Consolidated Financial Results for the Year Ended March 31, 2020
(JPGAAP)May 15, 2020

Stock Exchange: Tokyo
Name of listed company: Nissan Chemical Corporation
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: KINOSHITA Kojiro, President
Inquiry to: DAIMON Hideki, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled dividend payment date : June 26, 2020
Scheduled date of annual shareholders' meeting: June 25, 2020
Scheduled date of submitting the Annual Securities Report : June 25, 2020
Supplemental information: Yes
Financial results meeting: Yes (for institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(1) Consolidated Operating Results(% indicates the rate of increase/decrease year on year)

OperatingincomeNet salesYear ended March 31, 2020
Year ended March 31, 2019
(Note) Comprehensive income:Ordinary
incomeNet income attributable toowners of parent

Million yen%

Million yen%

Million yen%

Million yen%

206,837

0.9

38,6474.2

40,003

2.3

30,7794.8

204,896

6.0

37,091

6.0

39,098

7.9

29,372

8.2

Year ended March 31, 2020

: 26,726 million yen, 2.0%

Year ended March 31, 2019

: 26,203 million yen, (14.8%)

Basic earnings
per share
Yen

Year ended March 31, 2020
Year ended March 31, 2019
(Reference) Equity in earnings of affiliates

Yen

210.09㸫

197.67

㸫

Ratio of ordinary
income tototal assets

Ratio ofnet income toshareholders' equity

Diluted net income
per share: Year ended March 31, 2020

: 945 million yen: Year ended March 31, 2019

: 970 million yen

Ratio of operating
income tonet sales

%

%

%

16.9

16.1

18.7

16.6

15.9

18.1

(2) Consolidated Financial Position
Total assets

As of March 31, 2020
As of March 31, 2019
(Reference) Shareholders' equity:

Net assets

Net assets
per share

Equity ratio

Million yen

Million yen%

Yen

249,522

185,52873.7

1,264.23

246,990

182,07473.0

1,220.35

As of March 31, 2020 : 183,917 million yen
As of March 31, 2019 : 180,345 million yen(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash and cash
equivalents at
end of period

Cash flows fromfinancing activities

Million yen

Million yen

Million yen

Million yen

Year ended March 31, 2020

35,550(15,624)(25,186)

30,639Year ended March 31, 2019

32,070(10,884)(22,563)

36,183

Total
cash dividends(annual)Dividend
Ratio ofpayoutdividendratio
to net assets(consolidated) (consolidated)

2. Cash Dividends
Cash dividends per shareFirst
quarter

Secondquarter

Yen

Year ended March 31, 2019

䠉

Third
quarter

Yen

40.00

Year-end

Yen㸫

AnnualYen

YenMillion yen

%

%

42.00

82.00

12,14641.5

6.9

13,14442.8

7.2

Year ended March 31, 2020

䠉

42.00

㸫

48.00

90.00

Year ending March 31, 2021
(Outlook)

䠉

46.00

㸫

50.00

96.00

44.8

3. Outlook of Consolidated Financial Results for the Fiscal Year Ending March 31, 2021 (From April 1, 2020 to March 31, 2021)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet sales

Net income attributable toowners of parent

Ordinary
incomeBasic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Six months
ending September 30, 2020

96,6000.1

16,100(10.7)

16,700(10.4)

12,500(13.9)

86.64

Year ending March 31, 2021

214,500

3.7

39,3001.7

40,4001.030,8000.1

214.23

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation): None(2) Changes of accounting policies and accounting estimates, and restatement
1. Changes of accounting policies due to revisions of accounting standards: None2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(3) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
As of March 31, 2020

: 146,000,000 shares

As of March 31, 2019

: 149,000,000 shares

2. Number of treasury shares
As of March 31, 2020

: 522,578 shares

As of March 31, 2019

: 1,217,872 shares

3. Average number of shares outstanding over the year
As of March 31, 2020

: 146,511,438 shares

As of March 31, 2019

: 148,593,042 shares(Note) The Company has introduced “Board Benefit Trust (BBT)” from the second quarter of the consolidated fiscal year,
and repurchased its own shares based on the trust agreement. As a result, treasury shares increased by 799 million yen.
Also, the shares held by the Trust are included in the number of treasury shares at the end of the period,
and they are included in the number of treasury shares deducted in calculating the average number of shares outstanding over the year.
The number of shares held by the Trust (included in treasury shares) at the end of the period was 166,200 shares.
In addition, the average number of shares held by the Trust during the period was 103,875 shares.
This is not included in the average number of shares outstanding.
* Presentation regarding implementation status of audit proceduresThis financial release is not subject to audit procedures based on Financial Instruments and Exchange Law in Japan.
Audit procedures of financial statements based on Financial Instruments and Exchange have not been completed at the time of disclosure.
* Explanations regarding appropriate use of business outlook and other special notes
The business outlook contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the outlook due to various factors.
The prerequisite information of outlook and other items are on page 3 to page 4.
For supplemental information, please refer to our website.
Financial results audio webcast will be released on our website as well.

