Consolidated Financial Results for the Year Ended March 31, 2017
(JPGAAP)May 12, 2017

Stock Exchange: Tokyo
Name of listed company: NISSAN CHEMICAL INDUSTRIES, LTD.
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Hironori Yoshida, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 3296 8356
Scheduled dividend payment date : June 29, 2017
Scheduled date of annual shareholders' meeting: June 28, 2017
Scheduled date of submitting the Financial Statement: June 28, 2017
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, 2017 (From April 1, 2016 to March 31, 2017)(1) Consolidated Operating Results(% indicates the rate of increase/decrease year on year)

Operating
IncomeNet Sales
Millions of Yen

Year Ended March 31, 2017
Year Ended March 31, 2016
(Note) Comprehensive Income:Ordinary
Income% Millions of Yen

180,289

1.9

31,438

176,894

3.3

28,606%

Millions of Yen%

9.9% Millions of Yen

31,713

7.4

24,026

7.5

12.9

29,531

11.9

22,35022.8

Year Ended March 31, 2017

: 23,771 million yen 10.5%

Year Ended March 31, 2016

: 21,508 million yen (10.7)%

Net Income
per Share

Diluted Net Income
per Share
Yen

Year Ended March 31, 2017
Year Ended March 31, 2016
(Reference) Equity in earnings of affiliates

Net Income Attributable to
Owners of ParentYen

156.97㸫

143.37

㸫

Ratio of Ordinary
Income toTotal Assets

Ratio ofNet Income to
Shareholders' equity: Year Ended March 31, 2017:

701 million yen: Year Ended March 31, 2016:

858 million yen

Ratio of Operating
Income to
Net Sales

%

%

%

15.1

13.8

17.4

14.6

13.1

16.2

(2) Consolidated Financial Position
Total Assets

Net Assets

Net assets
per share

Equity Ratio

Millions of Yen

Millions of Yen%

Yen

As of March 31, 2017

231,748

163,70769.9

1,067.76

As of March 31, 2016

228,169

156,92468.1

1,006.56(Reference) Shareholders' equity: As of March 31, 2017 : 162,041 million yen
As of March 31, 2016 : 155,392 million yen(3) Consolidated Cash Flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash and cash
equivalents at theend of period

Cash Flows from
Financing Activities

Millions of Yen

Millions of Yen

Year Ended March 31, 201732,491(13,152)

Millions of Yen(19,042)Millions of Yen

35,701

Year Ended March 31, 2016

29,989(8,416)(17,317)35,335

Total
Cash Dividends(Annual)Dividend
Ratio of
PayoutDividend
Ratio
to Net Assets(Consolidated) (Consolidated)

2. Cash Dividends
Cash Dividends per Share
First
Quarter

SecondQuarter

Yen

Year Ended March 31, 2016

䠉

Third
Quarter

Yen

18.00

Year-end

Yen㸫

AnnualYen

YenMillions of Yen

%

%

26.00

44.00

6,813

30.7

4.5

7,916

33.1

5.0

Year Ended March 31, 2017

䠉

24.00

㸫

28.00

52.00

Year Ending March 31, 2018
(Forecast)

䠉

28.00

㸫

32.00

60.00

35.8

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2018 (From April 1, 2017 to March 31, 2018)(% indicates the rate of increase/decrease against the same period of the previous year)
Operating
IncomeNet Sales
Millions of Yen% Millions of Yen

Six Months
Ending March 31, 201887,7003.8

15,000Year Ending March 31, 2018

189,000

4.8

32,500Ordinary
IncomeNet Income Attributable to
Owners of Parent

Net Income
per share% Millions of Yen%

Millions of Yen

%

Yen

1.8

15,1006.2

11,500

8.5

76.36

3.4

33,3005.0

25,2004.9

167.54

The above Net Income per share are calculated in consideration of share repurchase that will be implemented until July 31, 2017.

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: Yes

2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(Note) Please refer to (5) Notes to Consolidate Financial Statements, “Changes of Accounting Policies” on page 14 for details.
(3) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
as of March 31, 2017

: 154,000,000 shares

as of March 31, 2016

: 156,000,000 shares

2. Number of treasury shares
as of March 31, 2017

: 2,242,017 shares

as of March 31, 2016

: 1,620,587 shares

3. Average number of shares outstanding over the year
as of March 31, 2017

:153,058,176 shares

as of March 31, 2016

:155,893,811 shares* 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 forecasts and other special notes
The business forecast contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the forecast due to various factors.
The prerequisite information of actual forecast and other items are on page 3.
For supplemental information, please refer to our website.

