Executive Officers (except for Executive Officers who are also Directors)
Executive Officers were elected on April 1, 2024, and their areas of responsibility were as set forth below.
StatusName

Areas of responsibility

Managing Executive
Officer

Naoki Yasuba

In charge of Nagase Viita Co., Ltd.

Managing Executive
Officer

Takanori Yamauchi

In charge of Nagase Business Expert Co., Ltd.

Managing Executive
Officer

Satoru Fujii

In charge of Nagase ChemteX Corporation

Managing Executive
Officer

Donald K. Thorp

In charge of Prinova Group LLC and Food Business

Managing Executive
Officer

Kusuo OtaIn charge of Group Companies and Greater China (CEO)Executive Officer

Koichi Sagawa

General Manager of Corporate Planning Dept.

Executive Officer

Noriyoshi Yamaoka

Managing Director of Nagase Business Expert Co., Ltd. andManager of Nagoya Branch Office

Executive Officer

Yoshihisa Shimizu

General Manager of Risk Management Dept. and General
Manager of ICT Planning Div.

Executive Officer

Xiaoli Liu

General Manager of Nagase Bio-Innovation Center

Executive Officer

Eiroku Oki

India CEO

Executive Officer

Toru Araki

Director of Totaku Industries, Inc. and in charge of Risk
Compliance

Executive Officer

Tamotsu Isobe

In charge of Functional Materials, Life & Healthcare, Business
Development, Europe and Americas, and Osaka Area

Executive Officer

Kentaro Nagase

Europe (CEO)Executive Officer

Kazuhiro Hanba

General Manager of Corporate Management Dept.

Executive Officer

Toshio Wakuda

General Manager of Human Resources & General Affairs
Dept.

41

(2)

Summary of limiting liability agreement
Pursuant to the Articles of Incorporation, the Company has entered into agreements with outside
Directors Ritsuko Nonomiya, Noriaki Horikiri, and Toshiaki Mikoshiba and outside Audit &Supervisory Board Members Nobuyuki Shirafuji and Gan Matsui, limiting liability to the Company
for damage specified in Article 423, paragraph (1) of the Companies Act. A summary of theagreement is as follows:
If the Company incurs damage as a result of the failure of outside officers to perform their duties, aslong as the outside officers performed their duties in good faith and without gross negligence, theliability for damage that the outside officers shall owe to the Company shall be limited to theminimum amount of liability specified in Article 425, paragraph (1) of the Companies Act.

(3)

Summary of directors and officers liability insurance contract
The Company’s Directors, Executive Officers and Audit & Supervisory Board Members are coveredby directors and officers liability insurance. Under this insurance policy, 10% of insurance premiums
applicable to an indemnity rider covering shareholder lawsuits are paid by the insured persons, and
90% are paid by the Company. Covered insurance events are third-party lawsuits, shareholder
lawsuits, etc. In addition, the maximum total amount of insurance has been set, and officers
responsible for an insurance event are required to individually pay for a certain portion of the damage
incurred so that the appropriateness of job execution can be maintained.

(4)

Compensation to Directors and Audit & Supervisory Board Members for the fiscal yeara) Total compensation paid to Directors and Audit & Supervisory Board Members(Millions of yen)
Breakdown
StatusDirector

NumberTotal amountofcompensation

Fixed
compensation

Performance-linked
Performance-linked compensation, etc.
compensation, etc. (non-monetarycomp.)

Inside Director

6

234

177

30

26

Outside Director

4

36

36

-

-

Total

10

271

214

30

26

Inside Audit &Supervisory
Board Member

3

48

48

-

-

2

34

34

-

-

5

83

83

-

-

Audit &
Supervisory
Outside Audit &BoardSupervisory
MemberBoard Member
Total
Notes:
1.

Included in the above is 71 million yen in total compensation paid to the six outside Directors.

2.

The total compensation paid to Directors indicated above includes 120 million yen which is reported as an
expense of provisions during the fiscal year.

3.

In addition to the above, 13 million yen in employee salaries was paid to Directors who also serve as employees.

4.

The amount of compensation indicated above includes compensation paid to two Directors and one Audit &Supervisory Board Member who retired effective as of the conclusion of the 108th Annual Shareholders’ Meeting
held on June 20, 2023.

