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

April 28, 2023

Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Japanese GAAP)
Company name:NIPPON FINE CHEMICAL CO., LTD.
Listing:
Tokyo
Securities Code: 4362
URL:
https://www.nipponseika.co.jp/en/
Representative:
Hiroshi Yano, Representative Director, President
Inquiries:
Yoshihiro Okura, General Manager Corporate Planning OfficeTEL:+81-6 -6231-4781
Scheduled date of annual general meeting of shareholders:June 23, 2023
Scheduled date to commence dividend payments:
June 26, 2023
Scheduled date to file annual securities report:
June 26, 2023
Preparation of supplementary material on financial results:
Yes
Holding of financial results meeting:Yes (for institutional investors andanalysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2023 (from April 1, 2022 toMarch 31, 2023)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Fiscal year ended
March 31, 2023
March 31, 2022

Operating profit

Millions of yen% Millions of yen

36,83833,448

Note: Comprehensive income

10.1
9.6

Reference:

3.6
23.9

Fiscal year ended March 31, 2023
Fiscal year ended March 31, 2022

Basic earnings per
share
Fiscal year ended
March 31, 2023
March 31, 2022

% Millions of yen

5,057
4,881

Diluted earnings
per shareYen

174.42
146.32

Profit attributable toowners of parent

Ordinary profit

5,389
5,127
¥4,836 million¥3,118 million

Return on equity

Yen

–
–

% Millions of yen

5.1
23.4

4,079
3,472

%

17.5
25.9

[55.1%][(41.4)%]

Ratio of ordinary
Ratio of operating
profit to total
profit to net sales
assets

%

%

%

9.2
8.1

9.7
9.5

13.7
14.6

Share of profit (loss) of entities accounted for using equity method
Fiscal year ended March 31, 2023¥-million
Fiscal year ended March 31, 2022¥-million(2) Consolidated financial position
Total assets
As ofMarch 31, 2023
March 31, 2022

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

56,67254,807

46,101
44,56079.9
79.8

1,984.58
1,851.84

Reference:

EquityAs of March 31, 2023
As of March 31, 2022

¥45,266 million¥43,732 million(3) Consolidated cash flows
Net cash provided by(used in) operating
activities

Net cash provided by(used in) investing
activities

Net cash provided by(used in) financing
activities

Cash and cash
equivalents at end of
periodMillions of yen

Millions of yen

Millions of yen

Millions of yen

1,439
2,285

(1,779)(2,741)(3,320)(1,399)7,766
11,410Fiscal year ended
March 31, 2023
March 31, 2022

2. Status of dividends
Annual dividends per share

Fiscal year ended
March 31, 2022
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024
(Forecast)First
quarterend

Secondquarterend

Third
quarterend

Fiscalyear-end

Yen

Yen

Yen

Yen

total

Total cash
dividends(Total)Payout ratio(Consolidated)

Dividend on
equity(Consolidated)%%

Yen Millions of yen

–

25.00

–

29.00

54.00

1,278

36.9

3.0

–

28.00

–

29.00

57.00

1,323

32.7

3.0

–

35.00

–

35.00

70.00

44.4

3. Forecast of financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31,
2024)
Net sales(Percentages indicate year-on-year changes.)
Basic
Profit attributable toOrdinary profit
earnings perowners of parent
share

Operating profit

Millions ofyen%Millions ofyen%Millions ofyen%Millions of
yen

%

Yen

Second quarter(cumulative)

18,000

(3.6)

2,100

(23.0)

2,280(21.5)

1,630(16.7)

71.46

Full year

38,000

3.2

4,800

(5.1)

5,150

(4.5)

3,600

(11.8)

157.83

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
Newly included: - (company name) Excluded: - (company name)(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards, etc.: None(ii) Changes in accounting policies other than (i): Yes(iii) Changes in accounting estimates: Yes(iv) Restatement: None
Note: For details, please refer to the attached document on page 12 “3. Consolidated financial
statements and main notes (5) Notes to consolidated financial statements (Changes inaccounting policies that are difficult to distinguish from changes in accounting estimates).”(3) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2023

