Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018
<Under Japanese GAAP>May 7, 2018
These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

NAGASE & CO., LTD.
Stock exchange listing: Tokyo (First Section)
Code number:8012
URL (https: //www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Akira Takami, Executive Officer, General Manager, Accounting Division TEL: +81-3-3665-3103
Annual general meeting of stockholders (scheduled): June 22, 2018
Start of distribution of dividends (scheduled): June 25, 2018
Securities report filing (scheduled): June 25, 2018
Supplementary documents: Yes
Investors’ meeting: Yes(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Fiscal Year Ended March 31, 2018
(April 1, 2017 to March 31, 2018)(1) Consolidated Operating Results
Net salesFYE March 2018
FYE March 2017

Operating income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

783,933
722,384

8.5(2.7)

24,11815,03060.5(16.6)

25,982
16,361

58.8(11.0)

17,175
10,331

66.2(16.1)(Notes) Comprehensive income

FYE March 2018
FYE March 2017(% = year-on-year change)
Profit attributable toOrdinary income
owners of the parent

FYE March 2018: ¥20,648 million (5.3% decrease)
FYE March 2017: ¥21,798 million (―%)
Earnings per
share
Yen
136.34
81.65(Reference) Equity in earnings of affiliates

Earnings per
share (diluted)YenOrdinary income/total assets
%
%
5.8
4.7
3.7
3.1

Return on equity

Operatingincome/net sales
%
3.1
2.1

FYE March 2018: ¥921 million
FYE March 2017: ¥217 million(2) Consolidated Financial Position
Total assets

Net assets

Net worth ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

FYE March 2018
FYE March 2017571,445
530,775

308,804
295,19853.1
54.7

2,424.97
2,301.10(Reference) Equity capitalFYE March 2018: ¥303,636 million
FYE March 2017: ¥290,217 million

Cash flows fromfinancing activities

Cash and cash
equivalents, end of theyear(3) Consolidated Cash Flows
Cash flows fromoperating activitiesFYE March 2018
FYE March 2017

Cash flows frominvesting activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

21,013
14,527(14,442)(6,518)(3,161)(10,592)

42,85739,7302. Dividends
1Q
Yen

Annual Dividends per Share
Fiscal
2Q
3Q
year end
Yen

Yen

Total dividends

Annual

Yen

Yen

paid
(full fiscal year)

Dividends/

Payout ratio(consolidated)

Millions of yen

net assets(consolidated)

%

%

16.00
17.00
33.00
4,162
40.4
1.5


17.00
23.00
40.00
5,023
29.3
1.7


18.00
19.00
37.00
24.9


(Note) A year-end dividend for FYE March 2018 includes regular dividend of ¥18 per share and special dividend of ¥5 per share.
FYE March 2017
FYE March 2018
FYE March 2019 (estimate)

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2019
(April 1, 2018 to March 31, 2019)(% = year-on-year change)
Net sales
2Q (cumulative)
Full fiscal year
(Note)

Operating income

Millions of yen%828,000


5.6

Millions of yen25,500

Profit attributable toowners of the parent

Ordinary income

Earnings per
share% Millions of yen% Millions of yen

%

Yen


5.7


5.8


8.3


148.55


27,500
18,600As the Company only discloses full-year earnings targets, we have omitted presentation of interim consolidated results here.

* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope of consolidation): Yes
New 1 (Company name: INKRON LIMITED) Excluded: ― (Company name:)(Note) Please refer to “3. Consolidated Financial Statements and Notes (5) Notes related to Consolidated
Financial Statements (Changes in Significant Subsidiaries during the Period).” on page 21 of thisdocument.
(2) Changes of accounting principles, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: No
ii. Changes in items other than (i) above: Noiii. Changes in accounting estimates: No
iv. Restatement of prior period financial statements after error corrections: No(3) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)
March 31, 2018
127,408,285 shares March 31, 2017
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
March 31, 2018
2,195,966 shares

March 31, 2017

1,287,366 shares

Average number of shares during the period
March 31, 2018125,977,181 shares

March 31, 2017

126,541,671 shares* These consolidated financial statements are not subject to audit by an independent audit corporation* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The earnings forecasts presented in this document are based upon currently available information and assumptions
deemed rational. A variety of factors could cause actual results to differ materially from forecasts.
Please refer to “1. Business Performance” on pages 2 through 6 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

Attachments
1. Business Performance2(1) Review of Business Performance2(2) Review of Financial Position

5(3) Dividend Policy and Dividends for the Fiscal Years Ending March 2018 and 20196

2. Basic Policy on the Selection of Accounting Standards

6

3. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheets

7(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

9(3) Consolidated Statement of Changes in Shareholders’ Equity

11(4) Consolidated Statements of Cash Flows

13(5) Notes related to Consolidated Financial Statements

15(Assumption for Going Concern)

15(Segment Information, Etc.)