42b) Matters relating to performance-linked compensation
As an index for performance-linked compensation, the Company has selected net income attributableto owners of the parent (i.e. final profit) to provide an incentive that can improve performance andROE to provide an incentive that can enhance capital efficiency. Regarding calculation method of
performance-linked compensation, the base amount of performance-linked compensation based on
net income attributable to owners of the parent, is determined first based on consolidated
performance forecasts at the beginning of year. Then, the base amount is multiplied by the ratio of thecurrent year’s net income attributable to owners of the parent against the previous year’s actual net
income attributable to owners of the parent and by the rate of achieving the consolidated performance
forecasts at the beginning of year. Finally, the resulting amount is adjusted through the assessments ofeach officer. The current fiscal year’s actual net income attributable to owners of the parent was 22.4
billion yen. For the calculation of performance-linked compensation based on ROE, the degree ofachieving annual goals that are set each year to attain the final target value under the Medium-termManagement Plan is used. The ROE result for the fiscal year is 5.9%. To strengthen the link between
sustainability-related initiatives and director compensation, we have added ESG-related indicators to
performance-linked indicators since fiscal 2024.
c) Matters relating to the resolutions of shareholders’ meetings on compensation, etc., paid to Directors
and Audit & Supervisory Board Members
The upper limit of Director compensation was decided to be 600 million yen per year (60 million yen
per year for outside Directors) by the resolution of the Annual Shareholders’ Meeting held on June20, 2022 (however, employee salaries paid to Directors who also serve as employees are notincluded). The number of Directors at the conclusion of this Shareholders’ Meeting was nine(including three outside Directors).
In addition, separately from the above, the introduction of a performance-linked, stock-based
compensation system for Directors (excluding Outside Directors) with a trust period of four (4) years
and maximum amount of monies contributed during the period of 280 million yen was resolved by
the Annual Shareholders’ Meeting held on June 20, 2022. The number of Directors (excluding
Outside Directors) at the conclusion of this Shareholders’ Meeting was six.
The upper limit of Audit & Supervisory Board member compensation was decided to be 100 million
yen per year by the resolution of the Annual Shareholders’ Meeting held on June 21, 2019. The
number of Audit & Supervisory Board members at the conclusion of this Shareholders’ Meeting was
four.
d) Matters relating to the policy of determining the details of compensation, etc., paid to each Director
The Company has established a policy on officer compensation amounts and the calculation method
after having proposed such for consideration at a meeting of the Compensation Committee, in which
the majority of members are outside Directors, and then had it deliberated on at a Board of Directors
meeting. As a basic policy, the ratios of fixed compensation (monetary component), performancelinked compensation (monetary) and performance-linked compensation (non-monetary) will be 50–
70%, 25–40%, and 5–10% (when the performance targets are achieved 100%), respectively,
depending on the position of each officer so that the Company can provide officer compensation thatsuits the scope of roles and responsibility for each position considering objective external data,business conditions, etc., and that it serves as motivation to sustainably enhance the Company’s
corporate value. Compensation paid to outside Directors and outside Audit & Supervisory Board
members includes solely base compensation, which is fixed compensation in consideration of thedetails of their duties.
In addition, the annual amount of fixed compensation will be divided into 12 months and paid, while
the monetary component of performance-linked compensation will be paid all at once at the end ofJune, as a basic policy. Further, the policy provides that, as non-monetary compensation which is paid
under the performance-linked, stock-based compensation system, shares corresponding to the numberof points granted in accordance with the position of each officer and the degree of achievement of theperformance targets will be delivered upon retirement from office through a trust established by theCompany.

43e) Matters relating to the entrustment of determination of the details of compensation, etc., paid to each
Director
Regarding compensation paid to each Director, the Board of Directors has appointed Hiroyuki
Ueshima, Representative Director and President, to make the final decision, considering that thevalidity of the compensation system, levels, etc., has been discussed by the Compensation Committee
in which the majority of members are outside Directors. The said authority entrusted to theRepresentative Director and President is the assessment of performance-linked compensation(monetary) of each Director based on his or her work performance, etc. The reason for entrustingsuch authority is that the Representative Director and President is considered the most suitable person
to overlook the Company’s overall performance and assess each Director’s work performance. The
Board of Directors has proposed the original plan for consideration at a meeting of the Compensation
Committee and received the Committee’s answer so that the said authority can be exercised
appropriately by the Representative Director and President. The Company considers that thecompensation determination policy has been complied with. Compensation paid to each Audit &Supervisory Board member is determined through discussions held by the Audit & Supervisory
Board members.

44

(5)

Matters relating to outside officersa) Significant concurrent positions and relationship with the Company
StatusName

Outside Director

RitsukoNonomiya

Outside Director

Noriaki Horikiri

Outside Director

Toshiaki
Mikoshiba

Outside Audit &Supervisory
Board Member

Nobuyuki
ShirafujiOutside Audit &Supervisory
Board Member

Gan Matsui

Significant concurrent positions
outside the Company

Special relationship with theCompany

Representative Director and CEO of
Houlihan Lokey Japan Co., Ltd.

The Company received
outsourcing services in the past.

External Director of Shiseido
Company, Limited

The Company engages intransactions including sale ofgoods.

Representative Director and Chairmanof Kikkoman Corporation

The Company engages intransactions including sale ofgoods.