25,372,447 shares

As of March 31, 2022

25,372,447 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2023

2,563,350 shares

As of March 31, 2022

1,756,940 shares(iii) Average number of shares outstanding during the period
Fiscal year ended March 31, 2023

23,388,950 sharesFiscal year ended March 31, 2022

23,730,529 shares

Reference: Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended March 31, 2023 (April 1, 2022 toMarch 31, 2023)(1) Non-consolidated operating results
Net sales
Fiscal year ended
March 31, 2023
March 31, 2022

Operating profit

Millions of yen

17,463
15,660% Millions of yen

11.5
21.7

Basic earnings per
share
Fiscal year ended
March 31, 2023
March 31, 2022

(Percentages indicate year-on-year changes.)

3,215
2,931

% Millions of yen

9.7
79.3

Diluted earnings per
share

Yen

144.08125.46

Ordinary profit

Yen

–
–

4,183
3,922

Profit% Millions of yen

6.7
69.2

3,370
2,977

%

13.2
107.0

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2023
March 31, 2022
Reference:

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

48,682
46,96635,731
34,86073.4
74.2

1,566.52
1,476.16

EquityAs of March 31, 2023
As of March 31, 2022

¥35,731 million¥34,860 million* Financial results reports are exempt from audit conducted by certified public accountants or an audit
corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements of the earnings outlook, etc. described in this document are based on theinformation currently obtained by the Company and certain assumptions that it deems reasonable, andare not intended to promise the achievement of such information. In addition, actual business results may
differ significantly due to various factors. Please refer to pages 3 and 4 of the attached materials “1.
Overview of operating results and others (4) Future outlook” for the conditions that are the premise of
the business forecast and precautions when using the business forecast.
The Company plans to hold a briefing session for institutional investors and analysts on Friday, May 12,2023. The presentation materials for Medium-term Management Plan, including financial results to be
distributed at this briefing, will be posted on the Company’s website on the same day.

NIPPON FINE CHEMICAL CO., LTD. (4362)○ Table of contents of attached materials
Index
1. Overview of operating results and others ................................................................................................. 2(1) Overview of operating results for the fiscal year ............................................................................... 2(2) Overview of financial position for the fiscal year .............................................................................. 3(3) Overview of cash flows for the fiscal year ......................................................................................... 3(4) Future outlook .................................................................................................................................... 3(5) Basic policy on profit sharing and dividends for the fiscal year and next fiscal year ........................ 4
2. Basic rationale for selection of accounting standards ............................................................................... 5
3. Consolidated financial statements and main notes ................................................................................... 6(1) Consolidated balance sheet ................................................................................................................ 6(2) Consolidated statement of income and comprehensive income ......................................................... 8(3) Consolidated statement of changes in equity ..................................................................................... 9(4) Consolidated statement of cash flows .............................................................................................. 11(5) Notes to consolidated financial statements ....................................................................................... 12(Notes on premise of going concern) ............................................................................................... 12(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates) .......................................................................................................................................... 12(Segment information) ..................................................................................................................... 12(Per share information) ..................................................................................................................... 15(Subsequent events) .......................................................................................................................... 15-1-

NIPPON FINE CHEMICAL CO., LTD. (4362)