15(Changes in Significant Subsidiaries during the Period)

21(Per-Share Data)

21(Significant Subsequent Events)

21

-1-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

1. Business Performance(1) Review of Business Performance(Performance for the Fiscal Year Ended March 2018)a. General Summary of Results
The Japanese economy continued to recover throughout the fiscal year, supported by factors including improved corporate
earnings, strong personal consumption driven by favorable employment and payrolls, and stable capital investment. The global
economy continued to experience a gradual recovery, despite risks related to exchange rate fluctuations and market conditions
impacted by national financial and trade policies. The overall global economy was supported by continued growth in the
United States, China, and among the emerging economies.
In this environment, the Company recorded domestic sales of ¥395.42 billion (+7.1% year on year) for the consolidated fiscal
year. Overseas sales, impacted by the comparatively weak yen compared to the prior year, rose to ¥388.5 billion (+10.1%). In
total, the Company recorded a record-high ¥783.93 billion in net sales, an increase of 8.5%.
Gross profit rose in concert with sales gains, amounting to ¥102.67 billion (+12.2%) for the fiscal year. Operating income
amounted to ¥24.11 billion (+60.5%), mainly due to lower retirement benefit expenses associated with amortization of
actuarial losses. The Company recorded ordinary income ¥25.98 billion (+58.8%) and profit attributable to owners of theparent ¥17.17 billion (+66.2%). All profit indicators marked record highs for the consolidated fiscal year in the history of theCompany.

b. Segment Summary
Functional Materials
The Functional Materials segment recorded higher sales in both domestic and overseas markets.
The Performance Chemicals business recorded higher sales due to improved sales of coating raw materials and urethanematerials, spurred by strong automotive production in Japan and overseas. Another contributing factor was a jump in sales
associated with the Company’s acquisition of a distributor in the United States.
The Speciality Chemicals business recorded higher sales overall. Sales of fluorochemicals, electronics chemicals, and raw
materials for industrial oil solutions were higher for the semiconductor and other electronics industry in Japan. Overseas, sales
were higher for electronics chemicals and other products.
As a result, the segment recorded sales of ¥176.06 billion for the year, representing a ¥22.52 billion (+14.7%) increase
compared to the prior consolidated fiscal year. Segment operating income grew ¥980 million (+23.6%), reaching ¥5.17 billion
for the year.

Advanced Materials & Processing
The Advanced Materials & Processing segment recorded higher sales in both domestic and overseas markets.
The Colors & Advanced Processing business recorded higher sales as a whole, driven by growth in plastic resins for industrial
and packaging applications, dyes/additives, and digital print processing materials in Japan. Overseas, strong sales of printrelated business products contributed to higher overall performance.
The Polymer Global Account business mainly sells plastics to the office equipment, appliance, and video game device markets.
The sales of those business were higher overall, driven by growth in Japan, Greater China, and ASEAN.
As a result, the segment recorded sales of ¥262.83 billion for the year, representing a ¥20.22 billion (+8.3%) increase
compared to the prior consolidated fiscal year. Segment operating income grew ¥1.6 billion (+31.5%), reaching ¥6.7 billion.

-2-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

Electronics
The Electronics segment recorded an increase in sales for the year, driven by strong performance at our manufacturingsubsidiaries in Japan and overseas.
The Electronic Chemicals business recorded higher sales due to growth in photolithography material and equipment-related
sales, as well as strong performance of formulated epoxy resins for the electric and electronics industries.
The Electronic Materials business recorded lower sales compared to the prior fiscal year. This decrease was due to declines inprocessed materials sales associated with smartphone model changeovers.
As a result, the segment recorded sales of ¥129.32 billion for the year, representing a ¥1.6 billion (+1.3%) increase comparedto the prior consolidated fiscal year. Segment operating income grew ¥2.58 billion (+40.8%), reaching ¥8.91 billion for theyear.

Automotive & Energy
The Automotive Solutions business recorded higher sales, driven by factors including strong performance in our resins
businesses in Japan, Greater China, and ASEAN.
As a result, the segment recorded sales of ¥129.7 billion for the year, representing a ¥16.75 billion (+14.8%) increase
compared to the prior consolidated fiscal year. Segment operating income grew ¥870 million (+56.9%), reaching ¥2.41 billion
for the year.