Table of Contents for Attached Materials

1. Analysis of Business Performances and Financial Position ........................................................................................................... 2(1) Analysis of Business Performance ........................................................................................................................................... 2(2) Analysis of Financial Position ................................................................................................................................................... 4(3) Basic Policy on Distribution of Earnings and Dividends for current and next term ................................................................... 5

2. Management Policy ....................................................................................................................................................................... 6(1) Basic Management Policy ........................................................................................................................................................ 6(2) Target Management Indicator .................................................................................................................................................. 6(3) Mid-and Long-term Management Strategies and Issues to be addressed ............................................................................... 6

3. Basic Approach to the Selection of Accounting Standards .............................................................................................................. 7

4. Consolidated Financial Statements ............................................................................................................................................... 8(1) Consolidated Balance Sheets .................................................................................................................................................. 8(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income ..................................................10(3) Consolidated Statements of Changes in Net Assets ...............................................................................................................12(4) Consolidated Statements of Cash Flows ................................................................................................................................14(5) Notes to Consolidated Financial Statements ..........................................................................................................................15(Going Concern Assumption) ............................................................................................................................................15(Segment and Related Information) ...................................................................................................................................15(Per Share Information) .....................................................................................................................................................18(Significant Subsequent Events) ........................................................................................................................................18

1

1. Analysis of Business Performance and Financial Position(1) Analysis of Business Performance
The domestic economy continued to recover moderately in the current fiscal year (April 1, 2019 to March 31,2020) against the backdrop of an improvement in the employment and income environment. However, in addition
to the sluggish exports caused by the slowdown in the overseas economy, economic activity worldwide stagnatedin the second half of the fiscal year due to the impacts of COVID-19. Under these circumstance, sales of Basic
Chemicals decreased in the Chemicals Segment. In the Performance Materials Segment, Display Materials andSemiconductor Materials performed well. The Agricultural Chemicals Segment sales strongly increased. In the
Pharmaceuticals Segment, although sales of "Custom Chemicals" (custom manufacturing and process
researching services for pharmaceutical companies) increased, sales of drug discovery decreased.
As a result, operating and ordinary income achieved record highs for the sixth consecutive year and net income
attributable to owners of parent for the seventh consecutive year, exceeding the earnings outlook announced in
November.
(Million yen, amounts rounded down to the nearest million yen)

FY2018FY2019Year-on-year(Actual)

(Actual)

change

FY2019Change from

(Outlook)

OutlookNet sales

204,896

206,837+1,941

209,000△2,163Operating income

37,09138,647+1,556

38,600+47

Ordinary income

39,09840,003+905

39,700+303

29,372

30,779+1,40730,600+179

Net income attributableto owners of parent

 Explanations by segments are as below.
The Chemicals Segment
In Basic Chemicals, although sales of high purity sulfuric acid (agent used for cleaning semiconductor) increased, sales ofmelamine (adhesives agent for particle board) declined due to market conditions. In the Fine Chemicals, sales of "TEPIC"
for electrical materials (solder resist inks, LED-sealing materials, etc.) decreased, while sales for general use (powder
coating agent for paint) increased.
As a result, sales of this segment were 34,336 million yen (a decrease of 1,314 million yen) and operating income was
1,372 million yen (a decrease 1,674 million yen). Compared to the outlook, net sales were below 3.0 billion yen andoperating income was below 2.0 billion yen.
The Performance Materials Segment
In the Display Materials, sales of "SUNEVER" (LCD alignment coating) for both small-and medium-sized products suchas smartphones and large-scale products such as TVs performed well. In Semiconductor Materials, sales ofanti-reflective coating for semiconductors (ARC®*) increased, reflecting favorable operation by customers. In the
Inorganic Materials, sales of "SNOWTEX" for polishing electronic materials decreased. Sales of Organo / Monomer sol(various kinds of coating materials, resin additive) and Oilfield materials (for enhancing oil recovery) also decreased.
As a result, sales of this segment were 65,460 million yen (an increase of 2,428 million yen) and operating income was17,353 million yen (an increase of 2,386 million yen). Compared to the outlook, net sales were above 2.0 billion yen andoperating income was above 2.3 billion yen.
*ARC® is a registered trade mark of Brewer Science, Inc.