1. Overview of operating results and others(1) Overview of operating results for the fiscal year
In the fiscal year under review, the Japanese economy was moving toward normalization as the spreadof COVID-19 decreased. Corporate earnings in the manufacturing industry were trending downward,
partly thanks to the impact of rising raw materials costs due to the weaker yen and higher resources
prices, but the economy as a whole continued to recover gradually. As for the future, restrictions onsocio-economic activities due to the COVID-19 pandemic are to be lifted, and a gradual economic
recovery centered on domestic demand is expected. However, there are also risks such as concerns
about a downturn due to rising commodities prices and the slowdown of overseas economies, and theintensification of the situation in Ukraine, so the uncertain situation is expected to continue.
In this business environment, the Group has been working to further strengthen its management baseand develop products that contribute to the expansion of earnings and expand sales.
As a result, net sales for the fiscal year under review increased to ¥36,838 million (up 10.1% year-onyear). In terms of profit, operating profit was ¥5,057 million (up 3.6% year-on-year), and ordinary
profit was ¥5,389 million (up 5.1% year-on-year). Profit attributable to owners of the parent was¥4,079 million (up 17.5% year-on-year).
Operating results for each segment are as follows.
(i) Industrial products businessIn this segment, the background was characterized by a gradual domestic and overseas economic
recovery. By business field, in the cosmetic ingredients business, sales grew due to cosmetic
ingredients newly used in products by customers and the gradual domestic and overseas recovery inthe cosmetics market. Moreover, in part due to an increase in export prices due to yen depreciation
as well as passing on surging import raw materials costs in sales prices, net sales of cosmetic
ingredients and lanolin and cholesterol increased. In the fine chemicals business, net sales
increased as we passed on surging raw material prices for fatty acid amides to our sales prices. As aresult, net sales was ¥27,183 million (up 15.2% year-on-year). Segment profit (operating profit)
was ¥3,958 million (up 9.3% year-on-year) due to increased quantities of cosmetic ingredients andimprovements in product mix, as well as positive effects of the yen depreciation.
(ii) Household products businessIn this segment, sales in the environmental hygiene field decreased as increase in the number of
COVID-19 cases slowed down and corporate demand for infection-control products declined. As aresult, net sales were ¥8,272 million (down 4.3% year-on-year). Segment profit (operating profit)
was ¥674 million (down 27.3% year-on-year) due to the impact of surging raw material prices.
(iii) Other
Net sales of other businesses was ¥1,382 million (up 15.1% year-on-year) and segment profit(operating profit) was ¥423 million (up 27.4% year-on-year).
Reference:Non-consolidated financial results were net sales of ¥17,463 million (up 11.5% year-on-year),
operating profit of ¥3,215 million (up 9.7% year-on-year), ordinary profit of ¥4,183 million (up6.7% year-on-year), and profit of ¥3,370 million (up 13.2% year-on-year).
The main factors behind the year-on year increases in net sales, operating profit, ordinary profit,and profit were the passing on of surging raw material costs in sales prices, an increase the sales-2-

NIPPON FINE CHEMICAL CO., LTD. (4362)

volume and improvement in product mix of cosmetic ingredients, and the positive effect of the yen
depreciation.
(2) Overview of financial position for the fiscal year
Total assets at the end of the fiscal year under review increased by ¥1,865 million from the end of theprevious fiscal year (hereinafter referred to as “the previous fiscal year-end”) to ¥56,672 million. Thiswas mainly due to a ¥2,498 million increase in non-current assets due to an increase in buildings andstructures, despite a decrease in current assets by ¥633 million due mainly to a decrease in cash anddeposits.
Liabilities at the end of the fiscal year under review increased by ¥324 million from the previous fiscal
year-end to ¥10,571 million. This was mainly due to an increase in current liabilities by ¥4 million due
mainly to an increase in notes and accounts payable-trade, and a ¥320 million increase in non-current
liabilities due to an increase in deferred tax liabilities.
The net assets at the end of the fiscal year under review increased by ¥1,540 million from the previous
fiscal year-end to ¥46,101 million. This was mainly due to an increase in shareholders’ equity by ¥866
million, mainly due to recording ¥4,079 million in profit attributable to owners of parent and ¥1,346
million in dividends paid, while accumulated other comprehensive income increased by ¥667 million,
mainly due to an increase in valuation difference on available-for-sale securities.
(3) Overview of cash flows for the fiscal year
Cash and cash equivalents at the end of the fiscal year under review (hereinafter referred to as “cash”)
decreased by ¥3,644 million from the previous fiscal year-end to ¥7,766 million. The status and main
breakdown of cash flows for the fiscal year under review are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities for the fiscal year under review amounted to ¥1,439 million, adecrease of ¥846 million from the previous fiscal year. The main breakdown was an increase in cash
due to profit before income taxes of ¥5,643 million and recording depreciation of ¥950 million, and adecrease in cash due to income taxes paid of ¥1,756 million.
(Cash flows from investing activities)
Net cash used in investment activities for the fiscal year under review decreased by ¥961 million fromthe previous fiscal year to ¥1,779 million. The main breakdown was due to a decrease in cash due topurchase of property, plant and equipment of ¥2,606 million.
(Cash flows from financing activities)
Net cash used in financial activities for the fiscal year under review increased by ¥1,920 million fromthe previous fiscal year to ¥3,320 million. The main breakdown was due to a decrease in cash due topurchase of treasury shares of 1,885 million and a decrease in cash due to dividends paid of ¥1,346
million.
(4) Future outlook
Looking at economic trends affecting the Group, the removal of restrictions on economic and social
activities due to COVID-19 is expected along with a gradual economic recovery centered on internal
demand. However, risks remain, including concerns of a downturn due to rising prices and theslowdown of overseas economies and the intensification of the situation in Ukraine. As such, thesituation is expected to remain uncertain.
In this business environment, as for the consolidated earnings forecasts for the fiscal year ending March
31, 2024, the Group forecasts net sales of ¥38,000 million (up 3.2% year-on-year), operating profit of-3-