Life & Healthcare
The Life & Healthcare segment recorded net sales slightly higher compared to the prior fiscal year. While sales were lower
domestically, the Company recorded higher sales overseas.
Sales of TREHA™ and other products to food ingredient makers in our Life & Healthcare Products business were level, whilesales in Europe and other regions overseas grew. Although the business recorded lower sales of AA2G™ to major customers inthe skin care and toiletries field overseas, sales to major customers in Japan were higher. In the medical and pharmaceuticalfield, sales of pharmaceutical raw materials and intermediates, medical materials, and pharmaceutical business products allunderperformed prior year. As a result, the business recorded sales slightly higher compared to the prior year.
The Beauty Care Products business, which includes sales of cosmetics and health foods, recorded lower sales, driven down due
to weak performance across all product categories.
As a result, the segment recorded sales of ¥85.37 billion for the year, representing an increase of ¥460 million (+0.6%).
Segment operating income grew ¥880 million (+26.5%), reaching ¥4.21 billion for the year.

Other
No special matters to disclose.

-3-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(Forecast for the Fiscal Year Ending March 2019)a. Performance Forecast for the Fiscal Year Ending March 2019
In Japan, personal spending is expected to remain strong throughout the next fiscal year, buoyed by an improving picture indomestic employment and payrolls. And also, the general global business environment is expected to continue to perform well,
supported by strength in the United States, China, and the emerging economies of the world, while uncertainties remain inconnection with exchange rate fluctuations resulting from national financial policies and economic friction resulting fromprotectionism, as well as geopolitical risks related to North Korea and the Middle East.
For the year ending March 2019, we forecast consolidated net sales of ¥828 billion (+5.6% year on year), operating income of¥25.5 billion (+5.7%), ordinary income of ¥27.5 billion (+5.8%), and profit attributable to owners of the parent in the amountof ¥18.6 billion (+8.3%).
These forecasts have been developed based on a currency conversion rate of ¥105 to the US dollar.
(Millions of yen)
Net sales

Operating Income

Ordinary income

Profit attributable toowners of the parent

FYE March 2019

828,000

25,50027,50018,600FYE March 2018783,933

24,11825,982

17,175

Change

+5.6%

+5.7%

+5.8%

+8.3%

b. Net Sales Forecast by Business Segment(Millions of yen)FYE March2018 Actual

FYE March2019 Forecast

ChangeFunctional Materials
Advanced Materials & Processing
Electronics
Automotive & EnergyLife & Healthcare
Other

176,068
262,831
129,324
129,708
85,371
629

183,700
289,000
123,500
142,500
88,600700+4.3%+10.0%(4.5%)+9.9%+3.8%+11.2%

Total Sales

783,933

828,000+5.6%(Note) Next-period forecasts are based on information available at the time. Actual earnings may differ from forecasts due to avariety of factors, including, but not limited to, overseas and domestic business conditions, foreign exchange rate
fluctuations, etc.

-4-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(2) Review of Financial Positiona. Summary of Consolidated Balance Sheets
As of the end of the consolidated fiscal year, current assets amounted to ¥356.1 billion. This represents an increase of ¥34.89
billion compared to the end of the prior consolidated fiscal year, an increase due mainly to increases in accounts receivable andinventories. Non-current assets amounted to ¥215.33 billion, up ¥5.77 billion. This increase was mainly due to increases in fairvalues of shares retained and goodwill recorded by the Company during the period. As a result of these various factors, total
assets increased ¥40.67 billion to ¥571.44 billion as of the end of the consolidated fiscal year.
Liabilities amounted to ¥262.64 billion, a ¥27.06 billion increase compared to the end of the prior consolidated fiscal year. This
increase was mainly due to increases in accounts payable and short-term loans, which exceeded redemptions of bonds.
Net assets amounted to ¥308.8 billion, up ¥13.6 billion. This increase was mainly due to ¥17.17 billion in profit attributable toowners of the parent and an increase in net unrealized holding gain in securities.
As a result, the Company recorded a shareholders’ equity ratio of 53.1%, down 1.6 points compared to the end of the priorconsolidated fiscal year.

b. Summary of Consolidated Cash Flows
Cash and cash equivalents (Cash) increased ¥3.12 billion (+7.9%) compared to the end of the prior consolidated fiscal year,
amounting to ¥42.85 billion. Cash from operating activities amounted to ¥21.01 billion, while cash used in investing activities
came to ¥14.44 billion, and cash used in financing activities amounted to ¥3.16 billion. In addition, effects of exchange ratechanges had a ¥170 million negative impact on Cash balances.

