Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016
<Under Japanese GAAP>May 6, 2016
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 (http: //www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Akira Takami, General Manager, Accounting Division
TEL: +81-3-3665-3103
Annual general meeting of stockholders (scheduled): June 29, 2016
Start of distribution of dividends (scheduled): June 30, 2016
Securities report filing (scheduled): June 29, 2016
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, 2016
(April 1, 2015 to March 31, 2016)(1) Consolidated Operating Results
Net sales
Millions of yen

FYE March 2016
FYE March 2015
(Notes) Comprehensive income

FYE March 2016
FYE March 2015(% = year-on-year change)
Profit attributable toOrdinary income
owners of the parent

Operating income%

Millions of yen%

742,194(2.3)
18,024(0.7)
18,390(9.7)
759,713
5.0
18,15315.0
20,36613.7
FYE March 2016: (¥3,845) million (―%)
FYE March 2015: ¥40,453 million (68.3% increase)%

Millions of yen%

Millions of yen

12,316
11,3188.8(3.0)

Earnings per
share
Yen
96.96
89.10

(Reference) Equity in earnings of affiliates

Earnings per
Ordinary income/Return on equity
share (diluted)
total assets
Yen
%
%
4.4
3.5
−
4.3
3.9
−
FYE March 2016: (¥48) million
FYE March 2015: ¥616 million

Operatingincome/net sales
%
2.4
2.4

(2) Consolidated Financial Position
Total assets

Net assets

Net worth ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

FYE March 2016
FYE March 2015

512,081546,525

279,149
287,500

53.5
51.5

2,156.67
2,215.18(Reference) Equity capitalFYE March 2016: ¥273,963 million
FYE March 2015: ¥281,398 million

Cash flows fromfinancing activities

Cash and cash
equivalents, end of theyear(3) Consolidated Cash Flows
Cash flows fromoperating activitiesFYE March 2016
FYE March 2015

Cash flows frominvesting activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

29,376
15,474(12,600)(7,732)(12,822)(3,205)42,90040,522

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

1Q

AnnualTotal dividends
Dividends/
Payout ratio
paid
net assets(consolidated)(full fiscal year)(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

−
−
−

15.00
16.00
16.00

−
−
−

15.00
16.00
16.00

30.00
32.00
32.00

3,810
4,064

33.7
33.0
42.8

1.4
1.5

FYE March 2015
FYE March 2016
FYE March 2017 (estimate)

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2017
(April 1, 2016 to March 31, 2017)(% = year-on-year change)
Net sales

2Q (cumulative)
Full fiscal year
(Note)

Operating profit

Millions of yen%−
735,000−(1.0)

Millions of yen−
14,500

Profit attributable toowners of the parent

Ordinary income% Millions of yen−(19.6)−
16,000% Millions of yen−(13.0)−
9,500

Earnings per
share

%

Yen

−
(22.9)−
74.78

As 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): No
New: ― (Company name:)
Excluded: ― (Company name:)(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, 2016
127,408,285 shares March 31, 2015
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
March 31, 2016
377,300 shares

March 31, 2015

376,363 shares

Average number of shares during the period
March 31, 2016
127,031,413 shares

March 31, 2015

127,032,358 shares* Disclosure of Audit Procedure ProgressThis earnings report is exempt from audit procedures as provided by the Financial Instruments and Exchange Act.
Consolidated financial statements were undergoing the audit process at the time of the release of this report.
* 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 8 of this document for further information.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

Attachments
1. Business Performance

2(1) Analysis of Business Performance2(2) Analysis of Financial Position

5(3) Dividend Policy and Dividends for the Fiscal Years Ended and Ending March 2016 and 2017

6(4) Operating and Other Risks

6

2. Management Policies

9(1) Basic Management Policy

9(2) Management Objectives, Medium-Term Strategies and Issues to be Addressed by the Company

9

3. Basic Policy on the Selection of Accounting Standards

10

4. Consolidated Financial Statements

11(1) Consolidated Balance Sheets

11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income13(3) Consolidated Statement of Change in Shareholders' Equity

15(4) Consolidated Statements of Cash Flows

17(5) Notes related to Consolidated Financial Statements

18(Assumption for Going Concern)

18(Change in Presentation Methods)

18(Additional Information)

18(Segment Information, etc.)

19(Per-Share Data)

24(Significant Subsequent Events)

24

- 1 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

1. Business Performance(1) Analysis of Business Performance(Performance for the Fiscal Year Ended March 2016)a. General Summary of Results
Stagnation in Japanese consumer spending, as well as the decline in resource prices and the pressure of the strong yen on
corporate earnings have created a gradually increasing sense of uncertainty about the future direction of the Japanese economy.
Despite an ongoing recovery in corporate activity and consumer spending in North America, ongoing growth deceleration in
China and other emerging countries have likewise clouded the direction of the future of the global economy.
In this environment, the Company recorded domestic sales of ¥363.03 billion for the consolidated fiscal year, which
represented a 3.0% decrease year on year. Overseas sales amounted to ¥379.15 billion (1.6% decrease). In total, the Company
recorded ¥742.19 billion (2.3% decrease) in net sales.
The Company recorded gross profit of ¥91.66 billion (0.4% decrease) in conjunction with lower revenues. Operating income
amounted to ¥18.02 billion (0.7% decrease). Ordinary income amounted to ¥18.39 billion (9.7% decrease), a year-on-year
decline mainly due to a loss in equity affiliates and a downturn in foreign exchange gains. Meanwhile, profit attributable toowners of the parent amounted to ¥12.31 billion, an 8.8% increase. While the Company recorded impairment losses related togoodwill and business assets, the application of the Consolidated Tax Payment System beginning with the fiscal year ending
March 2017 resulted in lower tax expenses.