NIPPON FINE CHEMICAL CO., LTD. (4362)¥4,800 million (down 5.1% year-on-year), ordinary profit of ¥5,150 million (down 4.5% year-on-year),and profit attributable to owners of parent of ¥3,600 million (down 11.8% year-on-year).
The main exchange rates used in the earnings forecasts are ¥130 per US$ and ¥130 per EUR.
(5) Basic policy on profit sharing and dividends for the fiscal year and next fiscal year
Our basic policy is to increase shareholder value, and we consider returning profits to shareholders as
one of the most important issues. We aim to improve and stabilize the level of dividends by targeting a
consolidated dividend on equity (DOE) of 3.0%.
With regard to retained earnings, we intend to invest effectively to build a foundation for further
growth, such as the development of new products, increased production capacity, digitization, thepromotion of sustainability, while ensuring that we are prepared for unforeseen situations such as largescale disasters and the spread of infectious diseases. We are confident that these investments will leadto an improvement in earnings in the future and a return of profits to shareholders.
Based on the above policy, the year-end dividend for the fiscal year under review is expected to be ¥29
per share. As a result, the annual dividends per share is ¥57 and the consolidated payout ratio is 32.7%.
Regarding the annual dividends for the next fiscal year, whereas the Company’s previous policy has
been to target a DOE of around 3.0% with the intention of increasing the dividend level and further
strengthening stability of shareholder returns, it has now decided to increase this to around 3.5%.
Accordingly, the annual dividends per share for the next fiscal year is expected to be ¥70 per share.

-4-

NIPPON FINE CHEMICAL CO., LTD. (4362)

2. Basic rationale for selection of accounting standards
The Group will adopt Japanese GAAP for the time being, but will consider introducing IFRS in light of the
deepening of discussions in the future and the status of IFRS adoption by other companies in the same
industry.

-5-

NIPPON FINE CHEMICAL CO., LTD. (4362)

3. Consolidated financial statements and main notes(1) Consolidated balance sheet(Thousands of yen)Previous fiscal year
(As of March 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Other
Total investments and other assets
Total non-current assets
Total assets-6-

Current fiscal year
(As of March 31, 2023)

12,862,645
8,703,595
3,087,092
2,116,475
3,216,976
239,580(2,095)30,224,271

8,937,431
8,855,955
4,001,642
2,290,016
4,718,263
788,202(695)
29,590,815

11,548,367(8,043,033)
3,505,334
14,359,320(13,043,647)
1,315,673
3,644,767
3,775,146
3,312,163(2,780,154)
532,008
12,772,930
307,314

14,960,944(8,223,518)
6,737,425
14,401,503(13,115,866)
1,285,637
3,719,989
1,794,239
3,535,871(2,845,786)
690,084
14,227,376
521,691