Table of Contents for Attached Materials

1. Analysis of Business Performance 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 ........................ 4
2. Management Policy ................................................................................................................................. 5(1) Basic Management Policy ................................................................................................................. 5(2) Target Management Indicator ........................................................................................................... 5(3) Med-and Long-term Management Strategies and Issues to be addressed ....................................... 5
3. Basic Approach to the Selection of Accounting Standards ..................................................................... 6
4. Consolidated Financial Statements ......................................................................................................... 7(1) Consolidated Balance Sheets ........................................................................................................... 7(2) Consolidated Statements of Income and Statements of Comprehensive Income ............................. 9(3) Consolidated Statements of Changes in Net Assets ....................................................................... 11(4) Consolidated Statements of Cash Flows ......................................................................................... 13(5) Notes to Consolidated Financial Statements ................................................................................... 14(Notes on Assumption of Going Concern) .................................................................................. 14(Notes on Changes of Accounting Policies) ............................................................................... 14(Segment Information) ............................................................................................................... 15(Per Share Information) .............................................................................................................. 18(Significant Subsequent Events) ................................................................................................. 18

1

1. Analysis of Business performance and Financial Position(1) Analysis of Business Performance㻌㻌 During the year ended March 31, 2017 (from April 1, 2016 to March 31, 2017), the domestic economy has
been slowly recovering due to the improvement of income environment and employment situation though theindividual consumption seems weak. By contrast, the world economy has increased a sense of uncertain andforeign currency exchange and fuel prices have fluctuated.

㻌 㻌 In this situation, in our group business, the sales of Chemicals Segment strongly increased in both Basic
Chemicals and Fine Chemicals. In the Performance Materials Segment, the Display Materials had healthy sales.
In the Agricultural Chemicals Segment, the sales of Fluralaner (an active ingredient of veterinary pharmaceutical)
increased. In the Pharmaceutical Segment, the domestic sales of “LIVALO” (anti-cholesterol drug) decreased
due to expansion of generic products.

㻌 As a result of previously mentioned factors, the sales for this period were 180,289 million yen (an increase of
3,394 million yen from the same period of the previous year). Operating income was 31,438 million yen (anincrease of 2,832 million yen). Ordinary income was 31,713 million yen (an increase of 2,181 million yen). Net
income attributable to owners of parent was 24,026 million yen (an increase of 1,676 million yen).
 We have achieved the highest Operating income and Ordinary income for three consecutive years andregarding Net income attributable to owners of parent, we have achieved it for four consecutive years.

㻌 Explanations by segments are as below.
㻌Chemicals
In the Basic Chemicals, the export sales of MELAMINE (adhesive agent for particle board) strongly increased
but the fixed cost increased due to the plant investment for fuel conversion to Ammonia. In the Fine Chemicals,
the sales of “HI-LITE” (chlorinated isocyanuric acid for sterilizing) and “TEPIC” (special epoxy compound forsealant) increased.
As a result of these factors, the sales of this segment were 34,780 million yen (an increase of 433 million yen
from the same period of the previous year). Operating income was 3,820 million yen (a decrease of 107 million
yen).
 㻌
Performance Materials
In the Display Materials, “SUNEVER” (polyimide for LCD / flat panel displays) for smartphone had healthy
sales. In the Semiconductor Materials, multi-layer process materials (“Optistack®”) were adversely affectedby the lower capacity utilization ratio of some customers. In the Inorganic Materials, the sales of “SNOWTEX”(semiconductor polishing, hard coating, etc.) for non-polishing materials and ORGANOSILICASOL (various
kinds of coating materials) decreased.
 As a result of these factors, the sales of this segment were 52,809 million yen (an increase of 1,036million yen).
Operating income was 12,533 million yen (an increase of 512 million yen).
*Optistack® are registered trade mark of Brewer Science, Inc.