b. Segment Summary
Functional Materials
The Functional Materials segment reported lower net sales compared to the same period in the prior fiscal year. Growthoverseas, particularly in the Americas and China, could not outpace the decline in domestic sales.
The performance chemicals business recorded lower net sales. While overseas sales grew in China and the Americas, domestic
weakness in automotive production volume and slow demand for house paints resulted in lower sales of coating raw materials
and urethane materials.
The speciality chemicals business reported lower overall net sales. While sales of plastic additives were strong, sales ofchemicals for semiconductor-related products to the electronics industry and processing oils were sluggish.
As a result, the segment recorded net sales of ¥157.14 billion, representing a ¥11.08 billion (6.6%) decrease year on year.
Operating income for the segment was ¥3.67 billion, representing a ¥620 million (14.5%) decrease. This decrease was mainly
due to transfers and facilities expansions at subsidiary companies.

Advanced Materials & Processing
The Advanced Materials & Processing segment reported a slight overall increase in net sales. While sales were lower
domestically, the segment saw higher sales in Northeast Asia and Southeast Asia.
The colors and imaging business recorded lower net sales. Despite higher sales of plastic materials, sales decreased for dyes
and additives, information printing materials, anti-reflective optical sheets, materials for LCD TV reflectors, and conductive
materials.
The segment's business selling plastics and other products to the office equipment, appliance and video game device markets
reported slightly higher net sales. This result stems mainly from higher performance in Northeast Asia and Southeast Asia incontrast to lower sales in Japan.
As a result, net sales for the segment amounted to ¥255.5 billion, a ¥1.33 billion (0.5%) increase. Operating income increased¥170 million (3.7%), reaching ¥4.97 billion for the period.

- 2 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

Electronics
The Electronics segment reported lower net sales compared to the same period in the prior fiscal year. While sales increased inEurope and the United States, these gains could not compensate for lower revenues in Japan and Northeast Asia.
The electronic chemicals business recorded increased sales for the period, driven higher by increase in epoxy resin sales.
The electronic materials business reported lower sales overall, mainly due to a decline in revenues for liquid crystal-related
products caused by sluggishness in the smartphone market.
As a result, the segment recorded net sales of ¥127.92 billion, representing a ¥22.02 billion (14.7%) decrease. Operating
income amounted to ¥6.25 billion, which was ¥670 million (12.0%) higher. This result was mainly due to the impact of theCompany's Taiwanese subsidiary recording an allowance for doubtful accounts during the prior fiscal year.

Automotive & Energy
Net sales for the Company's automobile-related business were level with the same period in the prior fiscal year. Whiledomestic sales were affected by lower automotive production, sales of products for certain car models rose over the period.
Overseas, the business saw strong sales in the Americas, China, and Southeast Asia, driving sales higher.
As a result, segment net sales amounted to ¥115.35 billion, a ¥5.5 billion (5.0%) increase. Operating income was ¥1.3 billion,
representing a ¥920 million (41.7%) decrease. This decrease was mainly due to expenses incurred in connection with thelaunch of a new business in Japan.

Life & Healthcare
The Life & Healthcare segment reported higher sales with strong performance in both domestic and overseas markets.
The life & healthcare products business recorded increase in domestic and overseas sales of TREHA™ and other products tothe food materials industry. In the skin care and toiletries field, the business recorded higher sales of AA2G™, particularly tomajor customers in Japan. The segment also showed strong performance in sales of raw materials to the same skin care andtoiletries markets. In the pharmaceuticals and medical fields, sales of raw pharmaceuticals, intermediates, and medical
materials rose slightly. As a result, the business reported higher overall net sales.
The beauty care products business, which includes sales of cosmetics and health foods, reported a slight decrease in net sales.
Net sales growth for new products launched during the second half of the year could not compensate for the sluggishness inexisting product sales.
As a result, segment net sales amounted to ¥85.57 billion, which was an ¥8.96 billion (11.7%) increase. Operating income
increased ¥700 million (22.4%), reaching ¥3.86 billion.

Other
No special matters to disclose.

- 3 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(Forecast for the Fiscal Year Ending March 2017)
a. Performance Forecast for the Fiscal Year Ending March 2017
While the economy of the United States is expected to grow stronger, supported by the underlying strength of consumer
spending, there are also concerns that interest rate hikes may have an impact on the U.S. economy, as well as the economies ofthe emerging countries. Expected slowdowns in business in China and the negative impact on a stronger yen on corporate
earnings in Japan have resulted in predictions of an ongoing unstable business environment.
In light of this business environment, the NAGASE Group launched ACE-2020, a five-year mid-term management plan built
on the two pillars of Profit Structure Reform and Corporate Culture Reform. Under ACE-2020, we will step away from theidea of NAGASE as a trading firm first and foremost. We now consider the trading firm function as another of our Groupfunctions, as we maximize the leverage of our manufacturing, research, overseas network, logistics, and investment functions,
uniting as a Group to create and deliver new value to the world.
The forecast for NAGASE Group earnings is as shown below. These forecasts have been developed based on a currency
conversion rate of ¥108 to the US dollar.
(Millions of yen)
Net sales
Fiscal Year ending March 31,
2017
Fiscal Year ended March 31,
2016
ChangeOperating income

Ordinary income

Profit attributable toowners of the parent

735,000

14,50016,0009,500

742,194

18,024

18,39012,316-1.0%-19.6%-13.0%-22.9%

Company (NAGASE & CO., Ltd.) Retirement Benefit Expenses
The Company fully amortizes actuarial gains and losses related to retirement benefit obligations and plan assets in the
consolidated fiscal year following the year of occurrence. Due to an interest rate reduction after the beginning of the year, theCompany revised the discount rate at the end of the current consolidated fiscal year, and this resulted in a ¥3.1 billion actuarial
losses. The forecast above includes this as part of the retirement benefit expense.