11,205,190
26,889271,010
11,503,089
24,583,335
54,807,607

12,017,715
67,408
247,729
12,332,853
27,081,921
56,672,737

NIPPON FINE CHEMICAL CO., LTD. (4362)(Thousands of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for environmental measures
Accounts payable - facilities
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Provision for environmental measures
Retirement benefit liability
Long-term accounts payable - other
Long-term guarantee deposits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

Previous fiscal year
(As of March 31, 2022)

Current fiscal year
(As of March 31, 2023)

3,928,700
757,375
985,079
778,695

4,256,778
839,820
607,013717,500

92,25979,752

61,332362,000
646,323
7,611,766–
459,535
655,448
7,615,849

2,267,152
117,223
111,707
15,600103,2369,430
11,0772,635,427
10,247,193

2,655,149–
144,956
15,600102,890
9,430
27,652
2,955,679
10,571,528

5,933,221
6,803,377
25,790,799(1,296,698)
37,230,699

5,933,221
6,821,920
28,513,077(3,171,070)
38,097,149

5,784,914
34,721
675,778
6,154
6,501,567
828,145
44,560,413
54,807,607

6,469,379
3,275
697,997(1,156)
7,169,496
834,562
46,101,208
56,672,737

NIPPON FINE CHEMICAL CO., LTD. (4362)(2) Consolidated statement of income and comprehensive income(Thousands of yen)Previous fiscal year
(From April 1, 2021
to March 31, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable toProfit attributable to owners of parent
Profit attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-8-

Current fiscal year
(From April 1, 2022
to March 31, 2023)

33,448,650
23,170,277
10,278,372
5,396,482
4,881,889

36,838,413
25,882,211
10,956,201
5,899,060
5,057,141

29,524
235,782
38,071
303,378

34,122
297,639
41,884
373,646

1,335
56,512311
58,1595,127,108

1,260
22,28817,34040,8905,389,897

37,011037,011

81,713
212,603294,31754,676
89,602
2,818
147,097
5,017,023
1,444,961
9,445
1,454,407
3,562,615

24,093–
16,88940,9835,643,232
1,383,761
94,044
1,477,806
4,165,426

3,472,343
90,272

4,079,580
85,845(890,622)
29,838406,9259,306(444,552)
3,118,063

684,465(34,947)
29,307(7,310)671,515
4,836,941

2,927,898

4,747,509

190,165

89,431NIPPON FINE CHEMICAL CO., LTD. (4362)(3) Consolidated statement of changes in equity
Previous fiscal year (From April 1, 2021 to March 31, 2022)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

Capital surplus

5,933,221

Retained earnings

6,803,377

23,358,507

Total shareholders’equityTreasury shares(1,025,109)

35,069,997

Changes during period
Dividends of surplus(1,032,982)(1,032,982)

Profit attributable to owners ofparent3,472,343

3,472,343

Purchase of treasury shares(271,589)

Employee welfare benefit fund(271,589)(7,069)(7,069)Net changes in items other thanshareholders’ equity––

2,432,291(271,589)

2,160,702

5,933,221

6,803,377

25,790,799(1,296,698)

37,230,699

Total changes during period
Balance at end of period

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

6,675,536

7,877

365,750

Total
Remeasureaccumulated
ments ofother
defined benefit
comprehensive
plansincome(3,152)

7,046,012

Noncontrollinginterests

Total net assets

730,739

42,846,750

Changes during period
Dividends of surplus(1,032,982)

Profit attributable to owners ofparent3,472,343

Purchase of treasury shares(271,589)

Employee welfare benefit fundNet changes in items other thanshareholders’ equity(7,069)(890,622)

26,844

310,0279,306(544,444)

97,405(447,038)

Total changes during period(890,622)

26,844

310,0279,306(544,444)

97,405

1,713,663

Balance at end of period

5,784,914

34,721

675,778

6,154

6,501,567

828,145

44,560,413-9-

NIPPON FINE CHEMICAL CO., LTD. (4362)

Current fiscal year (From April 1, 2022 to March 31, 2023)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