2

The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) decreased due to the impact of inventories ofcustomers. In domestic agrochemicals market, sales of "GRACIA" (insecticide) launched in May in Japan were strong.
"ROUNDUP" (non-selective leaf treatment herbicide) revenues increased from the previous year due to natural disasters
in the first half of the previous fiscal year, and remained steady in the second half of this fiscal year. In overseas
agrochemicals market, sales of "TARGA" (herbicide) decreased, but sales of "GRACIA" for the Korean market and“QUINTEC” (fungicide) acquired in the third quarter contributed to sales.
As a result, sales of this segment were 64,038 million yen (an increase of 1,313 million yen) and operating income was
19,303 million yen (an increase of 952 million yen). Compared to the outlook, net sales were below 0.3 billion yen andoperating income was below 0.3 billion yen.
The Pharmaceuticals Segment
Sales of "LIVALO" (anti-cholesterol drug) decreased, as selling prices fell due to an increase in sales of generic drugs
outside Japan, despite an increase in shipments in Japan. In "Custom Chemicals", sales of generic-active pharmaceuticalingredients increased steadily.
As a result, sales of this segment were 6,962 million yen (a decrease of 46 million yen) and operating income was 939
million yen (a decrease of 60 million yen). Compared to the outlook, net sales were the same and operating income was
below 0.2 billion yen.
Trading
Sales of this segment were 67,907 million yen (an increase of 27 million yen), and operating income was 2,113 million
yen (an increase of 75 million yen).Compared to the outlook, net sales were above 0.8 billion yen and operating income
was the same.
OthersSales of this segment were 22,394 million yen (a decrease of 2,215 million yen) and operating income was 693
million yen (a decrease of 229 million yen).
(Outlook of business result for the next term)(Billion yen, amounts rounded to the nearest billion yen)  
FY2019FY2020

Increase orRate of

ActualOutlookdecreasechange

(A)

(B)

(B-A)

(%)

Net sales

206.8

214.5

+7.7

+4%

Operating income

38.6

39.3

+0.7

+2%

Ordinary income

40.0

40.4

+0.4

+1%

30.8

30.8

+0.0

+0%

210.09 yen

214.23 yen+4.14 yen

+2%

109 yen108 yen--

Net income attributable toowners of parent
Basic earnings per share
Average U.S. dollar exchange
rate

㻌
㻌
㻌

3

㻌
Segment Sales and Operating Income(Billion yen, amounts rounded to the nearest billion yen)  㻌Net sales

Operating income (Note)

FY2019FY2020FY2019FY2020

ActualOutlook

ActualOutlookChemicals

34.3

35.6

1.3

2.7

Performance Materials

65.5

70.1

17.0

18.1

Agricultural Chemicals

64.0

65.5

19.3

18.4

Pharmaceuticals

7.0

6.4

0.9

0.4

Trading

67.9

68.2

2.1

2.0

Other

22.4

25.0

0.7

0.7

Adjustment‫ڹ‬54.3‫ڹ‬56.3‫ڹ‬2.7‫ڹ‬3.0

Total

206.8

214.5

38.6

39.3

As outlook of business result for the next term, we assume net sales will be 214.5 billion yen, operating income
will be 39.3 billion yen, ordinary income will be 40.4 billion yen and net income attributable to owners of parent willbe 30.8 billion yen. The above outlook is calculated on the assumption that the exchange rate will be 108 yen per
dollar.
The FY2020 outlook does not reflect the effects of the COVID-19 pandemic since they cannot be reasonably
assessed at this time due to the uncertainty of its ongoing impact on our business.
(Note) From the FY2020, the Company will change the method of totaling operating income by segments. For
the purpose of comparison, figures of the FY2019 have been calculated using the same method. Under the new
method, consolidation adjustments (such as unrealized gains on inventories and non-current assets) previously
allocated to individual segments are collectively processed with the adjustments for the entire company. The
impact of this change is minor.
(2) Analysis of Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of March 31, 2020 were 249,522 million yen (an increase of 2,531 million yen from the previous year). It ismainly due to the increase of notes and accounts receivable-trade, merchandise and finished goods, and intangible
assets.
Total liabilities as of March 31, 2020 were 63,993 million yen (a decrease of 922 million yen). It is mainly due to thedecrease of loans payable.
Net assets as of March 31, 2020 were 185,528 million yen (an increase of 3,454 million yen).
As a result of these factors, equity ratio was 73.7% (an increase of 0.7% from March 31, 2019).

4

(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation and gain andloss in working capital, net cash provided by operating activities for the consolidated fiscal year ended March 31, 2020
was 35,550 million yen (32,070 million yen for the previous year).
Due to investment on plant and equipment, net cash used in investing activities for the consolidated fiscal year ended
March 31, 2020 was 15,624 million yen (10,884 million yen for the previous year).
Due to share repurchase, payment for dividends and of long-term loans payable, net cash used in financing activities forthe consolidated fiscal year ended March 31, 2020 was 25,186 million yen (22,563 million yen for the previous year).
As a result of these factors, cash and cash equivalents for the consolidated fiscal year ended March 31, 2020 were
30,639 million yen (36,183 million yen for the previous year), reflecting exchange of 283 million yen. It decreased by
5,544 million yen compared to the previous year.
<Reference> The transit of Cash Flow indices
For the year ended

Shareholders’ equity ratio (%)