b. Net Sales Forecast by Business Segment(Millions of yen)
Fiscal year ended MarchFiscal year ending March

2016 Actual2017 Forecast

ChangeFunctional Materials
Advanced Materials & Processing

157,149
255,505

158,600
254,700

+0.9％
-0.3％

Electronics
Automotive & Energy

127,926
115,351

119,300
113,600

-6.7％
-1.5％

Life & Healthcare
Other85,571
689

88,100
700

+3.0%
+1.6%

Total Sales

742,194

735,000-1.0％(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, 2016

(2) Analysis of Financial Positiona. Summary of Consolidated Balance Sheets
As of the end of the consolidated fiscal period, current assets amounted to ¥312.33 billion. This represents a decrease of ¥17.51
billion compared to the end of the prior consolidated fiscal year, mainly due to decreases in accounts receivable and inventories.
Non-current assets amounted to ¥199.74 billion, down ¥16.93 billion. This was due mainly to a fair value decline in ofinvestments in securities. As a result, total assets decreased by ¥34.44 billion, down to ¥512.08 billion as of the end of theconsolidated fiscal year.
Liabilities amounted to ¥232.93 billion, down ¥26.09 billion compared to the end of the prior consolidated fiscal year due todecreases in accounts payable and deferred tax liability (non-current)
Net assets amounted to ¥279.14 billion, down ¥8.35 billion. This was mainly due to decreases in net unrealized holding gains
on securities and translation adjustments, despite the Company recording profit attribute to owners of the parent in the amountof ¥12.31 billion.
As a result, the Company reported a shareholders’ equity ratio of 53.5%, up 2.0 points compared to the end of the priorconsolidated fiscal year.

b. Summary of Consolidated Cash Flows
Cash and cash equivalents (Cash) increased by ¥2.37 billion (5.9%) compared to the end of the prior consolidated fiscal year,
amounting to ¥42.9 billion. Cash from operating activities amounted to ¥29.37 billion, while cash used in investing activities
came to ¥12.6 billion and cash used in financing activities amounted to ¥12.82 billion. In addition, Cash balances decreased¥1.57 billion due to the effect of exchange rate fluctuations.

(Cash Flows from Operating Activities)
Cash flows from operating activities for the consolidated fiscal year amounted to ¥29.37 billion. This result was mainly due toincome before income taxes and non-controlling interests of ¥15.23 billion and depreciation and amortization of ¥9.49 billion,
offsetting ¥4.54 billion in income tax payments.

(Cash Flows from Investing Activities)
Cash used in investing activities during the consolidated fiscal year amounted to ¥12.6 billion. This result is mainly due to¥10.83 billion in purchases of property, plant and equipment and intangible fixed assets. The Company also made cash outlaysof ¥2.12 billion for purchases of investment securities.

(Cash Flows from Financing Activities)
Cash used in financing activities for the consolidated fiscal year amounted to ¥12.82 billion. This result is mainly due to ¥6.44
billion in repayments of long-term loans and ¥3.93 billion in dividend payments.

- 5 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

FYE March

FYE March

FYE March

FYE March

FYE March

2012

2013

2014

2015

2016

Shareholders' equity ratio

45.4%

46.9%

49.5%

51.5%

53.5%

Shareholders' equity ratio basedon market value

29.2%

29.9%

32.5%

36.6%

30.7%

15.6 years

5.3 years

7.3 years

6.4 years

3.0 years

8.9

17.7

11.3

13.7

29.0

Interest-bearing debt to cash
flow ratio
Interest coverage ratio

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 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 Ended and Ending March 2016 and 2017
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 activities and to build a stronger management foundation.
The NAGASE Group declared a year-end dividend of ¥16 per share based on this policy. As a result, the scheduled full-year
cash dividend will amount to a total of ¥32 per share.
We forecast a full-year dividend of ¥32 per share for the next fiscal year, consisting of a ¥16 per-share interim dividend and a¥16 per-share year-end dividend.

(4) Operating and Other Risks
The NAGASE Group is engaged in trading, marketing, research and development, manufacturing and processing in six
business segments across the world: Functional Materials, Advanced Materials & Processing, Electronics, Automotive &Energy, Life & Healthcare, and Other.
The nature of these businesses entails various risks that may have a material effect on investment decisions. We provide a
discussion of the major risks below.
Any forward-looking statements are based on management decisions as of the end of fiscal year under review.

a. Overall Operating Risk
The NAGASE Group is engaged in activities that rely on the use of chemicals across a wide spectrum of products and services
through our Functional Materials, Advanced Materials & Processing, Electronics, Automotive & Energy and Life & Healthcare
business. These products and services include dyes/pigments, coating materials/inks, surfactants, OA, electrical equipment,
home electronics, automobiles, LCDs, semiconductors, and pharmaceutical/medical applications. Accordingly, significant
changes in domestic and international commercial chemicals industry could affect the NAGASE Group's earnings andfinancial condition.
- 6 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016b. Product Market Conditions
The NAGASE Group handles extensive petrochemicals manufactured from naphtha in our Functional Materials, Advanced
Materials & Processing, and Automotive & Energy segments. Raw materials markets and demand-supply balance are two
factors that result in unique market circumstances for each of our products. Fluctuations in these factors could affect ourrevenues and profits in related product lines. Also, some products manufactured by the Group use raw materials derived fromgrains. Raw materials costs fluctuate widely due to changes in grain market prices; we may not be able to pass on increased
raw materials costs through higher sales prices, which could affect our profits in related product lined.