Outside Director and Audit&Supervisory Board Member of Orient
Corporation

No special relationship

Outside Audit & Supervisory Board
Member of TOTETSU KOGYO CO.,LTD.

No special relationship

Outside Director (Audit andSupervisory Committee Member) of
GLOBERIDE, Inc.

The Company sells products.

Outside Director of Dentsu Group Inc.

The Company engages in
research-related transactions.

Attorney of Yaesu Sogo Law Office

No special relationshipb) Relatives of managing members or officers (who are not managing members) of the Company or
trading partners that have special-interest businesses
No applicable information.

45c) Main business activities during the fiscal year
Status

Outside Director

Name

Main business activities

RitsukoNonomiya

She attended 16 of 16 Board of Directors meetings held during the fiscal
year (attendance rate: 100%). Regarding the matters discussed at themeetings of the Company’s Board of Directors, Compensation Committee,etc., she gave advice focusing on the Company’s overall managementfrom a perspective of advanced knowledge of finance and accounting andfamiliarity with M&A and business development.

Noriaki Horikiri

He attended 16 of 16 Board of Directors meetings held during the fiscal
year (attendance rate: 100%). Regarding the matters discussed at themeetings of the Company’s Board of Directors, Compensation Committee,
Nomination Committee, etc., he gave advice focusing on the Company’s
overall management including overseas development and manufacturing
activities from a perspective of familiarity with manufacturing industries.

Toshiaki
Mikoshiba

He attended 12 of 12 Board of Directors meetings held after he wasappointed as Director on June 20, 2023 (attendance rate: 100%).
Regarding the matters discussed at the meetings of the Company’s Boardof Directors, Compensation Committee, Nomination Committee, etc., hegave advice focusing on the Company’s overall management including
overseas development and sales activities from a perspective of familiarity
with manufacturing industries.

Nobuyuki
ShirafujiAttended 16 of 16 Board of Directors meetings held during the fiscal year
(attendance rate: 100%) and all 16 meetings of the Audit & Supervisory
Board held during the fiscal year (attendance rate: 100%) and presented
opinions, gave advice, and made other statements as appropriate based onbroad insight by making use of many years of overseas experience infinancial institutions.

Gan Matsui

Attended 16 of 16 Board of Directors meetings held during the fiscal year
(attendance rate: 100%) and all 16 meetings of the Audit & Supervisory
Board held during the fiscal year (attendance rate: 100%) and presented
opinions, gave advice, and made other statements as appropriate from a
professional perspective as an attorney.

Outside Audit &Supervisory
Board Member

Note: The number of Board of Directors meetings noted above does not include resolutions made in writing.

46

Consolidated Financial Statements
Consolidated Balance Sheet (As of March 31, 2024)(Amounts of less than one million yen are rounded down.)
ASSETS

Amount(Millions of yen)

Current assets

542,470

Cash and time deposits

59,410Notes and accounts receivable and contract assets

321,126

Merchandise and finished goods

131,137

Work in process

2,594

Raw materials and supplies

14,259Other

14,881Less allowance for doubtful accounts(940)

Non-current assets

249,865

Property, plant and equipment

87,392

Buildings and structures

26,697

Machinery, equipment and vehicles

16,588Land

20,221

Other

23,884

Intangible fixed assets

69,349Goodwill

27,884

Technology-based assets

2,761

Other

38,703

Investments and other assets

93,123

Investments in securities

76,225Long-term loans receivable

326

Retirement benefit asset

6,217

Deferred tax assets

4,596

Other

5,935

Less allowance for doubtful accounts(177)

Total assets

792,33647

LIABILITIES AND NET ASSETS

AmountLIABILITIES(Millions of yen)
302,675

Current liabilities
Notes and accounts payable

156,352

Short-term loans

50,731

Current portion of long-term loans

6,946

Commercial paper

37,000Current portion of bonds

10,000Accrued income taxes

5,195

Accrued bonuses for employees

7,569

Accrued bonuses for directors

251

Other

28,628Long-term liabilities

88,345

Bonds

20,000Long-term loans

27,533

Lease obligations

12,492

Deferred tax liabilities

13,567Retirement benefit liability

12,345

Provision for share awards

60

Other

2,345

Total liabilities

391,021

NET ASSETS
312,832

Shareholders’ equity
Common stock

9,699

Capital surplus

9,348

Retained earnings

303,328

Treasury stock, at cost

(9,543)

Accumulated other comprehensive income (loss)

81,232Net unrealized holding gain on securities

33,763

Deferred gain on hedges

119Translation adjustments

44,846

Remeasurements of defined benefit plans

2,503

Non-controlling interests

7,250

Total net assets

401,315

Total liabilities and net assets

792,33648

Consolidated Statement of Income (April 1, 2023 – March 31, 2024)(Amounts of less than one million yen are rounded down.)
Amount(Millions of yen)