March 31, 2016

March 31, 2017

March 31, 2018

March 31, 2019

March 31, 2020

68.1

69.9

71.0

73.0

73.7

Shareholders’ equity ratio based
196.2

212.2

268.5

303.4

229.7

Debt repayment ratio (year)

1.1

0.9

0.8

0.8

0.7

Interest coverage ratio (times)

154.1

208.0

299.3

288.1

288.5

on market value (%)

Shareholders' equity ratio: shareholders' equity/total assets
Shareholders' equity ratio based on market value: market capitalization/total assets
Debt repayment ratio: interest-bearing liabilities/cash flows from operating activities
Interest coverage ratio: cash flows from operating activities/interest payments(Notes 1) All indicates are calculated based on consolidated financial figures.
(Notes 2) Market capitalization is calculated based on the number of shares outstanding, excluding treasury shares.
(Notes 3) Cash flows represents operating cash flow.
(Notes 4) Interest-bearing liabilities refer to all liabilities recorded in the consolidated balance sheets that incur interest.
(3) Basic Policy on Distribution of Earnings and Dividends for current and next term
The Company’s basic policy of profit allocation is returning to shareholders by improving company value
through increasing revenue in the medium and long terms.
In medium-term business plan “Vista2021” Stage II launched from April 2019, the company aimed to realize
dividend payout ratio to be 42.5% and total payout ratio to be 72.5% in FY2019, and we have achieved in
FY2019. After FY2019, the company aims to realize dividend payout ratio to be 45% and total payout ratio to be
75%.
The year-end dividend is expected to be 48 yen per share. Accordingly, the total annual dividend per share for the current
year ended March 31, 2020 will become 90 yen, which was 82 yen in the previous year.
Total annual dividends per share for the year ending March 31, 2021 is scheduled to be 96 yen (second quarter: 46 yen,
year-end: 50 yen).

5

2. Management Policy(1) Basic Management Policy
As a group growing with customers, we will strengthen the brand nurtured by our faithful corporate culture and maximize
corporate value through productive activities for the society.

(2) Target Management Indicator
Our most important objectives are “Return on Equity (ROE)” which represents the efficiency of managing shareholders’equity and “Ratio of operating income to net sales” which leads to a high-value added company. We will expand ourbusiness to increase our revenue.
We aim to realize Return on Equity (ROE) to be above 16% in medium term business plan “Vista 2021” Stage II launchedin April 2019. We have achieved it in FY2019.

(3) Mid-and Long-term Management Strategies and Issues to be addressed
In April 2019, we launched "Vista 2021" Stage II (FY2019 to FY2021) later three years of our medium-term business planthat sets out our vision for FY2021. In FY2019, the first year of the plan, we achieved our profit targets and record-highprofits.
However, in the second half of the fiscal year, the business environments changed due to the impact of worldwide spreadof COVID-19. In Japan, as a result of the announcement of an emergency situation, companies were forced to drasticallyrevise their work styles in response to requests to refrain from going out without necessity. The global economy has been
threatened by the economic downturn since the Great Depression.
Under these circumstances, on the premise that we will continue supplying products and services to our customers, wehave taken measures such as maximizing telecommuting based on the Business Continuity Plan we have long formulated.
Looking ahead, we must be prepared in advance for all possible risks that could threaten the survival of our business. And
preparing for a global recession is a pressing issue.
Based on the above conditions, the following issues are to be addressed in the long, medium-and short-term.

1) Long-term issue①Establish a stronger business portfolio
In our established businesses, we will further strengthen our business base by improving profitability of ammonia related
chemicals business, rebuilding the Pharmaceuticals business, and promoting smart-agriculture initiatives. We consider
entry into new business domains to be the most important issue and on April 1, 2020, we established the "Planning andDevelopment Division" to accelerate development in the areas defined as our core businesses in the future and to clarify
authority and responsibilities. We set up Life Sciences Materials Development Dept., Information & Communication
Materials Development Dept., and Environment & Energy Materials Development Dept. under the division to make every
effort to establish business domains through the creation of materials. By steadily promoting these initiatives, we aim toestablish a stronger business portfolio that is less susceptible to changes in the business environment.
②Proactive promotion of CSR(Corporate Social Responsibility) management
Based on ESG (Environmental, Social and Governance) and SDGs (Sustainable Development Goals), we are addressing

6

materiality issues that must be addressed in order to contribute to the resolution of social issues and realize our corporate
vision for FY2030. As for "Continuous improvement of responsible care activities," which is listed as materiality, we haveworked to reduce greenhouse gas emissions in response to the mitigation of climate change, and achieved significant
improvements in energy consumption per unit of production. In addition, recognizing that biodiversity is essential for thebuilding of a sustainable society, we are also actively participating in the partnership for private participation in biodiversity.
In the future, we will aim to conduct activities to conserve biotope (biological habitats) in all prefectures where ourheadquarters, factories, and research laboratories are located. Through these efforts, we will strive to realize our corporate
vision "becoming a corporate group that contributes to human survival and development."