c. Impact of Fluctuations in Foreign Currency Exchange Rates
The NAGASE Group conducts import/export as well as non-trade business transactions denominated in foreign currencies.
Fluctuations in currency markets have a significant impact when prices are converted to yen. While the Group executes
exchange contract hedges for these transactions to minimize exchange rate risk to the greatest extent possible, currency
exchange rate fluctuations could have a significant impact on Group earnings and financial conditions. The NAGASE Groupowns foreign-domiciled corporations whose financial statements are prepared using local currencies. The conversion of thesecurrencies to Japanese yen for consolidated reporting purposes entails currency conversion risk due to fluctuating exchange
rates.

d. Impact of Fluctuations in Interest Rates
The NAGASE Group obtains funds for operating and investing activities through loans from financial institutions; some ofthese loans are interest-bearing debt including variable interest terms. The Group reduces interest rate fluctuation risk related tovariable interest loans by utilizing interest-rate swap contracts. Group earnings and financial conditions may be affected by
future interest rate trends.
Interest rate fluctuations cause variations in discount rates used for retirement benefit obligations and plan asset investment
income, impacting NAGASE Group business performance and financial position.

e. Risks Involved in Operating Overseas
A significant and increasing percentage of NAGASE Group sales and manufacturing are conducted overseas in locations suchas China, Southeast Asia, Europe, and the United States. While Group management keeps a close eye on local trends andconditions in order to respond appropriately, unforeseen events stemming from local government regulations, business customs,
or other influences could have an impact on Group business performance and financial conditions.

f. Impact of Changes in Stock Prices
The NAGASE Group maintains a portfolio of marketable securities, primarily equity shares of companies doing business with
the Group. These equity investments are subject to share price fluctuation risks. As a matter of policy, the NAGASE Group
reduces risk by continuously reviewing and reorganizing its shareholdings. However, changes in share prices could impact
Group earnings and financial condition. A decline in share prices could damage the value of pension plan assets managed by
the Group, increasing retirement benefit costs and thereby reducing Group profits.

g. Counterparty Credit Risk
The NAGASE Group extends credit to domestic and overseas purchasers in connection with various transactions. As a matterof policy, the NAGASE Group reduces credit risk by obtaining guarantees, collateral, and insurance, etc. according to thefinancial condition of the purchaser. Although the NAGASE Group strives to ensure stable, uninterrupted product procurement,
financial weakness or bankruptcies among suppliers or others could damage the Group's ability to procure goods. Suchcircumstances could have an impact on the Group’s earnings and financial condition.

h. Risk of Investments
The NAGASE Group engages in investment activities to establish new companies, to invest in equipment at manufacturingsubsidiaries, and to acquire other business entities. These types of investment activities involve certain risks, including the riskof failing to recover investments in cases where the Company is not able to record profits at initially planned levels, the risk
- 7 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016that additional funding may be required, and the risk that the Group will not be able to withdraw from investments according to
the desired timing and method. The NAGASE Group strives to reduce risk in this area. Decisions to invest in new businesses
are made after a careful study of the viability of business plans and profitability. At the same time, the Group regularly
monitors the performance of existing investments. However, even these management initiatives cannot completely negate
potential investment risk, and such risk may have an impact on Group earnings and financial condition.

i.

Risk of Asset Impairment

The NAGASE Group owns non-current assets such as business assets in manufacturing subsidiaries and goodwill. These assets
entail the risk of impairment loss if asset value declines. The NAGASE Group records impairment lossess when deemednecessary. However, even greater impairment losses may be incurred as a result of deteriorating business profits or otherfactors in the future, which may have an impact on Group business performance and financial condition.

j. Product Quality Risk
The NAGASE Group operates the Nagase R&D Center and manufacturing subsidiaries to offer high-value-added products toour customers. We pay detailed attention to the quality of the technologies and products that bear the name of Nagase and ouraffiliates. We also bear manufacturers' liability for imported products, products manufactured on a contract basis, etc.
Accordingly, the Group treats these products with the same attention to detail and quality as if they were made in our own
facilities. However, product defects could result in cessation of sales and/or product recalls, exposing the N AGASE Group toliability for damages, which could have an impact on Group earnings and financial conditions.

k. Risks related to Product Laws
The N AGASE Group imports, exports, and sells domestically a wide variety of chemicals and other products for a broad range
of uses. To maintain international peace and safety, the chemicals and other items we export are subject to different laws,
including the Foreign Exchange and Foreign Trade Control Law and the Export Trade Control Order. Imports and domestic
sales are subject to the Chemical Substances Control Law and other related statutes, as well as similar regulations in foreign
jurisdictions. To ensure compliance, the Group has established internal Security Trade Control Regulations andChemical/Product Control Regulations. However, a violation of such laws and statutes could result in restrictions on Groupbusiness activities, having an impact on Group earnings and financial condition.

l.

Risks of Natural Disasters

The N AGASE Group has put emergency response systems in place, including the creation of a business contingency plan, theadoption of safety confirmation systems, the creation of a disaster-response manual, earthquake-response measures, disasterresponse training, and other measures to deal with natural disasters. However, as we conduct business across a great number ofcountries and regions, we are exposed to the risk of major natural disasters, H1N1 influenza and other communicable diseases,
and other emergencies that could disrupt our supply chain. Such disruptions could prevent us from selling our products or
damage the manufacturing capabilities of important Group facilities. Such interruptions would result in opportunity loss, andcould have a significant impact on Group earnings and financial condition.

- 8 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

2. Management Policies（１） Basic Management Policy＜NAGASE Management Philosophy＞
We recognize our responsibility to society and offer beneficial products and services
while maintaining the highest standards of integrity.
Through our growth, we will contribute to society and enrich the lives of our employees.