Agricultural Chemicals
The sales of “ALTAIR” (paddy rice herbicide) increased in both of domestic and overseas. As a whole, thesales increased due to the expansion of “ROUNDUP” (non-selective herbicide) and the launch of“TREFANOCIDE” (herbicide for cereal, soybean etc.). Furthermore, the shipment of Fluralaner (the active
substance of veterinary medical product) fairly expanded.
As a result of these factors, the sales of this segment were 51,952 million yen (an increase of 4,464 millionyen). Operating income was 13,201 million yen (an increase of 2,369 million yen).
2Pharmaceuticals
The shipment of “LIVALO” decreased in Japan due to expansion of generic products but increased inoverseas. Also, “Custom Chemicals” (custom manufacturing and process researching services forpharmaceutical companies) had healthy sales. Also, we entered into a joint research agreement
concerning ”novel drug candidates for autoimmune diseases” with Mitsubishi Tanabe Pharma Corporation andacquired incidental income. As a result of these factors, the sales of this segment were 7,992 million yen (adecrease of 676 million yen). Operating income was 1,656 million yen (a decrease of 349 million yen).
Trading
The sales of this segment were 55,198 million yen (a decrease of 445 million yen). Operating income was 1,697
million yen (a decrease of 115 million yen).

㻌
Others
The sales of this segment were 24,029 million yen (an increase of 3,150 million yen). Operating income was
966 million yen (an increase of 490 million yen).
(Forecast of business result for the next term)(Billions of yen)
Net Sales

Operating

Ordinary

Net Income attributable

Net Income per

IncomeIncometo Owners of Parent

Share (Yen)

Next Term

189.0

32.5

33.3

25.2

167.54Current Term

180.3

31.4

31.7

24.0

156.97

Segment Sales and Operating Income(Billions of yen)
Net Sales

Operating Income

Next Term

Current Term

Next Term

Current Term

Chemicals

35.5

34.8

3.6

3.8

Performance Materials

57.6

52.8

12.3

12.5

Agricultural Chemicals

56.3

52.0

15.6

13.2

Pharmaceuticals

6.9

8.0

0.9

1.7

Trading

61.5

55.2

2.0

1.7

Others

21.7

24.0

0.5

1.0

Adjustment(50.5)(46.5)

(2.4)

(2.5)

Total

189.0

180.3

32.5

31.4

We assume that critical situations will have continued to the next term due to the unpredictable economic trend
in domestic and overseas.
As forecast of business result for the next term, we assume that Net Sales will be 189.0 billion yen, Operating
income will be 32.5 billion yen, Ordinary income will be 33.3 billion yen and Net income attribute to owners ofparent will be 25.2 billion yen. The above forecast is calculated on the assumption that the exchange rate will be
110 yen per dollar.

3(2) Analysis of Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of March 31, 2017 were 231,748 million yen (an increase of 3,579 million yen from March 31,2016). It is mainly due to the increase of notes and accounts receivable - trade.
Also, total liabilities as of March 31, 2017 were 68,041 million yen (a decrease of 3,203 million yen). It is mainly
due to the decrease of long - term loans payable.
Net assets as of March 31, 2017 were 163,707 million yen (an increase of 6,782 million yen).
 As a result of these factors, equity ratio was 69.9% (an increase of 1.8 point from March 31, 2016).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation andgain and loss on working capital, net cash provided by operating activities for the year ended March 31, 2017
were 32,491 million yen (29,989 million yen for the same period of the previous year).
Due to the proceeds from sales of investment securities and the investment on plant and equipment, net cashused in investing activities for the year ended March 31, 2017 were 13,152 million yen (8,416 million yen).
Due to the share repurchase, payment for dividends and payments of long-term loans payable, net cash usedin financing activities for the year ended March 31, 2017 were 19,042 million yen (17,317 million yen).
As a result of these factors, cash and cash equivalents at the end of this period were 35,701 million yen
(35,335 million yen), reflecting 94 million yen effect of exchange rate changes and 25 million yen decrease in
cash and cash equivalents resulting from exclusion of subsidiaries from consolidation. It increased by 365 million
yen from March 31, 2016.
<Reference> The transit of Cash Flow indices

Shareholders' equity ratio (%)
Shareholders' equity ratio
on market value basis (%)
Debt repayment ratio (year)
Interest coverage ratio (times)

For the year Ended
March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017
63.0
65.7
66.9
68.1
69.9
93.1
1.7
62.0

