Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Year Ended March 31, 2019
(Based on Japanese GAAP)May 14, 2019
Company name:

Hodogaya Chemical Co., Ltd.

Stock exchange listing: Tokyo
Stock code:
4112

URL

https://www.hodogaya.co.jp/

Representative:

President
Yuto Matsumoto
Director, Senior Managing Executive OfficerInquiries:& General Manager, Corporate Planning
Department

Eiichi Sunada

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to file Securities Report:

June 25, 2019
June 24, 2019

Scheduled date to commence dividend payments:
Preparation of supplementary material on financial results:

June 26, 2019
Yes

Holding of financial results meeting:

NoTEL03-5299-8019(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)(1) Consolidated operating results
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Year ended March 31, 201937,548(3.0)
3,028(22.4)
3,104(25.6)
1,883(34.2)
Year ended March 31, 2018
38,693
11.4
3,903
83.3
4,169
99.1
2,862
46.7
Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%
–
5.6
5.5
8.1
–
8.8
7.7
10.1

Diluted earnings pershare

Earnings per shareYen
238.40362.29Year ended March 31, 2019Year ended March 31, 2018
(2) Consolidated financial position

Total assets
As of March 31, 2019
As of March 31, 2018

Net assets

Equity ratio

Millions of yen
57,14054,737

Millions of yen
36,86035,869Cash flows fromoperating activities
Millions of yen
2,525
4,215

Cash flows frominvesting activities
Millions of yen(2,351)(960)

Net assets per share%
59.5
60.8

Yen
4,299.75
4,210.82(3) Consolidated cash flows

Year ended March 31, 2019Year ended March 31, 2018

Cash flows from
Cash and cash equivalents
at end of periodfinancing activities
Millions of yen
Millions of yen
668
7,442
(3,210)6,583

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2018Year ended March 31, 2019Year ending March 31, 2020
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen%%

––

25.00
25.00

––

25.00
25.00

50.00
50.00

395
395

13.8
20.9

1.2
1.1–25.00–25.00

50.00

128.2

3. Forecast of consolidated financial results for the year ending March 31, 2020 (from April 1, 2019 to March 31, 2020)
Net sales
Full year

Millions of yen
38,000Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen
1.2
2,300 (24.1)
2,300 (25.9)
1,400 (25.7)
177.18

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2019(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

NoNo

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2019

8,413,726 shares As of March 31, 2018

8,413,726 shares

511,715 shares As of March 31, 2018

512,650 shares

Number of treasury shares at the end of the period
As of March 31, 2019
Average number of shares during the period
Year ended March 31, 2019

7,901,651 shares Year ended March 31, 2018

2

7,901,360 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of March 31, 2019

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

6,702
12,335

7,559
12,438Merchandise and finished goods
Work in process

3,584
416

4,246
523

Raw materials and supplies
Other

1,607
418

2,023
570

Allowance for doubtful accounts
Total current assets

(16)

(18)

25,047

27,344Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

18,80919,959(12,876)(14,138)

Buildings and structures, net

5,932

5,820

Machinery, equipment and vehicles

27,75827,630

Accumulated depreciation(25,844)(25,291)

1,913

2,339

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

2,726

2,815(2,519)(2,619)206

195

11,493

11,975

347
(310)

148
(58)

Leased assets, net

3789Construction in progress

426

357

20,01020,778Goodwill
Other

6
169

–
151

Total intangible assets

175

151

Investments and other assets
Investment securities

8,211

7,331

Long-term loans receivable
Deferred tax assets

246
263

266
338

Retirement benefit asset
Other396
583

400
726

Allowance for doubtful accounts

(197)

(197)