＜NAGASE Vision＞
To realize a sustainable world where people live with peace of mind,
each of us embodies our value proposition, Identify,
Develop and Expand through daily activities.

＜NAGASE slogan＞
Bringing it all together
Consistent with this management philosophy, we believe our most important goal is to contribute to society, including efforts tomaintain good and fair business practices, while ensuring continued growth and development.
This vision has been design to develop a shared awareness of our standing management philosophy in engaging in maintaining
the highest standards of integrity. The NAGASE Vision is a promise to all stakeholders. To realize a sustainable world where
people live with peace of mind, each of us embodies our value proposition, Identify, Develop and Expand through daily
activities.
NAGASE has also created a slogan that embodies the idea of bringing infinite possibilities (people, things, information,technology, ideas, world, and time) together.

（２） Management Objectives, Medium-Term Strategies and Issues to be Addressed by the Company
Long-Term Management Policy
As we approach year 2032, our 200th anniversary, we planned Long-Term Management Policy to aim
normalization of 3 times of profit of today through “Challenges for growth” and “Reinforce themanagement platform for growth”.
Realize a significant growth by allocating management resources to focused business and by shifting
operation from Japan-centrism to multinational management system under“Challenges for growth”. To lead growth challenges to success, construct a management platform that willcontribute to business expansion and globalization with ”Reinforce the management platform for growth”.
New Mid-Term Management Plan ACE-2020
To achieve our Long-Term Management Plan, we divide 17 years of its term into three and start stage
1:”Reform” as the beginning of the Mid-Term Management Plan, ACE-2020. ACE-2020 stands for
Accountability, Commitment and Efficiency by throughout 2020.
With ACE-2020, we strings all the groups together to create and provide new value to the world through6 key functions; Trading, Manufacturing, R&D, Global Network, Logistics and Investment.
Under this plan, we will set aside 100 billion yen for growth investments to increase group profits. This
fund will be financed as a rule through operating cash flows and interest-bearing debt. At the same time,
we will ensure long-term, stable dividends through working capital efficiencies and asset replacement.
The following table shows the quantitative targets of ACE-2020:
Targets
Consolidated
Sales
Consolidated
Operating
IncomeROE

FY2015 Actual
1T

742B

30B

18B

6.0%<

4.4%

※Our goal is to normalize the above target.
- 9 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

New Mid-Term Plan
ACE-2020 enforces two kinds of reform, ”Reform Profit Structure” and “Reform Corporate Culture”.
① Reform Profit Structure
Focused Measures①-1: Portfolio Optimization
Divide entire businesses into 4 sectors, “Growth/Emerging”, ”Focus”, “Base” and “Improvement” togain maximum efficiency of management resources and expand business. In addition, solidify
management resource that can be reallocated and conduct aggressive growth investment in order toaccelerate the asset replacement. Furthermore, growing investment distribution ratio for focus area has
set to be greater than 35%.
Focus Area：Life & Healthcare, Electronics
Focused Measures①-2: Expand and Strengthen Revenue Base
Trading and manufacturing business sector stands individual KPI to improve each function. We create
new business by leverage entire functions.
Our trading business sector will elevate the presence of the NAGASE Group through increased overseas
sales and accelerated globalization, founded on effective market strategy execution in each region.
The manufacturing business sector will be managed based on long-term strategy. This strategy will
support to raise “Focus” business that prioritizes to increase mid-term free cash flow and to pursue
management stability by effective cost-down.
② Reform Corporate Culture
Focused Measures ②-1: Mindset
Establish four mindset concepts for creating a corporate culture in which the entire NAGASE Group isaligned toward the same goals: Accountability, Responsibility and Risk Awareness, Monitoring and
Message Sharing, PDCA. Increase accuracy to achieve target by delegating authority to local units;change HR policies; step up management visibility; and exercise PDCA through ongoing monitoring.
Focused Measures②-2: Strengthen Management Platform
Pursue efficiency by back office section routine review, redefinition and reconstruction of theorganization scale, integrate group companies and segments where creates the synergy to improveconsolidated SG&A ratio by 0.5%.
Accelerate HR Development to increase group competition and sustainable development by carrying
long term career plans and proactively recruit talents from outside.
3. 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 for some time, and plan to make theappropriate policy choice in the future, considering external trends and other factors.

- 10 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2015)

Current Consolidated Fiscal Year
(March 31, 2016)

40,575208,209
63,719
1,668
3,625
4,058
8,797
(806)
329,848

43,283
196,335
57,404
1,726
3,789
2,842
7,843
(890)
312,334

54,037(28,241)
25,796
61,161(46,512)
14,64918,97623,871(16,519)
7,352
66,77455,731(29,915)
25,816
62,660(47,245)
15,414
18,91022,962(16,629)
6,333
66,474

27,626
16,942
4,276
48,844

24,582
15,366
4,567
44,516

92,638
1,139
2,381
6,277
(1,378)101,058
216,677
546,525

81,345
1,023
1,544
5,017
(174)
88,755
199,747
512,081ASSETS
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
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 11 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2015)

Current Consolidated Fiscal Year
(March 31, 2016)

105,737
31,3886,377
10,000
2,268
19
4,314
213
16,105
176,424

97,80025,294
8,823
4,305
13
4,224
194
15,461
156,118

20,00030,322
20,272
10,803
1,201
82,600259,025

30,00023,1088,433
14,0601,211
76,813232,932

9,699
11,654205,203(228)
226,328

9,699
11,615
213,572(230)
234,657

44,9203
9,478
666
55,0696,102
287,500
546,525

37,074(9)
4,411(2,169)39,3055,185
279,149
512,081

LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
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 (loss) gain 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- 12 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2014 March 31, 2015)