Capital surplus

5,933,221

6,803,377

Retained earnings
25,790,799

Total shareholders’equityTreasury shares(1,296,698)

37,230,699

Changes during period
Dividends of surplus(1,346,506)(1,346,506)

Profit attributable to owners ofparent4,079,580

4,079,580

Purchase of treasury shares
Disposal of treasury shares(1,885,533)(1,885,533)

11,161

29,704

18,542

Employee welfare benefit fund

(10,795)(10,795)

Net changes in items other thanshareholders’ equity–

18,5422,722,278(1,874,372)

866,449

5,933,221

6,821,920

28,513,077(3,171,070)

38,097,149

Total changes during period
Balance at end of period

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

5,784,914

34,721

675,778

Total
Remeasureaccumulated
ments ofother
defined benefit
comprehensive
plansincome6,154

6,501,567

Noncontrollinginterests

Total net assets

828,145

44,560,413

Changes during period
Dividends of surplus(1,346,506)

Profit attributable to owners ofparent4,079,580

Purchase of treasury shares(1,885,533)

Disposal of treasury shares

29,704

Employee welfare benefit fund

(10,795)

Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

684,465(31,445)

22,219(7,310)667,929

6,416

674,345684,465(31,445)

22,219(7,310)667,929

6,416

1,540,795

6,469,379

3,275

697,997(1,156)

7,169,496

834,562

46,101,208- 10 -

NIPPON FINE CHEMICAL CO., LTD. (4362)(4) Consolidated statement of cash flows(Thousands of yen)Previous fiscal year
(From April 1, 2021
to March 31, 2022)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on sale and retirement of property, plant andequipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in guarantee deposits received
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Dividends paid
Dividends paid to non-controlling interests
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 11 -

Current fiscal year
(From April 1, 2022
to March 31, 2023)

5,017,023
1,070,388
89,602
1,850(20,745)(26,889)(265,307)
1,335(8,259)2,818

5,643,232
950,946–(1,399)33,248(40,519)(331,761)
1,260(6,175)(195,714)

17,665(57,620)(757,736)(1,816,875)
4,022(62,613)(38,870)
3,207,407
265,307(1,335)(1,185,468)
2,285,910(147,820)(2,586,099)(345)
361,619(757,935)
2,864,915
331,761(1,260)(1,756,211)
1,439,205(96,200)–(2,813,261)
143,883(14,724)(1,149)40,020(2,741,431)–
290,100(2,606,730)
286,384(150,514)(1,165)401,966(1,779,960)(1,032,982)(90,567)(271,589)(4,617)(1,399,756)(1,346,506)(79,666)(1,885,533)(8,519)(3,320,225)