2) Medium-and short-term issues①Maximizing profits and cash flows
Based on the basic strategies of the Medium-Term Management Plan, we will concentrate our management resources on
the products that will be the source of our growth and the development of new products. At the same time, we will work to
reduce assets by reducing costs, carefully examining and optimizing inventories, while revising research themes andreassessing personnel allocations with a view to the market.
②Responding to risks
In addition to natural disasters, we will analyze a wide range of risks related to the survival of our business, including risks
associated with new pandemics, climate change, etc. We will then take measures to ensure that we can maintain a soundbusiness system.
③Increased productivity
In order to respond to rapid changes in the business environment and to establish a competitive advantage, we will
actively promote digital transformation that utilizes digital technologies. We aim to transform ourselves to the corporategroup that shows high creativity applying the latest digital technologies to more stable operations, acceleration of R&D, andlabor saving in routine work etc. In addition, we will strive to provide an environment where employees can maximize theirstrengths by verifying effects of telework which was conducted to reduce the infection risk of COVID-19, and othermethods.

In FY2020, we will conduct our business activities under an economic environment that is even more difficult to predict
than in the past. Nevertheless, in all phases of our business activities, we will appropriately identify changes in society andsteadily implement measures to address various challenges in order to establish a more robust business base inaccordance with our corporate philosophy "We contribute to society in harmony with the environment, based on our
excellent technologies, products and services." We will make a concerted effort to become a corporate group that is trusted
by all stakeholders by enhancing the soundness and transparency of business, ensuring thorough compliance, giving
greater consideration to the environment, and promoting social contribution activities.
In confronting these and other challenges, we would like to ask our shareholders continued support and understanding.

3. Basic Approach to the Selection of Accounting Standards
The Company will research on trend of IFRS in the country and overseas and correspond properly when applying IFRS.

7

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million yen)
As ofMarch 31, 2020

As ofMarch 31, 2019
AssetsCurrent assets
Cash and deposits

36,18330,639Notes and accounts receivable - trade69,19372,509Merchandise and finished goods

32,21533,131

41

153

Raw materials and supplies

9,742

10,590Accounts receivable - other

2,207

2,765

Short-term loans receivable

512

2,045

2,427

2,387

(32)

(26)

152,490

154,196

Work in process

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

65,942

67,110

Accumulated depreciation and impairment loss

(40,690)(42,260)

Buildings and structures, net

25,251

24,850Machinery, equipment and vehicles

130,490

135,476(117,523)(123,035)

12,966

12,44038,45839,625(34,385)(35,829)

Accumulated depreciation and impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss

4,073

3,796

Land

Tools, furniture and fixtures, net

9,059

8,995

Construction in progress

1,378

1,499

Total property, plant and equipment

52,72951,581

Software

721

566

Other

796

6,812

1,517

7,379

35,22930,873

Intangible assets

Total intangible assets
Investments and other assets
Investment securities

110

721

Net defined benefit asset

Deferred tax assets

2,089

1,609

Other

2,917

3,244

Allowance for doubtful accounts

(92)

(84)

Total investments and other assets

40,25336,364

94,50095,325

246,990249,522

Total non-current assets
Total assets

8

(Million yen)
As ofMarch 31, 2019

As ofMarch 31, 2020

Liabilities
Current liabilities
Notes and accounts payable - trade

17,80916,876

Short-term loans payable

23,60522,898Current portion of long-term loans payable

1,860

640

Income taxes payable

4,330

6,167

Provision for bonuses

2,137

2,151

Provision for directors' bonuses

25

26

Other

10,430

11,254

Total current liabilities

60,19860,015

1,116

1,076

Deferred tax liabilities

823

76

Provision for business structure improvement

370

284

Provision for loss on business of subsidiaries and affiliates

309

309

-

46

152

208

Other

1,945

1,976

Total non-current liabilities

4,717

3,978

64,91663,993

Non-current liabilities
Long-term loans payable

Provision for share-based remuneration for directors(and other officers)
Net defined benefit liability

Total liabilities
Net assets
Shareholders' equity
Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

143,200

146,997

Treasury shares(6,291)(2,470)Total shareholders' equity

169,464

177,082

10,634

7,782

(11)

(896)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
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

9

258

(51)

10,880

6,834

1,728

1,610

182,074

185,528

246,990249,522

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)
Year Ended
March 31, 2019Year Ended
March 31, 2020