119.5
1.5
82.6

175.4
1.7
91.5

196.2
1.1
154.1

212.2
0.9
208.0

Stockholders’ equity ratio: stockholders’ equity/total assets
Stockholders’ equity ratio on market value basis: aggregate market value of common stock/total assets
Debt repayment ratio: interest-bearing liabilities/cash flows from operating activities
Interest coverage ratio: cash flows from operating activities/interest payments*1: All indicates are calculated based on the consolidated financial figures.
*2: Aggregate market value of common stock is calculated by multiplying the market price at the end of eachfiscal year by the number of outstanding shares, excluding treasury stock, at the end of each fiscal year.
*3: Cash flow represents operating cash flow.
*4: Interest-bearing liabilities include all liabilities on 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 its value throughincreasing revenue in the medium and long terms.
 We aim to realize dividend payout ratio to be 40% for the year ended March 31, 2019 and maintain total
payout ratio to be 70% in medium-term business plan “Vista2021” launched from April 2016.
In line with our basic policy of profit allocation, the year-ended dividend is scheduled to be 28.00 yen per share.
Accordingly, the total annual dividend per share for the year ended March 31, 2017 will become 52.00 yen, which
was 44.00 yen in the previous fiscal year.
The total annual dividend per share for the fiscal year ended March 31, 2018 is scheduled to be 60.00 yen(second quarter: 28.00 yen, year-end: 32.00 yen).

4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 “Operate Profit Ratio to Sales” which leads to a high-value added company. We
will expand our business to increase our revenue.

(3) Mid-and Long-term Management Strategies and Issues to be addressed
The Nissan Chemical Group has identified that “foray into new business domains”, “development of new
products that match market trends”, and “enhancing R&D capability” as our tasks for realizing our vision,“cultivate the sustainable growth that will yield a brighter world for everyone”. To overcome these challenges
and secure growth, we launched “Progress 2030”, a long-term business plan for the period to 2030 and“Vista 2021”, a six-year medium-term business plan showing our ideal situation of 2021, in April 2016.
Under this circumstance, we adopted new business model called “Future-Creating Enterprise that responds
to social needs with unique, innovative technologies.” We will aim to grow continuously in synergy withsociety by helping to solve social issues such as global warming, energy problems and food shortages.
We have set up the following three basic strategies on Stage I, the first three years (2016 to 2018) of
medium-term business plan “Vista 2021”.
1)

Maximize the profit from existing products

Boost the market shares of products for growing fields, expand overseas business and reduce costs.
2)

Improve marketing capability

Identify market needs by reducing the distance between customers and obtain information about
advanced materials.
3)

Enhance research and development capability

Advance existing technologies and establishing new technologies by open innovation.

Regarding the first strategy “Maximize the profit from existing products”, veterinary medicinal product“BRAVECTO”, made from our invention Fluralaner (ingredients), has been sold more than 80 countries allover the world as a chewable tablet for dogs. In addition to this, a chewable tablet for cats has beenlaunched from last year. We are increasing the capacity to meet the high demands. We try to expand the
spread area and sales channels by increasing the lineup of “ALTAIR” (paddy rice herbicide) and“ROUNDUP” (non-selective herbicide). We try to expand the sales by increasing the share of existingcustomers and acquiring new customers of “SUNEVER” (LCD alignment coating).
Regarding the second strategy “Improve marketing capability”, we opened a new office in Santa Clara,
located in Silicon Valley district of California State (the United States of America). We will acquire not only
new technology and materials but also collect and evaluate information of advanced materials andunprecedented business model, which will lead to a new business . We think this activity will be useful to5

train resources who could be a key person to create new products. In June 2016, we established a local
corporation “Nissan Chemical Do Brasil” in Brazil. We try to grasp the need of world largest pesticide
market as well as enforcing sales, improving technical service and aiming to expand in remarkable growing
countries such as Argentina and Chile. In addition to this, we are planning to establish a new corporation inIndia, aiming to spread pesticide, support development and investigate local information. A new R&D centeris also planned to establish in China, aiming to fulfill customer support in expanding display market.
Regarding the third strategy “Enhance research and development capability”, we have purchased
patents and expertise related organic LED materials from Solvay, which is a company in Belgium. As
coating-type organic LED material market is about to launch, we will accelerate the development.
Comprehensive Collaboration with Kyushu University from 2006 started as “Biological material creating
collaboration” from last year and we began to research material of regenerative medicine and transdermal
DDS.

We have established CSR committee in April 2017.This will encourage improving transparency ofmanagement, compliance with laws and social imperative, contribution to environment and society under
the Corporate Philosophy, “Nissan Chemical Industries, Ltd. contributes to society with superior technology,
products, and services, while striving for harmony with the environment”. We will raise the collective effort tobecome a group trusted by all of our stakeholders.