78,955

16,418(1,776,321)
13,187,098
11,410,777(3,644,561)
11,410,777
7,766,215

NIPPON FINE CHEMICAL CO., LTD. (4362)(5) Notes to consolidated financial statements(Notes on premise of going concern)
Not applicable.
(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates)
Change in the depreciation method for property, plant and equipment
The Company and its domestic consolidated subsidiaries had used the declining balance method as thedepreciation method for property, plant and equipment (however, the straight-line method had been used
for buildings acquired on or after April 1, 1998 [excluding facilities attached to buildings] and forfacilities attached to buildings and structures acquired on or after April 1, 2016), but this has beenchanged to the straight-line method from the fiscal year under review.
In the stable business environment of recent years, the Group secured stable earnings while updating andrepairing facilities. However, with expectations for large growth in the nanomedicine field, which uses
phospholipids for pharmaceuticals, we have positioned this field as a growth pillar and decided on a
specific capital investment plan based on our Medium-term Management Plan (announced in April 2018).
Using this decision as an opportunity, as we will continue to pursue aggressive capital investment, wehave reevaluated how we use the Group’s property, plant and equipment.
As a result of this evaluation, given the reality of the Group’s product demand, we expect the Group’s
property, plant and equipment to operate mostly stably over the long term and for construction and real
operations to begin steadily for the above capital investment projects in the fiscal year under review(fiscal year ended March 31, 2023). As such, from the fiscal year under review, we believe that using thestraight-line method as the depreciation method for property, plant and equipment is reasonable from thestandpoint of expense allocation. We also believe that it is more appropriate in reflecting the reality ofbusiness in terms of managing the Group’s performance, and have made the decision to change to thestraight-line method.
As a result of this change, operating profit, ordinary profit and profit before income taxes increased by¥174,421 thousand each, compared with the case where the previous method is used.
(Segment information)[Segment information]
1. Description of reporting segments
The Group’s reporting segments are subject to periodic review by the Board of Directors in order todetermine the allocation of management resources and evaluate performance, with separate
financial statements available among the constituent units of the Company and its subsidiaries.
The Company is developing comprehensive domestic and overseas strategies and businessactivities for its business units, which are organized by product and service, based on financial
statements that are segregated into the constituent units of the Company and its subsidiaries. The
Company’s reporting segments are “Industrial Products Business” and “Household Products
Business.”
The “Industrial Products Business” segment conducts manufacturing and sales, and stocking andsales of cosmetic ingredients, lanolin and cholesterol, phospholipids, functional coating agents,
resin additives, vegetable oils and fats, synthetic resin products, and other products. In “Household
Products Business,” we manufacture and sell commercial detergents, medicinal soap solutions,disinfectants, and fungicides.

- 12 -

NIPPON FINE CHEMICAL CO., LTD. (4362)

2. Method for calculating the amount of net sales, profits or losses, assets and other items by reporting
segment
The accounting method for the reported business segments is the same as the accounting method
used for the preparation of consolidated financial statements.
Profit of the reporting segment is based on operating profit. Internal revenue and transfer volumes
between segments are based on actual market prices.
3. Information on net sales, profits or losses, assets and other items for each reporting segment andinformation on the decomposition of profits
Previous fiscal year (From April 1, 2021 to March 31, 2022)
Reporting segment

Net sales
Revenue from contracts
with customers
Other revenue
Revenues from externalcustomers
Intersegment sales ortransfers
Total

Other
Note: 1(Thousands of yen)
Consolidated
Adjustment
financialamountstatement
Note: 2amounts
Note: 3

Industrial
products
business

Householdproducts
business

Total

23,600,987

8,646,258

32,247,246

891,231

33,138,477–

33,138,477

–

–

–

310,172

310,172–

310,172

23,600,987

8,646,258

32,247,246

1,201,403

33,448,650–

33,448,650

151,369

40,431

191,800

46,885

238,685(238,685)–

23,752,357

8,686,690

32,439,047

1,248,288

33,687,335(238,685)

33,448,650

Total

Segment profit

3,621,695

927,680

4,549,376

332,513

4,881,889–

4,881,889

Segment assets

25,971,194

4,063,543

30,034,738

3,067,669

33,102,407

21,705,199

54,807,607

803,442

99,913903,356

148,299

1,051,655

18,732

1,070,388

2,438,520

103,356

2,541,876

190,192

2,732,069–

2,732,069

Other items
Depreciation
Increase in property,
plant and equipment
and intangible assets

Notes: 1. The “Other” segment is a business segment that is not included in the reporting segment, and includes the realestate business and the business of entrusting pharmacology and safety tests.
2. The adjustments are as follows:(1) Adjustments to segment assets were ¥67,097 thousand (loss) for intersegment eliminations and ¥21,772,296
thousand for company-wide assets not allocated to each reporting segment. Corporate assets consist mainly of
surplus operating funds (cash and deposits), long-term investment funds (investment securities), and assets
related to administrative department at the parent company.
(2) Adjustments to depreciation, increase in property, plant and equipment and intangible assets of other items
pertain to company-wide assets not allocated to each reporting segment.
3. Segment profit is consistent with the operating profit in the consolidated statement of income and comprehensive
income.