(Cash Flows from Operating Activities)
Cash flows from operating activities for the consolidated fiscal year amounted to ¥21.01 billion. While the Company
experienced a ¥11.96 billion decrease in Cash due to increased working capital and payments of ¥4.86 billion in income taxes,
we also recorded income before profit before income taxes of ¥24.04 billion and cash reserved related to depreciation andamortization in the amount of ¥9.29 billion.

(Cash Flows from Investing Activities)
Cash used in investing activities during the consolidated fiscal year amounted to ¥14.44 billion. This result was mainly due tocash outlays of ¥7.21 billion for the purchase of property, plant and equipment and intangible fixed assets, as well as outlays of¥5.99 billion for the acquisition of the stock of a subsidiary in connection with a change in the scope of consolidation.

-5-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(Cash Flows from Financing Activities)
Cash used in financing activities for the consolidated fiscal year amounted to ¥3.16 billion. This result was mainly due to cash
outlays of ¥10.0 billion and ¥4.28 billion for redemption of bonds and dividend payments, respectively. These outlays were inexcess of a net ¥5.0 billion increase in commercial paper and ¥8.3 billion in proceeds from long-term loans.
FYE March
2014

FYE March
2015

FYE March
2016

FYE March
2017

FYE March
2018

Shareholders' equity ratio

49.5%

51.5%

53.5%

54.7%

53.1%

Shareholders' equity ratio based onmarket value

32.5%

36.6%

30.7%

36.9%

39.6%

Interest-bearing debt to cash flow ratio

7.3

6.4

3.0

5.6

4.1

Interest coverage ratio

11.3

13.7

29.0

13.9

16.3

Shareholders’ equity ratio: Equity capital/total assets
Shareholders' equity ratio based on market value: Market capitalization/total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/operating cash flow
Interest coverage ratio: Operating cash flow/interest payments(Note 1) Indicators are calculated based on consolidated figures.
(Note 2) Market capitalization is calculated using the closing price at the end of the year multiplied by the number ofoutstanding shares at the end of the year (less treasury stock at cost)(Note 3) Operating cash flow is net cash flow provided by operating activities as shown in the consolidated statements ofcash flows. Interest-bearing debt is all liabilities in the consolidated balance sheets for which interest is payable.
Interest payments are the amount of interest paid as presented in the consolidated statements of cash flows.

(3) Dividend Policy and Dividends for the Fiscal Years Ending March 2018 and 2019
Our basic policy is to continue paying a stable dividend to our shareholders in line with our consolidated results as we improve
our earnings power and management structure. We look to improve per-share dividends based on considerations ofconsolidated payout ratio and consolidated dividend to equity ratio. We also plan to use funds from internal reserves effectively
in our business growth and to build a stronger management function.
The NAGASE Group declared a year-end dividend of ¥23 per share based on this policy, a ¥1 increase compared to the priorfiscal year with an additional ¥5 per share special dividend reflecting the group’s consolidated performance and financial
position for the fiscal year. As a result, the scheduled full-year cash dividend will amount to ¥40 per share, including thespecial ¥5 yen per share special dividend.
We forecast a full-year regular dividend of ¥37 per share for the next fiscal year, ¥2 higher than the prior year. This dividend
will consist of an ¥18 per-share interim dividend and a ¥19 per share year-end dividend.

2．Basic Policy on the Selection of Accounting Standards
The NAGASE Group intends to adopt Japanese accounting standards for the time being to allow for inter-company
comparability.
We have been studying the adoption of International Financial Reporting Standards (IFRS) for some time, and plan to make theappropriate policy choice in the future, considering external trends and other factors.

-6-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheets(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2017)

Current Consolidated Fiscal Year
(March 31, 2018)39,830206,846
58,162
1,309
3,648
2,375
9,681
(638)
321,215

43,303225,999
67,681
1,883
4,106
2,783
10,953(602)
356,109

54,911(30,879)
24,032
62,929(47,552)
15,376
21,93922,850(16,578)
6,271
67,61958,016(32,562)
25,45462,031(46,275)
15,755
21,154
21,720(16,859)
4,861
67,22523,034
13,791
3,916
40,74225,478
12,215
3,396
41,09094,548
482
1
1,524
4,930
(289)
101,197
209,559
530,775

100,403
109
1,614
4,992
(101)
107,019
215,335
571,445ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Less allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)
Land
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Technology-based assets
Other
Total intangible fixed assets
Investments and other assets
Investments in securities
Long-term loans receivable
Net defined benefit assets
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-7-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2017)

Current Consolidated Fiscal Year
(March 31, 2018)