Current Consolidated Fiscal Year
(April 1, 2015 March 31, 2016)

759,713667,722
91,991

742,194
650,530
91,663

10,921
22,307
2,706
202
4,407
896
44
1,011
1,623
29,717
73,83818,153

11,21422,020
2,861
177
4,343
403
37
(23)
1,634
30,96773,63918,024

196
1,259
253
616
921
682
3,930

202
1,360
293
643
2,499

1,098
619
1,718
20,366

1,048
48
401
635
2,133
18,390

392
213
606

57
70
33
161

69
84
602
0
479
20
249

47
251
2,756
9
70
-

171

-

114
163
25
1,983
18,989
6,238
834
7,073
11,916597
11,318177
3,313
15,2396,536(3,763)
2,772
12,466150
12,316

Net 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
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 gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
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
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on disposal of non-current assets
Impairment losses
Loss on sale of investments securities
Loss on valuation of investments securities
Loss on sales of investments in capital
Loss on sales of shares of subsidiaries and affiliates
Loss on sales of investments in capital of subsidiaries
and affiliates
Loss on transfer of business
Loss on withdrawal from employees’ pension funds
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- 13 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(Consolidated Statement of Comprehensive Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2014 March 31, 2015)

Current Consolidated Fiscal Year
(April 1, 2015 March 31, 2016)

11,916

12,46620,1863
7,339
285(7,844)(13)(5,065)(2,835)

720

(553)

28,53640,453(16,312)(3,845)39,085
1,367(3,446)(399)

Net income
Other comprehensive income
Net unrealized holding (loss) gain on securities
Deferred (loss) gain 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:Shareholders of the Company
Non-controlling interests- 14 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(3) Consolidated Statement of Change in Shareholders’ Equity
Prior Consolidated Fiscal Year (April 1, 2014 to March 31, 2015)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Cumulative effects of changes
in accounting policies
Restated balance

9,699

Retained earnings

10,242

206,351

1,998(2,791)

12,240203,560

Less treasury stock, at
cost

Total shareholders’equity(6,916)219,377(792)(6,916)

218,584

ChangesCash dividends(3,683)(3,683)

Profit attributable to ownersof the parent

11,318

11,318Purchases of treasury stock
Disposal of treasury stock0

Retirement of treasury stock(607)

Equity transactions with
non-controlling interests

21(6,081)

(1)

(1)

0

0

6,688

21

Changes in scope of
consolidation
Changes other thanshareholders’ equity
accounts (net)89

Total changes
Balance, end of period

89

-

(585)

1,642

6,687

7,744

9,699

11,654205,203(228)

226,328

Accumulated other comprehensive income (loss)

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred (loss)
gain on hedges

24,725(0)

Cumulative effects of changes
in accounting policies
Restated balance

Remeasurements
Translationof defined benefit
adjustments
plans
2,239

380

(64)
24,725(0)

2,175

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets

27,346

5,168

251,892(64)
380

27,281

(857)
5,168

251,035

ChangesCash dividends(3,683)

Profit attributable to ownersof the parent

11,318Purchases of treasury stock(1)

Disposal of treasury stock0

Retirement of treasury stock-

Equity transactions with
non-controlling interests

21

Changes in scope of
consolidation
Changes other thanshareholders’ equity
accounts (net)89
20,194

3

7,303

285

27,787933

28,720Total changes

20,194

3

7,303

285

27,787933

36,465

Balance, end of period

44,920

3

9,478

666

55,0696,102

287,500- 15 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

Current Consolidated Fiscal Year (April 1, 2015 to March 31, 2016)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Retained earnings

11,654

Less treasury stock,at cost205,203

Total shareholders’equity(228)

226,328

ChangesCash dividends(3,937)(3,937)

Profit attributable to ownersof the parent

12,316

12,316

Purchases of treasury stock(1)

Equity transactions with
non-controlling interests

(1)

(38)

(38)

Changes in scope of
consolidation
Changes other thanshareholders’ equity
accounts (net)(9)

Total changes
Balance, end of period

(9)

-

(38)

8,368

(1)

8,328

9,699

11,615

213,572(230)

234,657

Accumulated other comprehensive income (loss)

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred (loss)
gain on hedges

Translation
adjustments

44,920

3

9,478

Total
Non-controlling
Remeasurements accumulated
interestsof defined benefit
other
plans
comprehensive
income666

55,0696,102

Total net assets

287,500

ChangesCash dividends(3,937)

Profit attributable to ownersof the parent

12,316

Purchases of treasury stock(1)

Equity transactions with
non-controlling interests(38)

Changes in scope of
consolidation
Changes other thanshareholders’ equity
accounts (net)(9)(7,845)(13)(5,067)(2,835)(15,763)(916)(16,679)

Total changes(7,845)(13)(5,067)(2,835)(15,763)(916)(8,351)

Balance, end of period

37,074(9)

4,411(2,169)39,3055,185

279,149- 16 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(4) Consolidated Statements of Cash Flows(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2014 March 31, 2015)

Current Consolidated Fiscal Year
(April 1, 2015 March 31, 2016)

18,98915,239

9,292
1,623
602

9,493
1,634
2,756

(507)

(848)

(1,456)
1,098
882
(322)
228
2,430
(7,172)(4,993)
2,324
23,0191,893(1,128)(8,310)15,474(1,562)
1,048
(640)
(10)
(94)
6,784
3,162
(3,829)(168)
32,964
1,965(1,013)(4,540)29,376(10,899)
1,022(1,046)
(624)
2,456

(8,937)414(1,898)(2,129)
213

(305)

-

(2)
1,165
497
4
(7,732)