Net sales

204,896

206,837

Cost of sales

119,911

122,379

Gross profit

84,98584,458Selling, general and administrative expenses

47,89345,810Operating income

37,09138,647

Non-operating income
Interest income

3126

Dividend income

981

785

Equity in earnings of affiliates

970

945

Other

1,142

852

Total non-operating income

3,126

2,609

110

123

Non-operating expenses
Interest expenses
Loss on disposal of non-current assets

630

443

Plant stop losses

249

298

Foreign exchange losses

24

235

Other
Total non- operating expenses
Ordinary income

104

151

1,119

1,252

39,09840,003Extraordinary income
Gain on sales of investment securities

-

1,834

Total extraordinary income

-

1,834

-

834

Extraordinary losses
Licensing arrangement fee-

834

Income before income taxes and non-controlling interests

Total extraordinary losses

39,09841,003

Income taxes - current

8,690

10,102893

36

Total income taxes

Income taxes - deferred

9,583

10,138Net income

29,51430,864141

84

29,372

30,779Net income attributable to non-controlling interests
Net income attributable to owners of parent

10

- Consolidated Statements of Comprehensive Income(Million yen)
Year Ended
March 31, 2019
Net income

Year Ended
March 31, 2020

29,51430,864

Other comprehensive income(3,018)(2,851)

Foreign currency translation adjustment

(159)

(976)

Remeasurements of defined benefit plans, net of tax

(132)

(309)

(0)

(0)

(3,311)(4,137)

26,203

26,72626,083

26,733119(6)

Valuation difference on available-for-sale securities

Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests11(3) Consolidated Statements of Changes in Net Assets
䚷For the Year Ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(Million yen)
Total shareholders' equity
Capital stock

Balance at beginning of current
periodCapital surplus

18,942

13,613Retainedearnings

Treasury shares

133,822(5,962)

Total
shareholders'equity160,416

Changes of items during period
Dividends of surplus(11,320)(11,320)

Net income attributable to ownersof parent

29,372

29,372

Share repurchase
Cancellation of treasury shares(9,004)(9,004)(8,674)

8,674-

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

-

-

9,377

(329)

9,048

18,942

13,613

143,200(6,291)

169,464

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements
accumulateddifference ontranslationof defined benefit
otheravailable-for-saleadjustment
planscomprehensive
securities
incomeBalance at beginning of current
period13,653125

390

14,170Non-controllinginterests

1,778

Total
net assets

176,364

Changes of items during period
Dividends of surplus(11,320)

Net income attributable to ownersof parent

29,372

Share repurchase(9,004)

Cancellation of treasury shares-

Net changes of items other thanshareholders' equity(3,019)

(137)

(132)

(3,289)(49)(3,338)

Total changes of items during period(3,019)

(137)

(132)

(3,289)

(49)

5,709

Balance at end of current period

10,634(11)

258

10,8801,728

182,07412䚷For the Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(Million yen)
Total shareholders' equity
Capital stock

Balance at beginning of current
periodCapital surplus

18,942

13,613Retainedearnings

Treasury shares

143,200(6,291)

Total
shareholders'equity169,464

Changes of items during period
Dividends of surplus(12,360)(12,360)

Net income attributable to ownersof parent

30,77930,779

Share repurchase(10,801)(10,801)

(0)

0

0

(14,622)

14,622-

Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

-

-

3,797

3,821

7,618

18,942

13,613

146,997(2,470)177,082

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements
accumulateddifference ontranslationof defined benefit
otheravailable-for-saleadjustment
planscomprehensive
securities
incomeBalance at beginning of current
period10,634(11)

258

10,880Non-controllinginterests

1,728

Total
net assets

182,074

Changes of items during period
Dividends of surplus(12,360)

Net income attributable to ownersof parent

30,779

Share repurchase(10,801)

Disposal of treasury shares

0Cancellation of treasury shares-

Net changes of items other thanshareholders' equity(2,851)

(884)

(309)

(4,046)(117)(4,164)

Total changes of items during period(2,851)

(884)

(309)

(4,046)

(117)

3,454

Balance at end of current period

7,782

(896)

(51)

6,834

1,610

185,52813

(4) Consolidated Statements of Cash Flows(Million yen)
Year Ended
March 31, 2019Year Ended
March 31, 2020

Cash flows from operating activities
Income before income taxes and non-controlling interests

39,09841,003

Depreciation and amortization

10,915

10,516-28(1,013)(811)

Loss (gain) on sales of investment securities(296)(1,834)

Interest expenses

110

123

Loss (gain) on disposal of non-current assets

630

443

Decrease (increase) in notes and accounts receivable - trade(3,877)(3,656)

Decrease (increase) in inventories

Amortization of goodwill
Interest and dividend income(4,304)(2,352)

Increase (decrease) in notes and accounts payable - trade

(671)

(715)

Other

(617)

(263)

Subtotal

39,974

42,481

Interest and dividend income received

1,633

1,565

Interest expenses paid

(111)

(123)

Income taxes paid

(9,426)(8,373)

Net cash provided by (used in) operating activities

32,07035,550Purchase of investment securities

(910)

(657)

Proceeds from sales of investment securities

450

3,206

Cash flows from investing activities

Purchase of property, plant and equipment(9,747)(8,904)