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.

6

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of
March 31, 2016

As ofMarch 31, 2017

AssetsCurrent assets
Cash and deposits

35,33535,701

Notes and accounts receivable - trade57,60660,075Merchandise and finished goods

30,19828,602Work in process
Raw materials and supplies

43

64

8,266

7,778

Accounts receivable - other

4,726

2,379

Short-term loans receivable

1,039

1,065

Deferred tax assets

2,968

2,708

Other

2,030

2,221

(34)

(33)

142,181

140,564

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss

59,66262,253(37,027)(38,428)

Buildings and structures, net

22,63523,824

Machinery, equipment and vehicles

116,267

120,540(107,181)(109,038)

9,086

11,50233,82835,717(28,819)(30,880)

5,008

4,837

9,195

9,198

116

103

Accumulated depreciation

(87)

(90)

Leased assets, net

28

12Construction in progress

1,506

2,594

Total property, plant and equipment

47,461

51,969Software

476

610

Other

426

966

Total intangible assets

903

1,577

33,251

32,465

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

Intangible assets

Investments and other assets
Investment securities
Deferred tax assets

99

125

Net defined benefit asset

2,086

1,987

Other

2,354

3,156

Allowance for doubtful accounts

(167)

(98)

37,62337,636

Total investments and other assets
Total non-current assets
Total assets

7

85,98891,183

228,169

231,748

(Millions of Yen)
As of
March 31, 2016

As ofMarch 31, 2017

Liabilities
Current liabilities
Notes and accounts payable - trade

15,35014,943

Short-term loans payable

22,93823,155Current portion of long-term loans payable

3,060

3,070

Income taxes payable

4,576

3,288

Provision for bonuses

1,874

1,920

Provision for directors' bonuses

21

28

Provision for environmental measures

350

-

Other

9,765

11,259Total current liabilities

57,937

57,665Long-term loans payable

7,100

4,580

Deferred tax liabilities

3,095

2,649

Non-current liabilities

Provision for business structure improvement

680

594

Provision for loss on business of subsidiaries and associates

309

309

Net defined benefit liability

102

101

Other

2,020

2,141

Total non-current liabilities

13,307

10,376

71,24468,041

Capital stock

18,942

18,942

Capital surplus

13,611

13,611Retained earnings

115,878

126,370

Treasury shares(4,281)(7,587)

Total Shareholders' equity

144,151

151,337

10,515

10,079Foreign currency translation adjustment

171

243

Remeasurements of defined benefit plans

554

380

11,241

10,703

Total liabilities
Net assets
Shareholders' equity

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

Total Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net aseets

8

1,531

1,666

156,924

163,707

228,169

231,748

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Millions of Yen)
Year Ended
March 31, 2016

Year Ended
March 31, 2017

Net sales

176,894

180,289

Cost of sales

106,146

105,916Gross profit

70,74874,372

Selling, general and administrative expenses

42,14242,934

Operating income

28,606

31,438Non-operating income
Interest income

16

20

Dividend income

580

726

Share of profit of entities accounted for using equity method

858

701

Other

1,022

805

Total Non-operating income

2,478

2,253

Non-operating expenses
Interest expenses

194

156

Loss on disposal of non-current assets

319

601

Plant stop losses

327

274

Product compensation expenses

211

-

-

220

Impairment loss
Foreign exchange losses

165

314

Other

334

411

Total Non-operating expenses

1,552

1,978

29,531

31,713Gain on sales of investment securities

3,081

-

Total Extraordinary income

3,081

-

Ordinary income
Extraordinary income

Extraordinary losses
Impairment loss
Loss on business of subsidiaries and associates
Total Extraordinary losses

3,941

-

311

-

4,253

-

28,36031,713

Income taxes - current

7,955

7,439

Income taxes - deferred(2,151)81

Total income taxes

5,804

7,520

Net income

22,55624,192

Income before income taxes and non-controlling interests

Net income attributable to non-controlling interests
Net income attributable to owners of parent

9

206

166

22,35024,026

- Consolidated Statements of Comprehensive Income(Millions of Yen)
Year Ended
March 31, 2016
Net income

Year Ended
March 31, 2017

22,55624,192

Valuation difference on available-for-sale securities

(159)

(436)