Total property, plant and equipment
Intangible assets

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

39,503

8,865

29,68929,79554,737

57,140(Millions of yen)
As of March 31, 2018

As of March 31, 2019

Liabilities
Current liabilities
Notes and accounts payable - trade

5,520

5,564

2,085
1,327

2,065
1,449

Lease obligations
Income taxes payable

18261

21410

Accrued consumption taxes
Provision for bonuses

45481

38490

Other provision
Other1
1,685

0
1,723

Short-term loans payable
Current portion of long-term loans payable

Total current liabilities

11,426

11,763

Non-current liabilities
Long-term loans payable

4,018

5,089

Lease obligations
Deferred tax liabilities

22
1,526

75
1,458

Deferred tax liabilities for land revaluation
Provision for environmental measures

1,228
82

1,228
82

Retirement benefit liability
Asset retirement obligations

83
80

85
80

Other

400

416

Total non-current liabilities

7,441

8,517

18,86820,280Capital stock
Capital surplus

11,196
8,716

11,196
8,716

Retained earnings
Treasury shares

8,444(1,719)9,933(1,716)

Total shareholders' equity

26,63728,129

2,737

2,097

2,783
755

2,783
718

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

356

247

6,632

5,846

Non-controlling interests

2,599

2,883

Total net assets

35,86936,86054,737

57,140Total liabilities and net assets

4Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

Net sales

38,69337,548

Cost of sales

24,787

24,663Gross profit

13,905

12,884

Shipment expenses
Remuneration for directors (and other officers)

1,683
404

1,776
350

Personnel expenses
Provision for bonuses

2,057
208

2,087
201

Retirement benefit expenses
Traveling and transportation expenses

76253

84
222

Rent expenses
Depreciation

435
131

416
95

3,013
8

2,899
6

Other1,729

1,716

Total selling, general and administrative expenses

10,001

9,856

3,903

3,028

Selling, general and administrative expenses

Research and development expenses
Amortization of goodwill

Operating profit
Non-operating income
Interest income

1616

Dividend income
Foreign exchange gains

162
342

189
16Rent income on non-current assets
Subsidy income

57
27

59
58

Miscellaneous income

126

118

Total non-operating income

733

458

Interest expenses
Environmental maintenance expenses

80
310

65
279

Miscellaneous loss

76

37

Non-operating expenses

Total non-operating expenses
Ordinary profit

5467382

4,169

3,104

(Millions of yen)

Extraordinary income
Gain on sales of non-current assets

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
127

Subsidy income

1–

Total extraordinary income

13711440

138–

Extraordinary losses
Loss on retirement of non-current assets
Compensation expenses
Other0–452

138

Profit before income taxes

3,731

2,973

Income taxes - current
Income taxes - deferred494(318)577
75

Total income taxes

176

653

3,555

2,319

Total extraordinary losses

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6692

436

2,862

1,883

Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
3,555

2,319

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

498
(462)

(639)
(108)

Remeasurements of defined benefit plans, net of tax

(80)

(109)

(45)

(857)

Comprehensive income

Total other comprehensive income

3,509

1,462

Comprehensive income attributable toComprehensive income attributable to owners of parent

2,830

1,098679364

Comprehensive income attributable to non-controllinginterests

7Consolidated statements of changes in equity
Fiscal year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

11,196

Retained earnings

9,589

Treasury shares

6,056

Shareholders' equity(1,709)25,132

Changes of items during period
Dividends of surplus

(474)

(474)

Profit attributable to ownersof parent

2,862

2,862

Purchase of treasury shares

(13)

(13)

36Disposal of treasury shares

2

Capital increase ofconsolidated subsidiaries

(1)

(1)

Purchase of shares of
consolidated subsidiaries

(874)

(874)

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period–(873)

2,388

(9)

1,505

11,196

8,716

8,444

(1,719)26,637

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Revaluation
reserve for land

2,238

2,783

Foreigncurrencytranslation
adjustment
1,205Remeasurementsof defined
benefit plans

437

Total
accumulated Non-controlling
Total net assetsinterests
othercomprehensive
income
6,664

2,060

33,857

Changes of items during period
Dividends of surplus(474)

Profit attributable to ownersof parent

2,862

Purchase of treasury shares(13)