Payments for retirement of property, plant and equipment

(525)

(391)

Purchase of intangible assets

(192)

(285)

-

(6,335)Net decrease (increase) in short-term loans receivable(2)(1,538)Purchase of long-term prepaid expenses

(46)

(645)

Other

90

(73)

(10,884)(15,624)

Net increase (decrease) in short-term loans payable

(46)

(653)

Proceeds from long-term loans payable

530

600

Payments for transfer of businessNet cash provided by (used in) investing activities
Cash flows from financing activities

Repayments of long-term loans payable(2,554)(1,860)Cash dividends paid

(11,320)(12,360)

(167)

(111)

(9,004)(10,801)(0)0(22,563)(25,186)

(141)

(283)

Net increase (decrease) in cash and cash equivalents(1,518)(5,544)

Cash and cash equivalents at beginning of period

37,702

36,183

Cash and cash equivalents at end of period

36,18330,639Dividends paid to non-controlling interests
Share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

14(5) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not applicable.

(Segment and Related Information)
Segment Information
1. General Information about reportable segments
The Company's reportable segments are components of the Group that engage in business activities, whose operating results are regularly
reviewed by the Board of Directors when making resource allocation and performance assessment decisions, and for which discrete financial
information is available.
Divisions by products and services are located in the headquarters, and each division works out a comprehensive strategy applicable to theirproducts and services and carries out their business activities.
The Company consists of segments based on divisions as follows:
Main Products

Segment

Basic chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc.)
Chemicals

Fine chemicals (epoxy compound for LED sealants, solder resist and painting,flame retardants, chlorinated cyanuric acid for sterilizing, etc.)
Display materials (LCD alignment coating, etc.)

Performance
Materials

Semiconductor materials (bottom anti-reflective coating for semiconductors, etc.)
Inorganic materials (hard coating materials, electronic information materials, polishing materials, etc.)

Agricultural Chemicals
Pharmaceuticals

Agrochemicals (herbicides, insecticides, fungicides, combination fungicide and insecticide, and plant growth regulators)
Animal health products
LIVALO (anti-cholesterol drug), etc.
Custom Chemicals (custom manufacturing and process researching services for pharmaceutical companies)

Trading

Trading, etc.

OthersFertilizer, landscaping, transportation, engineering, etc.

2. Basis of measurement of reported segment income or loss, segment assets and other material items
The accounting policies for the reportable segments are consistent with the Company's accounting policies used in the preparationof its consolidated financial statements. Intersegment sales and income (loss) are recognized based on current market prices.

15

3. Information Regarding Sales, Income (Loss), and Segment Assets of Reportable Segments
1) For the Year Ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
Performance Agricultural
Chemicals
Materials
Chemicals(Million yen)Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total
204,896

Sales
Customers

25,991

55,65557,513

6,968

48,562

10,188204,879

16

Intersegment

9,660

7,376

5,211

40

19,317

14,421

56,028(56,028)

㸫Total sales

35,651

63,03162,724

7,009

67,88024,610260,908(56,011)

204,896

Operating income (loss)

3,046

14,966

18,351

1,000

2,037

923

40,325(3,234)37,091

Segment assets

28,66951,256

61,818

9,063

25,507

11,479187,794

59,196

246,990

1,805

6,059

1,680

645

49

322

10,563350

10,913

Amortization of goodwill
1
Increase of property,
2,021
plant and equipment
and intangible assets(Notes 1) The adjustments are as follows:

㸫

㸫

㸫

㸫

㸫

1

㸫

1

3,246

3,326

502

122

438

9,658

280

9,938

Other items
Depreciation andamortization(1) The (3,234) million yen adjustment in segment income includes (405) million yen in intersegment eliminations, 16 million yen sales
not attributable to any reporting segment, and (2,845) million yen corporate expenses not attributable to any reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to segments.
(2) The 59,196 million yen adjustment in segment assets includes (11,968) million yen in intersegment eliminations and 71,165
million yen in corporate assets not attributable to any reportable segment. The corporate assets are mainly group administrative assets which
do not belong to segments.
(3) The 350 million yen adjustment in depreciation and amortization is corporation expenses.
(4) The 280 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets
are mainly group administrative assets which do not belong to segments.
2) For the Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
Performance Agricultural
Chemicals
Materials
Chemicals(Million yen)Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total
206,837

Sales
Customers

24,893

57,831

58,693

6,905

48,235

10,265

206,824

13

Intersegment

9,443

7,629

5,345

56

19,672

12,12854,276(54,276)-

Total sales

34,336

65,46064,038

6,962

67,90722,394

261,100(54,262)

206,837

Operating income (loss)

1,372

17,353

19,303

939

2,113

693

41,775(3,127)38,647

Segment assets

27,71150,17273,90910,55525,243

11,976

199,569

49,952249,522

1,865

5,069

2,197

591

85

360

10,171

345

10,516

Amortization of goodwill
1
Increase of property,
3,134
plant and equipment
and intangible assets(Notes 1) The adjustments are as follows:

㸫

27

㸫

㸫

㸫

28

㸫

28

3,276

7,902

597

104

366

15,381327

15,709Other items
Depreciation andamortization(1) The (3,127) million yen adjustment in segment income includes (230) million yen in intersegment eliminations, 13 million yen sales
not attributable to any reporting segment, and (2,909) million yen corporate expenses not attributable to any reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to segments.
(2) The 49,952 million yen adjustment in segment assets includes (11,924) million yen in intersegment eliminations and 61,877
million yen in corporate assets not attributable to any reportable segment. The corporate assets are mainly group administrative assets which
do not belong to segments.
(3) The 345 million yen adjustment in depreciation and amortization is corporation expenses.
(4) The 327 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets
are mainly group administrative assets which do not belong to segments.

16

Related Information
For the Year Ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
Sales by region(Million yen)
Other Asia Europe andConsolidated(except Japan the United
Total
and Korea)
States

Japan

Korea

107,131

22,341

43,35432,068204,896

Note: Sales are classified to either countries or regions based on customers are located.
For the Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
Sales by region(Million yen)
Other Asia Europe andConsolidated(except Japan the United
Total
and China)
States

Japan

China

109,217

22,84044,22430,554

206,837

Note: Sales are classified to either countries or regions based on customers are located.

Information regarding impairment loss on non-current assets by reportable segments
For the Year Ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
Not applicable.
For the Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
Not applicable.

Information regarding amortization and unamortized balance on goodwill by reportable segments
For the Year Ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
Chemicals

Balance as ofMarch 31, 20194

Performance
Materials

Agricultural
Chemicals䠉䠉Pharmaceuticals

Trading䠉

Others

䠉

Total

䠉

Adjustment

4䠉(Million yen)
Consolidated
Total

4

For the Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
Chemicals

Balance as ofMarch 31, 20203

Performance
Materials

Agricultural
Chemicals䠉

298

Pharmaceuticals

Trading䠉䠉17

OthersTotal

䠉Adjustment

301

䠉(Million yen)
Consolidated
Total

301

(Per Share Information)(Yen)
Year Ended March 31, 2019Year Ended March 31, 2020

Net assets per share

1,220.35

1,264.23

Net income per share

197.67210.09Notes:
1. Since residual securities do not exist, diluted net income per share is not presented.
2. The Company has introduced “Board Benefit Trust (BBT)” from the second quarter of the consolidated fiscal year,
and has recorded the shares held by the Trust as treasury shares in the consolidated financial statements.
Accordingly, for the purpose of calculating net assets per share, the shares held by the Trust (included in treasury shares) are
deducted from the number of shares outstanding at the end of the period.
In addition, for the purpose of calculating net income per share, the shares held by the Trust are
deducted in calculating the average number of shares outstanding during the period.
The number of shares held by the Trust at the end of the priod was 166,200 shares,
and the average number of shares held by the Trust during the period was 103,875 shares.
3. Net income per share is calculated on the following basis.
Year Ended March 31, 2019Year Ended March 31, 2020

Net income per share
Net income attributable to owners of parent (Million yen)

29,372

30,779Amounts not allocated to ordinary shares (Million yen)㸫㸫

Net income allocated to ordinary shares (Million yen)
Average number of ordinary shares
outstanding during each year (shares)

29,372

30,779148,593,042

146,511,438

4. Net assets per share is calculated on the following basis.
Year Ended March 31, 2019
Net asset (Million yen)

Year Ended March 31, 2020

182,074

185,528

Amount deducted from net asset (Million yen)

1,728

1,610

(Non-controlling interest) (Million yen)
Net asset as of year end allocated toordinary shares (Million yen)
Number of ordinary shares as of year
end used to calculate net asset per share(1,728)(1,610)180,345

183,917

147,782,128

145,477,422(Significant Subsequent Events)
The Company, at the Board of Director’s meeting held on May 15, 2020, has decided to repurchase its shares in the market
under Article 156 of the Japanese Corporation Act, as applied pursuant to Article 165, Paragraph 3 of the same Act.
(1) Purpose of repurchaseTo facilitate flexible implementation of capital policy in response to changes in the business environment.
(2) Details of repurchase䐟Class of shares:
䐠Total number of shares:

Common shares of the company
Up to 2,600,000 shares (Rate of the maximum shares to be acquired
to the total outstanding shares: 1.79%)

䐡Total amount:
䐢Period of repurchase:

Up to 7,000,000,000 yen
From May 18, 2020 to September 23, 2020

Reference
Number of treasury shares as of March 31, 2020
Total number of shares issued (excluding treasury shares): 145,643,622 shares
Number of treasury shares:
356,378 shares* Not including 166,200 shares of treasury shares which the Board Benefit Trust (BBT) has hold.

18