(177)
(351)
265
(12,600)(1,585)
9,327(6,805)(1)(3,683)(334)(122)(3,205)(3,764)
1,976(6,440)
9,949(10,000)(1)(3,937)(421)(182)(12,822)2,129(1,575)

6,664
33,8252,377
40,52232-

40,522

42,900Cash flows from operating activities
Income before income taxes and non-controllinginterests
Depreciation and amortization
Amortization of goodwill
Impairment losses
Increase (decrease) in adjustments for retirement
benefits
Interest income and dividend income
Interest expenses
Foreign exchange loss (gain)
Loss (gain) on sale of non-current assets
Loss (gain) on sale of investment securities(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Income Tax paid
Cash flows from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Cash from sale of property, plant and equipment
Purchases of intangible fixed assets
Purchases of investments securities
Cash from sale of investment securities
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Change in short-term loans (increase)
Net decrease (increase) in time deposits
Proceeds from transfer of business
Other
Cash flows from investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans, net
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from issuance of bonds
Payments for redemption of bonds
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Other
Cash flows from 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
Increase in cash and cash equivalents accompanying
consolidation
Cash and cash equivalents, at end of the period- 17 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016(5) Notes related to Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Change in Presentation Methods)
The Company has adopted the provisions of Paragraph 39 of the Accounting Standard for Consolidated Financial Statements(ASBJ Statement No. 22, September 13, 2013). Accordingly, the Company has changed its presentation with respect toquarterly net income, as well as changing its presentation from “minority interests” to “non-controlling interests.” To reflect
these changes in presentation, the Company has reclassified its financial statements for the prior consolidated fiscal year.

(Additional Information)(Revised Balances for Deferred Tax Assets and Deferred Tax Liabilities due to Change in Corporate Tax Rates)
The Act for Partial Amendment of the Income Tax Act, Etc. (Act No. 15, 2016) and the Act for Partial Amendment of the Local
Tax Act, Etc. (Act No.13, 2016) were enacted on March 29, 2016 by the Japanese government. According to the revised laws,
corporate tax rates have been reduced for consolidated fiscal years beginning on or after April 1, 2016. In conjunction with thischange in law, the effective statutory tax rate used for calculating deferred tax assets and deferred tax liabilities has beenchanged from 32.3% to 30.9% for temporary differences expected to be settled during the consolidated fiscal years beginningon April 1, 2016 or April 1, 2017, and 30.6% for temporary differences expected to be settled during consolidated fiscal years
beginning on or after April 1, 2018.
As a result of this change in tax rates, the Company has written down deferred tax liabilities (net of deferred tax assets) by¥381 million. Income taxes-deferred and other comprehensive income have increased by ¥448 million and ¥830 million.

(Application of the Consolidated Tax Payment System)
During the current consolidated fiscal year, the Company and certain consolidated subsidiaries filed for approval to use theConsolidated Tax Payment System. The Consolidated Tax Payment System will be applied to these entities beginning with thefollowing consolidated fiscal year. Beginning with the current consolidated fiscal year, the Company conducts its accounting
assuming the application of the Consolidated Tax Payment System, as provided under Practical Solution on Tentative
Treatment of Tax Effect Accounting Under Consolidated Taxation System (Part 1) (ASBJ Practical Issues Task Force Report
No. 5, January 16, 2015) and Practical Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation
System (Part 2) (ASBJ Practical Issues Task Force Report No. 7, January 16, 2015).
As a result of these changes, tax expenses (income taxes-current and income taxes-deferred) have decreased by ¥5,192 million.

- 18 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

(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, plastic materials,
plastic additives, industrial oil solutions, surfactants, fluorochemicals, encapsulant materials, and silicone materials and more
for the paints/inks, resins, urethane foam, organic synthesis, surfactants, semiconductor industries.
The Advanced Materials & Processing segment is engaged in the sales of dyestuffs, dyes, functional dyes, information printing
products, thermoplastic resins, thermosetting resins, synthetic rubber, inorganic materials, plastics products, resins molding
tools/dies, external inspection equipment for the dye/additive, information printing, fiber processing, raw resin material, resin
molding, functional film and sheet and other industries.
The Electronics segment is engaged in the sales of pre-processing materials and devices for LCD/semiconductors, materials for
LCD 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, LCD, semiconductor, hard disk drive, electronic
components, and heavy electrical industries.
The Automotive & Energy segment is engaged in sales of plastic products, thermoplastic resins, thermosetting resins, resins
molding tools/dies, battery materials, solar cell/secondary battery-related 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/fertilizers, and surfactants for thepharmaceutical, 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 profit. Inter-segment profits and transfers are based on actual market
prices.

- 19 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

3. Information related to Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Prior Consolidated Fiscal Year (April 1, 2014 to March 31, 2015)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics& Energy Healthcare
Materials
Processing

Total

Other
(Note) 1

Total(Millions of yen)Toconsolidated
Corporate Adjustments
financial(Note) 2(Note) 3
statements(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

168,238

254,165

149,947

109,851

76,609758,812

900

759,713－－759,713

2,361

2,224

858

2,827

286

8,559

4,955

13,515－(13,515)－

Total

170,600

256,390

150,805

112,679

76,896

767,3725,856

773,229－(13,515)759,713

Segment income(loss)

4,302

4,804

5,583

2,229

3,157

20,077201

20,278(2,600)475

18,153

Segment assets

75,590131,543

66,86245,213

98,250417,461

7,210

424,671

155,720(33,866)

546,525

483

802

2,649

122

3,136

7,193

198

7,392

1,900

－

9,292

－

－

120

－

1,502

1,623

－

1,623

－

－

1,623

－

－

2,214

－

25,412

27,626－

27,626－－

27,626

2,079

2,507

132

1,932

2,219

8,871

1,896

10,768－(57)