102,076
28,162
3,522
10,000
1,849
37
4,512
171
16,161
166,494

118,028
31,934
11,067
5,000
1,738
44
5,451
274
19,500193,040

20,00020,07813,503
14,625874
69,082
235,576

20,00017,906
16,365
14,518809
69,600262,640

9,699
11,590219,721(1,337)
239,674

9,699
11,158232,534(3,114)250,278

47,683
4
3,129
(274)
50,542
4,981
295,198
530,775

50,773
(15)
2,917
(317)
53,3585,168
308,804
571,445

LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial papers
Current portion of bonds
Accrued income taxes
Deferred tax liabilities
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Deferred tax liabilities
Net defined benefit liability
Other
Total long-term liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Net unrealized holding gain on securities
Deferred gain (loss) on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-8-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2016 March 31, 2017)

Current Consolidated Fiscal Year
(April 1, 2017 March 31, 2018)

722,384
630,881
91,503783,933
681,258
102,675

10,84322,124
2,739
166

11,88023,050
3,515
254

4,259

4,323

4,487
32
(4)
1,543
30,28076,472
15,030

1,853
24
(59)
1,748
31,96678,557
24,118

195
1,616
296
217
589
2,915

185
1,605
268
921
169
385
3,536

1,032
79
473
1,584
16,361

1,294
378
1,672
25,982

239
2,006
314
79
2,639

50
8
84
288
229
661

60
227
290
1,398
25
106
290
500
2,901
16,100
5,020
417
5,437
10,662330
10,331

419
168
212
847
12
0
462
294
175
2,594
24,049
5,358
1,098
6,457
17,592417
17,175Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
Employee salaries and allowances
Provision for accrued bonuses for employees
Provision for accrued bonuses for directors
Depreciation and amortization other than amortizationof goodwill
Retirement benefit expenses
Provision for retirement benefits for directors
Allowance for doubtful accounts
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of affiliates
Foreign exchange gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on sales of shares of subsidiaries and affiliates
Subsidy income
Gain on negative goodwill
Other
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on disposal of non-current assets
Loss on reduction of non-current assets
Impairment losses
Loss on sale of investments securities
Loss on valuation of investments securities
Loss on sales of shares of subsidiaries and affiliates
Loss on business withdrawal
Loss on step acquisitions
Other
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of the parent-9-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(Quarterly Consolidated Statements of Comprehensive Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2016 March 31, 2017)

Current Consolidated Fiscal Year
(April 1, 2017 March 31, 2018)

10,662

17,592

10,60214(1,223)
1,895

3,083
(19)
(14)
(43)

(152)

50

11,135
21,7983,055
20,64821,622
175

20,101547

Net income
Other comprehensive income
Net unrealized holding gain on securities
Deferred gain (loss) on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owner of parent
Non-controlling interests- 10 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(3) Consolidated Statement of Changes in Shareholders’ Equity
Prior Consolidated Fiscal Year (April 1, 2016 to March 31, 2017)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Less treasury stock,at costRetained earnings

11,615

Total shareholders’equityሺ230)

213,572

234,657

ChangesCash dividends

ሺ4,050)

ሺ4,050)

Profit attributable to ownersof the parent

10,331

10,331

Purchases of treasury stock
Disposal of treasury stock0

Equity transactions with
non-controlling interests(25)

Change From Merger with
Non-Consolidated
Subsidiaries
Change of scope of equity
methodChanges other thanshareholders’ equity accounts(net)
Total changes
Balance, end of period

9,699

ሺ1,107)(1,107)

0

0
(25)

0

0

ሺ132)

ሺ132)

ሺ25)

6,149

ሺ1,107)

5,016

11,590219,721

ሺ1,337)

239,674

Accumulated other comprehensive income (loss)

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred (loss)
gain on hedges

Translation
adjustments

Remeasurementsof defined
benefit plans

37,074

ሺ9)

4,411

ሺ2,169)Total
Non-controlling
accumulated
interests
othercomprehensive
income39,305

5,185

Total net assets

279,149

ChangesCash dividends

ሺ4,050)

Profit attributable to ownersof the parent

10,331

Purchases of treasury stockሺ1,107)

Disposal of treasury stock0

Equity transactions with
non-controlling interests(25)

Change From Merger with
Non-Consolidated
Subsidiaries
Change of scope of equity
methodChanges other thanshareholders’ equity
accounts (net)0ሺ132)
10,60914

ሺ1,281)

1,895

11,236

ሺ204)

11,032

Total changes

10,60914

ሺ1,281)

1,895

11,236

ሺ204)

16,049Balance, end of period

47,683

4

3,129

ሺ274)

50,542

4,981

295,198- 11 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

Current Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Less treasury stock,at costRetained earnings