Foreign currency translation adjustment

(800)

188

Remeasurements of defined benefit plans, net of tax

(84)

(174)

Share of other comprehensive income of entities accounted for using equity
method(1)

1

Other comprehensive income

Total other comprehensive income
Comprehensive income(1,047)(420)

21,50823,771

21,38023,584

127

186(Comprehensive income attribute to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests10(3) Consolidated Statements of Changes in Net Assets
䚷For the Year Ended March 31, 2016 (From April 1, 2015 to March 31, 2016)(Millions of Yen)
Total shareholders' equity
Capital stock

Balance at beginning of current
periodRetainedearnings

Capital surplus

18,942

13,611

Treasury shares

105,602

(584)

Total
shareholders'equity137,572

Changes of items during period
Dividends of surplus(6,269)(6,269)Net income attributable to ownersof parent

22,35022,350Change of scope of consolidation

(500)

(500)

Share repurchase(9,001)(9,001)00

Disposal of treasury shares

0Cancellation of treasury shares(0)(5,304)

5,304

-

-

-

10,276(3,696)

6,579

18,942

13,611

115,878(4,281)

144,151

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

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements
accumulateddifference ontranslationof defined benefit
otheravailable-for-saleadjustment
planscomprehensive
securities
incomeBalance at beginning of current
period10,676894

639

12,210Non-controllinginterests

1,481

Total
net assets

151,263

Changes of items during period
Dividends of surplus(6,269)Net income attributable to ownersof parent

22,350Change of scope of consolidation(500)

Share repurchase(9,001)

Disposal of treasury shares

0Cancellation of treasury shares-

Net changes of items other thanshareholders' equity

(161)

(722)

(84)

(969)

50

(918)

Total changes of items during period

(161)

(722)

(84)

(969)

50

5,660

Balance at end of current period

10,515

171554

11,241

1,531

156,92411

䚷For the Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(Millions of Yen)
Total shareholders' equity
Capital stock

Balance at beginning of current
periodRetainedearnings

Capital surplus

18,942

13,611

Treasury shares

115,878(4,281)

Total
shareholders'equity144,151

Changes of items during period
Dividends of surplus(7,680)(7,680)Net income attributable to ownersof parent

24,02624,026

Change of scope of consolidation

(157)

(157)

Share repurchase(9,002)(9,002)00

Disposal of treasury shares

0Cancellation of treasury shares(0)(5,695)

5,695

-

-

-

10,492(3,305)

7,186

18,942

13,611

126,370(7,587)

151,337

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

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements
accumulateddifference ontranslationof defined benefit
otheravailable-for-saleadjustment
planscomprehensive
securities
incomeBalance at beginning of current
period10,515

171554

11,241

Non-controllinginterests

1,531

Total
net assets

156,924

Changes of items during period
Dividends of surplus(7,680)Net income attributable to ownersof parent

24,026

Change of scope of consolidation(157)

Share repurchase(9,002)

Disposal of treasury shares

0Cancellation of treasury shares-

Net changes of items other thanshareholders' equity

(435)

72

(174)

(537)

134

(403)

Total changes of items during period

(435)

72

(174)

(537)

134

6,782

Balance at end of current period

10,079243

380

10,703

1,666

163,70712

(4) Consolidated Statements of Cash Flows(Millions of Yen)
Year Ended
March 31, 2016

Year Ended
March 31, 2017

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

28,36031,713

Depreciation

9,684

8,889

Impairment loss

3,941

220

Interest and dividend income

(597)

(746)

Interest expenses

194

156

Increase (decrease) in provision for business structure improvement

(23)

(86)

Increase (decrease) in provision for loss on business of subsidiaries andassociates

309-

Loss (gain) on sales of investment securities(3,081)-

Loss (gain) on disposal of non-current assets

319

601

Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade143(2,573)(2,716)

2,054

352

(334)

Other

(514)

(474)

Subtotal

36,372

39,419Interest and dividend income received

1,177

2,175

Interest expenses paid

(194)

(156)

Income taxes paid

(7,366)(8,947)

Net cash provided by (used in) operating activities

29,98932,491

Cash flows from investing activities
Purchase of investment securities

(331)

(787)

Proceeds from sales of investment securities

2,206

2,988

Purchase of property, plant and equipment(9,071)(12,394)

Payments for retirement of property, plant and equipment

(262)

(477)