(Millions of yen)

Net sales

900,149

Cost of sales

735,430

Gross profit

164,719

Selling, general and administrative expenses

134,100

Operating income

30,618Non-operating income
Interest income

610

Dividend income

1,553

Rent income

248

Foreign exchange gains

635

Equity in earnings of affiliates

568

Other

705

4,321

Non-operating expenses
Interest expense

3,744

Other

604

Ordinary income

4,348
30,591

Extraordinary gains
Gain on sales of non-current assets

83

Gain on sales of investments in securities

5,591

Subsidy income

512

Other

46

6,234

Extraordinary losses
Loss on sales of non-current assets

41

Loss on disposal of non-current assets

1,422

Impairment losses

2,276

Loss on sales of investments in securities

21

Loss on valuation of investments in securities

135

Other

263

Income before income taxes

4,160
32,665

Income taxes - current

10,627

Income taxes - deferred(815)

Net income

9,812
22,853

Net income attributable to non-controlling interests

450

Net income attributable to owners of the parent

22,40249

Non-Consolidated Financial Statements
Non-Consolidated Balance Sheet (As of March 31, 2024)(Amounts of less than one million yen are rounded down.)
ASSETS

Amount(Millions of yen)

Current assets

294,507

Cash and time deposits

12,980Notes receivable

1,678Electronically recorded monetary claims - operating

19,993

Accounts receivable

172,635

Merchandise

26,063

Goods in transit

2,758

Short-term loans receivable from subsidiaries and affiliates

59,183

Other

6,708

Less allowance for doubtful accounts(7,494)Non-current assets

202,955

Property, plant and equipment

15,230

Buildings

3,336

Structures

37

Machinery and equipment

745

Tools, furniture and fixtures

1,202

Land

8,505

Other

1,403

Intangible fixed assets

7,576

Software

5,593

Other

1,983

Investments and other assets

180,147

Investments in securities

62,943

Shares of subsidiaries and affiliates

101,210Investments in capital of subsidiaries and affiliates

3,901

Long-term loans receivable from subsidiaries and affiliates

7,966

Claims provable in bankruptcy, claims provable in rehabilitation and other106

Prepaid pension cost

3,041

Other

2,212

Less allowance for doubtful accounts(1,234)

Total assets

497,46350

LIABILITIES AND NET ASSETS

AmountLIABILITIES(Millions of yen)

Current liabilities

242,681

Electronically recorded obligations - operating

1,628

Accounts payable

99,426

Short-term loans

34,809Current portion of long-term loans

6,900

Commercial papers

37,000Current portion of bonds

10,000Accounts payable - other

4,235

Accrued income taxes

1,085

Deposits received

43,712

Accrued bonuses for employees

1,965

Other

1,918

Long-term liabilities

60,832

Bonds

20,000Long-term loans

21,000

Deferred tax liabilities

12,024Retirement benefit liability

6,719

Provision for loss on guarantees

592

Provision for share awards

60

Provision for loss on business of subsidiaries and affiliates

342

Other

92

Total liabilities

303,513NET ASSETS
Shareholders’ equity

160,958

Common stock

9,699

Capital surplus

9,634

Legal capital surplus

9,634

Retained earnings

151,167

Legal retained earnings

2,424

Other

148,742

Reserve for reduction entry

2,045

General reserve

95,579Retained earnings brought forward

51,118Treasury stock, at cost

(9,543)

Valuation and translation adjustments

32,991

Net unrealized holding gain on securities

32,871

Deferred gain on hedges

119

Total net assets

193,949

Liabilities and net assets

497,46351

Non-Consolidated Statements of Income (April 1, 2023 – March 31, 2024)(Amounts of less than one million yen are rounded down.)
Amount(Millions of yen)

(Millions of yen)

Net sales

263,909

Cost of sales

224,986

Gross profit

38,923

Selling, general and administrative expenses

38,554

Operating income

368

Non-operating income
Interest income

2,863

Dividend income

6,277

Rent income

668

Foreign exchange gains

546

Other

1,381

11,738Non-operating expenses
Interest expenses

3,186

Cost of rent revenue

420

Other

788

Ordinary income

4,394
7,711

Extraordinary gains
Gain on sales of non-current assets

6

Gain on sales of investments in securities

5,591

Other

1

5,599

Extraordinary losses
Loss on sales of non-current assets

0Loss on disposal of non-current assets

1,147

Loss on sales of investments in securities

21

Loss on valuation of investments in securities

125

Provision of allowance for doubtful accounts for
subsidiaries and affiliates

4,395

Provision for loss on business of subsidiaries and affiliates

342

Provision for loss on guarantees

101

Income before income taxes

6,132
7,178

Income taxes - current

1,989

Income taxes - deferred45

Net income

2,034
5,143

52