- 13 -

NIPPON FINE CHEMICAL CO., LTD. (4362)

Current fiscal year (From April 1, 2022 to March 31, 2023)
Reporting segment

Net sales
Revenue from contracts
with customers
Other revenue
Revenues from externalcustomers
Intersegment sales ortransfers(Thousands of yen)
Consolidated
Adjustment
financialamountstatement
Note: 2amounts
Note: 3

Industrial
products
business

Householdproducts
business

Total

Other
Note: 1

Total

27,183,925

8,272,102

35,456,028

1,065,494

36,521,522–

36,521,522

–

–

–

316,890316,890–316,890

27,183,925

8,272,102

35,456,028

1,382,384

36,838,413–

36,838,413

272,645

31,0154

303,660

41,514345,174(345,174)–
36,838,413

Total

27,456,571

8,303,1170

35,759,688

1,423,899

37,183,587(345,174)

Segment profit

3,958,652

674,854

4,633,507

423,634

5,057,141–

5,057,141

Segment assets

30,073,988

3,899,782

33,973,771

2,908,403

36,882,174

19,790,563

56,672,737

732,51780,051

812,569

126,170

938,739

12,206

950,946

2,610,404

64,607

2,675,012

150,9432,825,955–

2,825,955

Other items
Depreciation
Increase in property,
plant and equipment
and intangible assets

Notes: 1. The “Other” segment is a business segment that is not included in the reporting segment, and includes the realestate business and the business of entrusting pharmacology and safety tests.
2. The adjustments are as follows:(1) Adjustments to segment assets were ¥89,545 thousand (loss) for intersegment eliminations and ¥19,880,108
thousand for company-wide assets not allocated to each reporting segment. Corporate assets consist mainly of
surplus operating funds (cash and deposits), long-term investment funds (investment securities), and assets
related to administrative department at the parent company.
(2) Adjustments to depreciation, increase in property, plant and equipment and intangible assets of other items
pertain to company-wide assets not allocated to each reporting segment.
3. Segment profit is consistent with the operating profit in the consolidated statement of income and comprehensive
income.

4. Disclosure of changes, etc. in reportable segments
Change in the depreciation method for property, plant and equipment
As provided in “Changes in accounting policies that are difficult to distinguish from changes inaccounting estimates,” the Company and its domestic consolidated subsidiaries had used thedeclining balance method as the depreciation method for property, plant and equipment (however,the straight-line method had been used for buildings acquired on or after April 1, 1998 [excluding
facilities attached to buildings] and for facilities attached to buildings and structures acquired on orafter April 1, 2016), but this has been changed to the straight-line method from the fiscal year underreview.
As a result of this change, compared to the previous method, segment profit increased by ¥141,059
thousand for the industrial products business, ¥9,731 thousand for the household products business,and ¥23,630 thousand for the other business.

- 14 -

NIPPON FINE CHEMICAL CO., LTD. (4362)

5. Information on impairment losses on non-current assets per reporting segment
Previous fiscal year (From April 1, 2021 to March 31, 2022)(Thousands of yen)
Industrial products
business

Householdproducts business––Impairment losses

Unallocatedamounts andelimination

Other
89,602

Total–

89,602Current fiscal year (From April 1, 2022 to March 31, 2023)
Not applicable.
(Per share information)
Previous fiscal year (From April 1,
2021 to March 31, 2022)
Net assets per share
Basic earnings per share(Yen)
Current fiscal year (From April 1, 2022
to March 31, 2023)

1,851.84

1,984.58

146.32174.42

Notes: 1. Diluted earnings per share are not listed because there is no potential stock.
2. The basis for calculating basic earnings per share is as follows.
Previous fiscal year (From April 1,
2021 to March 31, 2022)

Current fiscal year (From April 1,
2022 to March 31, 2023)

Basic earnings per share
Profit attributable to owners ofparent (Thousands of yen)

3,472,343

4,079,580

Value not attributable toshareholders of common shares(Thousands of yen)––

Profit attributable to owners ofparent pertaining to Ordinary
share/s (Thousands of yen)

3,472,343

4,079,580

Average number of shares
outstanding during the period(Shares)

23,730,529

23,388,950(Subsequent events)
Not applicable.

- 15 -