Disposal of treasury shares

6

Capital increase of
consolidated subsidiaries(1)

Purchase of shares ofconsolidated subsidiaries(874)

Net changes of items otherthan shareholders' equity

498–(450)

(80)

(32)

538

506

Total changes of items during
period498–(450)

(80)

(32)

538

2,011

Balance at end of current period

2,737

2,783

755

356

6,632

2,599

35,8698

Fiscal year ended March 31, 2019
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

11,196

Retained earnings

8,716

Treasury shares

8,444

Shareholders' equity(1,719)26,637

Changes of items during period
Dividends of surplus

(395)

(395)

Profit attributable to ownersof parent

1,883

1,883

Purchase of treasury shares
Disposal of treasury shares

0(3)

(3)

66Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period

–0

1,488

3

1,492

11,196

8,716

9,933

(1,716)28,129

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

2,737

2,783

755

Remeasurementsof defined benefit
plans

356

Total
accumulated
othercomprehensiv
e income
6,632

Noncontrollinginterests

Total net assets

2,599

35,869Changes of items during period
Dividends of surplus(395)

Profit attributable to ownersof parent

1,883

Purchase of treasury shares(3)

Disposal of treasury shares

6

Net changes of items otherthan shareholders' equity

(639)

–(36)

(109)

(785)

284

(501)

Total changes of items during
period

(639)

–(36)

(109)

(785)

284

990

Balance at end of current period

2,097

2,783

718

247

5,846

2,883

36,8609Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
3,731

2,973

Depreciation
Amortization of goodwill

1,425
81,388
6

Increase (decrease) in provision
Increase (decrease) in retirement benefit liability

12(165)9(123)

Interest and dividend income
Interest expenses(178)
80(206)65

Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment

(340)
(12)

(34)
(7)

Loss on retirement of property, plant and equipment
Loss (gain) on valuation of investment securities

110138–

Subsidy income
Compensation expenses(27)440(58)–Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories

(117)
(990)

(87)
(1,193)

Increase (decrease) in notes and accounts payable - trade
Increase/decrease in other assets/liabilities

946
319

17(177)

Increase (decrease) in accrued consumption taxes
Other, net(78)
25(37)
51

Subtotal

5,090

2,724

Interest and dividend income received
Interest expenses paid

178
(79)

205
(66)

Proceeds from subsidy income
Compensation expenses paid27(440)58–

Income taxes paid
Income taxes refund(609)
49(449)52

Net cash provided by (used in) operating activities

4,215

2,525

10

(Millions of yen)

Cash flows from investing activities
Payments into time deposits

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
(119)

(118)

574

118

(1,017)(2,033)

25

17–

(132)

Purchase of investment securities
Proceeds from sales and redemption of investment securities

(142)
51

(1)
30

Payments of loans receivableCollection of loans receivable(259)
21(56)
26

Purchase of long-term prepaid expenses
Payments for guarantee deposits–(132)(129)(83)

Proceeds from collection of guarantee deposits
Other, net39
(2)

12–

Net cash provided by (used in) investing activities(960)(2,351)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Payments for retirement of property, plant and equipment

(100)

(20)

Proceeds from long-term loans payable
Repayments of long-term loans payable–(1,581)

2,520(1,327)

Cash dividends paid
Dividends paid to non-controlling interests

(471)
(6)

(396)
(79)

Proceeds from sales of treasury shares
Purchase of treasury shares

0(13)

–
(3)

Repayments of lease obligations
Payments from changes in ownership interests in subsidiaries

(29)

(25)

(1,008)–that do not result in change in scope of consolidation
Net cash provided by (used in) financing activities(3,210)668

Effect of exchange rate change on cash and cash equivalents(58)

17Net increase (decrease) in cash and cash equivalents

(14)

859

Cash and cash equivalents at beginning of period

6,597

6,583

Cash and cash equivalents at end of period

6,583

7,442

11