11,590Total shareholders’equityሺ1,337)219,721239,674

ChangesCash dividends

ሺ4,287)

ሺ4,287)

Profit attributable to ownersof the parent

17,175

17,175Purchases of treasury stock
Disposal of treasury stock0

Equity transactions with
non-controlling interests

ሺ431)

ሺ1,776)

ሺ1,776)

0

0
ሺ431)

Changes in scope of
consolidation
Change From Merger with
Non-Consolidated
Subsidiaries

ሺ67)

ሺ67)

ሺ6)

ሺ6)

Change of scope of equity
methodሺ1)

ሺ1)Changes other thanshareholders’ equity
accounts (net)Total changes
Balance, end of period

9,699

ሺ431)

12,812(1,776)

10,603

11,158232,534

ሺ3,114)250,278

Accumulated other comprehensive income (loss)

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred (loss)
gain on hedges

Translation
adjustments

Remeasurementsof defined
benefit plans

47,683

4

3,129

ሺ274)

Total
Non-controlling
accumulated
interests
othercomprehensive
income50,542

4,981

Total net assets

295,198

ChangesCash dividends

ሺ4,287)

Profit attributable to ownersof the parent

17,175Purchases of treasury stockሺ1,776)

Disposal of treasury stock0

Equity transactions with
non-controlling interests

ሺ431)

Changes in scope of
consolidation
Change From Merger with
Non-Consolidated
Subsidiaries

ሺ67)

Change of scope of equity
methodሺ1)

ሺ6)Changes other thanshareholders’ equity
accounts (net)

3,090

ሺ19)

ሺ212)

ሺ42)

2,815

187

3,002

Total changes

3,090

ሺ19)

ሺ212)

ሺ42)

2,815

187

13,60650,773

ሺ15)

2,917

ሺ317)

53,3585,168

308,804

Balance, end of period- 12 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

(4) Consolidated Statements of Cash Flows

Operating activities
Profit before income taxes
Depreciation and amortization other than amortization of
goodwill
Loss on impairment of fixed assets
Amortization of goodwill
Gain on negative goodwill
Loss on step acquisitions
Subsidy income
Loss on reduction of non-current assets
Loss on business withdrawal
Increase (decrease) in liability for retirement benefits
Interest and dividend income
Interest expenses
Exchange gain, net
Loss on sales of investment securities, investments in capital,
shares of subsidiaries and affiliates, and investments in capital ofsubsidiaries and affiliates, net
Increase in notes and accounts receivable
Increase in inventories
Decrease in notes and accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible fixed assets included in other assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Purchases of investments
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Proceeds from sales of shares of subsidiaries resulting in change
in scope of consolidation
Increase on short-term loans receivable included in other current
assets, net
Decrease in time deposits, net
Proceeds from subsidy income
Other, net
Net cash used in investing activities- 13 -

Prior Consolidated Fiscal
Year(April 1, 2016 March 31, 2017)(Millions of yen)
Current Consolidated Fiscal
Year(April 1, 2017 March 31, 2018)16,10024,049

9,381

9,295

1,398
1,543
(314)
290
3,297
(1,812)
1,032
345

847
1,748
(229)
294
(288)
212
462
(210)
(1,791)
1,294
(309)

(1,690)(92)(11,885)(1,017)
5,198(792)
21,0752,235(1,045)(7,737)
14,527(17,382)(9,610)15,024
1,623
24,9372,235(1,292)(4,865)21,013(10,667)976(867)(1,825)
4,658(53)(6,679)1,360(539)(1,603)
105
(54)

-

(5,994)

293

207

434

108

274
314
(54)
(6,518)(242)
288(1,400)(14,442)NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

Financing activities
Decrease in short-term loans, net
Net increase in commercial papers
Proceeds from long-term loans
Repayments of long-term loans
Redemption of bonds
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Other, net
Net cash used in financing activities
Effects of exchange rate changes on cash and cash equivalents
Net (increase) decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Increase in cash and cash equivalents resulting from merger withunconsolidated subsidiaries
Cash and cash equivalents, at end of the period- 14 -

3,232
950(9,182)(1,107)(4,050)
(254)

3,632
5,000
8,301
(3,117)(10,000)(1,776)(4,287)
(275)

(151)

(606)

(29)
(10,592)(596)(3,180)42,900

(30)
3,161
(175)
3,234
39,730

-

(111)