Purchase of intangible assets(383)(1,091)

Net decrease (increase) in short-term loans receivable

(216)

(12)

Purchase of long-term prepaid expenses

(844)

(834)

Other

485

(542)

(8,416)(13,152)

54

220

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

1,100

550

Repayments of long-term loans payable(3,090)(3,060)Cash dividends paid

(6,269)(7,680)

Dividends paid to non-controlling interests
Purchase of treasury shares
Other
Net cash provided by (used in) financing activities

(70)

(52)

(9,001)(9,002)

(40)

(17)

(17,317)(19,042)

Effect of exchange rate change on cash and cash equivalents

(324)

94

Net increase (decrease) in cash and cash equivalents

3,931

390

Cash and cash equivalents at the beginning of period

31,34335,335

Increase in cash and cash equivalents from newly consolidated subsidiary

61-

Decrease in cash and cash equivalents resulting from exclusion of subsidiaries
from consolidation

-

(25)

35,33535,701

Cash and cash equivalents at the end of period13(5) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not applicable.

(Changes in Accounting Policies)
Effective from the beginning of the first quarter of current consolidated fiscal year, the Company adopted
the “Practical Solution on a change in depreciation method due to Tax Reform 2016” (Practical Issue Task
Force (PITF) No.32, issued on June 17, 2016) in accordance with the revision of the Corporation Tax Law
of Japan. Accordingly, the Company changed the depreciation method for facilities attached to buildings
and structures acquired on and after April 1, 2016 from the declining-balance method to the straight-line
method.
The impact of this change on Operating income, Ordinary income, and Income before income taxes andNon-controlling interests for the current consolidated fiscal year was immaterial.

14

(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 headquarter, and each division works out a comprehensive
strategy applicable to their products 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 retardant, chlorinated isocyanuric 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

Agricultural Chemicals (herbicide, insecticide, fungicide, fungicide and insecticide, plant growth regulator)
active substance of veterinary medical product
LIVALO (anti-cholesterol drug), etc.
Custom Chemicals (custom manufacturing and process services for pharmaceutical companies)

Trading

Trading, etc.

Otherstransportation, landscaping, engineering, fertilizer, 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, 2016 (From April 1, 2015 to March 31, 2016)
Performance Agricultural
Chemicals
Materials
Chemicals(Millions of Yen)

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total
176,894

Sales
Customers

25,15945,84043,695

8,668

43,014

10,516

176,894䠉Intersegment

9,187

5,932

3,792

㸫

12,63010,362

41,905(41,905)㸫Total Sales

34,347

51,77347,487

8,668

55,64420,879218,800(41,905)

176,894

Operating Income (loss)

3,927

12,021

10,831

2,006

1,813

475

31,075(2,469)28,606

Segment Assets

26,64340,972

52,917

11,144

19,672

10,147

161,498

66,671

228,169

1,427

5,124

1,411

818

57

386

9,226

403

9,629

Amortization of goodwill㸫
Increase of property,
2,264
plant and equipment
and intangible assets
Notes 1. The adjustments are as follows:

51

㸫

㸫

2

㸫

54

㸫

54

5,405

1,298

438

15

441

9,863

381

10,245

Other items
Depreciation andamortization(1) The (2,469) million yen adjustment in segment income includes (361) million yen in intersegment eliminations, and (2,107) 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 66,671 million yen adjustment in segment assets includes(11,172) million yen in intersegment

eliminations and 77,843

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 403 million yen adjustment in depreciation and amortization is corporation expenses.
(4) The 381 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, 2017 (From April 1, 2016 to March 31, 2017)
Performance Agricultural
Chemicals
Materials
Chemicals

Pharmaceuticals(Millions of Yen)
Trading

Others

Total

Adjustment(1)

Consolidated
Total
180,289

Sales
Customers

25,723

46,40347,791

7,966

42,281

10,108180,27414Intersegment

9,057

6,406

4,160

26

12,916

13,921

46,489(46,489)㸫

Total Sales

34,78052,80951,952

7,992

55,19824,029226,764(46,474)

180,289

Operating Income (loss)

3,820

12,533

13,201

1,656

1,697

966

33,875(2,437)31,438Segment Assets

26,11348,02855,588

10,182

19,782

10,731

170,426

61,322

231,748

1,613

4,763

1,336

705

59

330

8,808

79

8,887

Amortization of goodwill㸫
Increase of property,
2,000
plant and equipment
and intangible assets
Notes 1. The adjustments are as follows:

㸫

㸫

㸫

2

㸫

2

㸫

2

8,404

2,416

903

46

299

14,070229

14,299Other items
Depreciation andamortization(1) The (2,437) million yen adjustment in segment income includes (285) million yen in intersegment eliminations, 14 million yen sales
not attributable to any reporting segment, and (2,165) 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 61,322 million yen adjustment in segment assets includes (9,338) million yen in intersegment eliminations and 70,660
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 79 million yen adjustment in depreciation and amortization is corporation expenses.
(4) The 229 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, 2016 (From April 1, 2015 to March 31, 2016)
Sales by region(Millions of Yen)
Other Asia
Europe andConsolidated(except
the United
Total
Japan, Korea)
States

Japan

Korea

104,032

18,401

34,39820,062

176,894

Note: Sales are classified to either countries or regions based on customers are located.
For the Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)
Sales by region
Other Asia
(except
Japan,Korea)

Japan

Korea

103,077

15,51339,286(Millions of Yen)
Europe andConsolidated
the United
Total
States

22,412

180,289

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, 2016 (From April 1, 2015 to March 31, 2016)

Impairment loss

Chemicals

Performance
Materials

Agricultural
Chemicals

䠉

3,941

䠉

Pharmaceuticals

Trading䠉

Others䠉(Millions of Yen)
Consolidated
Total

Total

䠉

Adjustment

3,941

䠉

3,941

For the Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Others(Millions of Yen)
Consolidated
Total

Total

Adjustment

Impairment loss
䠉
䠉
䠉
䠉
䠉
䠉
䠉
(Note) 220 million yen adjustment is impairment loss on our head office involved in head office relocation.

220

220

Information regarding amortization and unamortized balance on goodwill by reportable segments
For the Year Ended March 31, 2016 (From April 1, 2015 to March 31, 2016)

Balance as ofMarch 31, 2016

Chemicals

Performance
Materials

Agricultural
Chemicals䠉㸫㸫Pharmaceuticals

Trading䠉

Others䠉

2(Millions of Yen)
Consolidated
Total

Total

Adjustment

2

䠉

2

For the Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)

Balance as ofMarch 31, 2017

Chemicals

Performance
Materials

Agricultural
Chemicals䠉㸫㸫Pharmaceuticals

Trading䠉

Others017(Millions of Yen)
Consolidated
Adjustment
Total

Total

䠉

0

䠉

0

(Per Share Information)(Yen)
Year Ended March 31, 2016

Year Ended March 31, 2017

Net asset per share

1,006.56

1,067.76

Net income per share

143.37156.97

Notes:
1. Since residual securities do not exist, diluted net income per share is not presented.
2. Net income per share is calculated on the following basis.
(Millions of Yen)
Year Ended March 31, 2016

Year Ended March 31, 2017

Net income per share
Profit attribute to owners of parent

22,35024,026

Amounts not allocated to ordinary shares㸫㸫

Net income allocated to ordinary shares
Average number of ordinary shares
outstanding during each year

22,35024,026

155,893,811

153,058,176

3. Net asset per share is calculated on the following basis.
(Millions of Yen)
Year Ended March 31, 2016
Net asset

Year Ended March 31, 2017

156,924

163,707

Amount deducted from net asset

1,531

1,666

(Non-controlling interest)
Net asset as of year end allocated toordinary shares
Number of ordinary shares as of year
end used to calculate net asset per share(1,531)(1,666)

155,392

162,041

154,379,413

151,757,983(Significant Subsequent Events)
1.The Company, at the Board of Director’s meeting held on April 25, 2017, has decided to cancel its own
shares under Article 178 of the Japanese Corporation Act.
(1) Class of shares to be cancelled :Common shares of company(2) Number of shares to be cancelled :(1.30% of issued shares prior to cancellation)

2,000,000 shares(3) Scheduled date of cancellation :May 9, 2017

Reference
Number of issued shares subsequent to cancellation (including treasury shares) :152,000,000 shares

2. The Company, at the Board of Director’s meeting held on May 12, 2017, 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:

Common shares of the company

䐠Total number of shares:(1.12% of issued shares prior to cancellation)
䐡Total amount:
䐢Period of repurchase:

Up to 1,700,000 shares
Up to 5,000,000,000 yen
From May 15, 2017 to July 31, 201718