10

4

39,73042,857

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018(5) Notes related to Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Segment Information, etc.)
a. Segment Information
1. Reportable Segments
The Company’s reportable segments are those units comprising the NAGASE Group for which separate financial information
is available and for which the board of directors make regular decisions regarding resource allocation and operating
performance.
The Company classifies reportable segments according to the location of the business in the value chain and the market(s)targeted. Accordingly, the Company has defined five segment categories: Functional Materials (located at the top of the value
chain), Advanced Materials & Processing (located in the next stage of the value chain), Electronics, Automotive & Energy, andLife & Healthcare (these last three segments functioning across all industries).
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials, auxiliaries, plastic
materials, plastic additives, industrial oil solutions, surfactants, fluorochemicals, encapsulant materials, silicone materials, andmore for the paints/inks, resins, urethane foam, organic synthesis, surfactants, and semiconductor industries.
The Advanced Materials & Processing segment is engaged in sales of dyestuffs, dyes, functional dyes, digital print processing
materials, thermoplastic resins, thermosetting resins, automobile refinish paints, conductive coatings, synthetic rubber,
inorganic materials, plastics products, and resins molding tools/dies for the dye/additive, digital print processing material, fiber
processing, raw resin material, resin molding, functional film and sheet, construction, and other industries.
The Electronics segment is engaged in the sales of pre-processing materials and devices for LCD/semiconductors, materials
for display panels, materials and devices for semiconductor assembly, low-temperature/vacuum equipment, high-function
epoxy resins, precision electronics abrasives, and more for the display, touch panel, semiconductor, hard disk drive, electronic
components, and heavy electrical industries.
The Automotive & Energy segment is engaged in the sales of plastic products, thermoplastic resins, thermosetting resins,
silicone products, resin molding tools/dies, high-function car electronics materials and components, battery materials, solar
cell/secondary battery materials and more for the automotive, automotive component, and energy industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials, research
products, in vitro diagnostics, enzymes, food additives, additives for cosmetics, feeds, and surfactants for the pharmaceutical,
food, and cosmetics industries. The segment offers radiation measurement as one of its main services. In addition, this segment
sells cosmetics, health foods, and beauty foods directly to consumers.

2. Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Accounting treatment in each reportable segment follows the principles and procedures of the accounting treatments used toprepare the Company’s consolidated financial statements.
Profit in reportable segments is defined as operating income. Inter-segment profits and transfers are based on actual market
prices.

- 15 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

3. Information related to Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Prior Consolidated Fiscal Year (April 1, 2016 to March 31, 2017)(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

To
consolidated
Corporate Adjustments
financial(Note) 2(Note) 3
statements(Note) 4

Net sales
Sales tocustomers

153,546

242,609

127,722112,956

84,904

721,739644

722,384--

722,384

Intersegment
sales/transfers

2,000

2,414

1,977

2,619

472

9,483

5,432

14,916-(14,916)-

Total

155,546

245,024

129,699

115,576

85,376731,223

6,077

737,300-(14,916)

722,384

Segment income(loss)

4,185

5,093

6,333

1,539

3,332

20,484

148

20,633(6,153)550

15,030

Segment assets

72,576

121,346

65,61046,25898,221

404,013

5,089

409,102

149,020(27,347)

530,775

Depreciation
and amortization

476

809

2,524

219

3,412

7,442

216

7,658

1,722

-

9,381

Amortization of
goodwill

-

-

41

-

1,502

1,543

-

1,543

-

-

1,543

Unamortizedbalance of
goodwill

-

-

627

-

22,407

23,034-23,034--23,034

1,716

1,394

2,318

1,235

2,476

9,140

-

9,140

-

(1)

9,139

297

3,561

1,825

284

4,906

10,875190

11,066

1,107-

12,173

Other

Investments inequity affiliates
Increase inproperty, plant,
and equipment
and intangible
fixed assets(Note) 1. Other is a business segment consisting of businesses not included in reportable segments, and includes logistics services,
information processing services, and professional services.
2. Corporate segment income (loss) represents expenses not allocated to reportable segments or Other. Segment assets under
Corporate are assets not allocable to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment income (loss), Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

- 16 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

Current Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

Corporate Adjustments(Note) 2(Note) 3

To
consolidated
financialstatements(Note) 4

Net sales
Sales tocustomers

176,068

262,831

129,324

129,708

85,371

783,303

629

783,933－－

783,933

Intersegment
sales/transfers

2,543

2,234

2,108

2,817

508

10,213

4,783

14,997－(14,997)－

Total

178,612265,065

131,433

132,526

85,880793,517

5,413

798,931－(14,997)

783,933

Segment income(loss)

5,170

6,700

8,917

2,415

4,216

27,420207

27,628(3,954)445

24,118Segment assets

87,905

134,977

70,14951,10997,667

441,8095,304

447,113

153,594(29,262)

571,445

Depreciation
and amortization

456

645

2,454

249

3,552

7,359

218

7,577

1,717

－

9,295

Amortization of
goodwill

133

－

112

－

1,502

1,748

－

1,748

－

－

1,748

Unamortizedbalance of
goodwill

3,276

－

1,296

－

20,90525,478－25,478－－25,478Investments inequity affiliates

2,478

1,482

2,751

1,231

2,601

10,545－

10,545－(2)

10,542

243

2,817

1,834

191

2,369

7,458

68

7,527

1,896

－

9,423

Other

Increase inproperty, plant,
and equipment
and intangible
fixed assets(Note) 1. Other is a business segment consisting of businesses not included in reportable segments, and includes logistics services,
information processing services, and professional services.
2. Corporate segment income (loss) represents expenses not allocated to reportable segments or Other. Segment assets under
Corporate are assets not allocable to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment income (loss), Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

- 17 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018b. Other Information
Prior Consolidated Fiscal Year (April 1, 2016 to March 31, 2017)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

2. Geographic Information(1) Net sales(Millions of yen)
Japan

Greater China

369,365

ASEAN

193,784

Americas101,998

29,573

Europe11,975

Other

Total

15,687722,384(Note) 1. Net sales are categorized by country or region, according to the location of the customer.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China......China, Hong Kong, Taiwan(2) ASEAN...............Thailand, Singapore(3) Americas.............U.S., Mexico(4) Europe................Germany(5) Other...................Korea(2) Property, plant and equipment(Millions of yen)
Japan

Other
61,666

Total
5,952

3. Major Customers
Information not presented here, since no single customer accounts for 10% or more of consolidated net sales.

- 18 -

67,619

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

Current Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

2. Geographic Information(1) Net sales(Millions of yen)
Japan

Greater China

395,428

ASEAN

207,437

Americas110,380

36,564

Europe14,178

Other

Total

19,943783,933(Note) 1. Net sales are categorized by country or region, according to the location of the customer.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China......China, Hong Kong, Taiwan(2) ASEAN...............Thailand, Singapore(3) Americas.............U.S., Mexico(4) Europe................Germany(5) Other...................Korea(2) Property, plant and equipment(Millions of yen)
Japan

Other
61,686

Total
5,539

3. Major Customers
Information not presented here, since no single customer accounts for 10% or more of consolidated net sales.

- 19 -

67,225

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018

c. Impairment Losses of Non-Current Assets for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2016 to March 31, 2017)(Millions of yen)
Reportable Segments
Advanced
Automotive
Life &
Functional
Materials & Electronics& Energy Healthcare
Materials
Processing
Impairment
loss

-

1,352

1

38

-

Corporate/
Elimination

Other
Total

1,392

-

6

Total

1,398

(Note) The Advanced Materials & Processing segment recorded impairment loss of ¥1,249 million in the color former manufacturingbusiness assets due to decreasing profitability. The Company wrote down the book value of these assets to their recoverable
amounts.

Current Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing
Impairment
loss

-

528

221

4

- 20 --

Corporate/
Elimination

Other
Total

754

-

92

Total

847

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018d. Amortization and Unamortized Balance of Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2016 to March 31, 2017)
Omitted, as the same information has been disclosed under Segment Information.

Current Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
Omitted, as the same information has been disclosed under Segment Information.

e. Information about Gain on Negative Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2016 to March 31, 2017)
No matters to report.

Current Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
No material matters to report.

(Changes in Significant Subsidiaries during the Period)
During the consolidated fiscal year, the Company acquired shares of INKRON LIMITED (specified subsidiary).
Accordingly, the Company has included INKRON LIMITED and two INKRON LIMITED subsidiaries (Inkron Oy andInkron Technologies GmbH) in the scope of consolidation.

(Per-Share Data)
Prior Consolidated Fiscal Year Current Consolidated Fiscal Year
(April 1, 2016 - March 31,
2017)(April 1, 2017 - March 31,
2018)

Net assets per share¥2,301.10¥2,424.97

Earnings per share¥81.65¥136.34(Note) 1. Information for diluted earnings per share not presented, as the Company does not issue any stock with dilutive effects.
2. Basic earnings per share calculations are as shown below.
Prior Consolidated Fiscal Year Current Consolidated Fiscal Year
(April 1, 2016 - March 31,(April 1, 2017 - March 31,
2017)
2018)
Profit attributable to owners of the parent(millions of yen)

10,331

17,175

Profit attributable to common stock owners of the parent(millions of yen)

10,331

17,175

126,541,671

125,977,181

Average number of outstanding shares of common stock (shares)(Significant Subsequent Events)
No matters to report.

- 21 -