10,711

330

1,392

2,460

346

5,720

10,250317

10,568

1,144－

11,712

Other
Depreciation
and amortization
Amortization of
goodwill
Goodwill,
unamortized
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 profit (loss) totals, Corporate and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

- 20 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

Current Consolidated Fiscal Year (April 1, 2015 to March 31, 2016)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics& Energy Healthcare
Materials
Processing

Total

Other
(Note) 1

Total(Millions of yen)Toconsolidated
Corporate Adjustments
financial(Note) 2(Note) 3
statements(Note) 4

Net sales
Sales tocustomers

157,149

255,505

127,926

115,351

85,571

741,505

689

742,194－－742,194

Intersegment
sales/transfers

1,955

2,241

1,211

2,626

514

8,549

5,851

14,401－(14,401)－

Total

159,105

257,747

129,138

117,978

86,086750,055

6,540

756,595－(14,401)

742,194

Segment income(loss)

3,679

4,979

6,255

1,300

3,864

20,079215

20,295(2,725)455

18,024

Segment assets

71,042

122,80262,912

42,136

99,620398,5147,213

405,728

145,038(38,685)

512,081

509

859

2,672

157

3,258

7,458

208

7,667

1,826

－

9,493

－

－

132

－

1,502

1,634

－

1,634

－

－

1,634

－

－

672

－

23,90924,582－

24,582－－

24,582

1,752

2,389

1,968

1,355

2,385

9,852

1,944

11,797－(53)

11,743

1,690

1,466

2,855

244

2,341

8,598

158

8,757

2,368

－

11,125

Other
Depreciation
and amortization
Amortization of
goodwill
Goodwill
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 profit (loss) totals, Corporate and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016b． Other Information
Prior Consolidated Fiscal Year (April 1, 2014 to March 31, 2015)
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

Northeast Asia

374,208

217,232

Southeast Asia

North America

122,493

29,995

Europe & Others
15,783

Total
759,713(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.

(2) Property, plant and equipment(Millions of yen)
Japan

Other

Total

58,897

7,877

66,774

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

Current Consolidated Fiscal Year (April 1, 2015 to March 31, 2016)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

2. Geographic Information(1) Net sales

Japan

Northeast Asia

363,038

221,197

Southeast Asia

North America

109,837

30,684

Europe & Others
17,437

Total
742,194(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.

(2) Property, plant and equipment

Japan

Other
59,646

Total
6,828

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

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66,474

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

c． Impairment Losses of Non-Current Assets for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2014 to March 31, 2015)(Millions of yen)
Reportable Segments
Advanced
Automotive Life &Functional
Materials & Electronics& Energy Healthcare
Materials
Processing
Impairment
loss

－

74

176

78

Corporate/
Elimination

Other
Total

－

－

328

Total

273

602

Current Consolidated Fiscal Year (April 1, 2015 to March 31, 2016)(Millions of yen)
Reportable Segments
Advanced
Automotive Life &Functional
Materials & Electronics& Energy Healthcare
Materials
Processing
Impairment
loss

－

818

1,862

36

－

Corporate/
Elimination

Other
Total

2,717

－

39

Total

2,756

(Note) The profitability of the business assets in the color former manufacturing business of the Advanced Materials & Processing
segment has degraded significantly. Accordingly, the Company has written down the book value of these assets torecoverable amounts, recording ¥500 million in related impairment costs. The profitability of the business assets in theplastic materials processing business of the same segment has also degraded significantly. Accordingly, the Company has
written down the book value of these assets to recoverable amounts, recording ¥304 million in related impairment costs.
At present, the Company does not believe the commercial adhesive development and manufacturing business of theElectronics segment will return profits as originally projected. Accordingly, the Company has written down the bookvalue of the associated goodwill of this business to recoverable amounts, recording ¥1,364 million in impairment costs.
The profitability of the business assets in the thin glass processing business for glass substrate of the same segment has
degraded significantly. Accordingly, the Company has written down the book value of these assets to recoverable amounts,
recording ¥440 million in impairment costs.
The Advanced Materials & Processing segment recorded impairment loss of ¥500 million to the color former
manufacturing business assets due to decreasing profitability. The segment also recorded another impairment of ¥304
million in the plastic materials processing business assets, also out of decreasing profitability. In both cases, the Company
wrote down the book values of these assets to their respective recoverable amounts.
The Electronics segment recorded impairment loss of ¥1,364 million in goodwill attributable to the commercial adhesive
development and manufacturing business, since the Company no longer expects profitability as originally projected. The
segment also recorded impairment in the amount of ¥440 million because of decreasing profitability in the thin glassprocessing business for glass substrate. In both cases, the Company wrote down the book values of these assets to theirrespective recoverable amounts.

d． Amortization and Unamortized Balance of Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2014 to March 31, 2015)
Omitted, as the same information has been disclosed under Segment Information.

Current Consolidated Fiscal Year (April 1, 2015 to March 31, 2016)
Omitted, as the same information has been disclosed under Segment Information.

e． Information about Gain on Bargain Purchase for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2014 to March 31, 2015)
No matters to report.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016

Current Consolidated Fiscal Year (April 1, 2015 to March 31, 2016)
No matters to report.

(Per-Share Data)
Prior Consolidated Fiscal Year
(April 1, 2014 - March 31, 2015)

Current Consolidated Fiscal Year
(April 1, 2015 - March 31, 2016)

Net assets per share¥2,215.18¥2,156.67

Earnings per share¥89.10¥96.96(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
(April 1, 2014 - March 31, 2015)

Current Consolidated Fiscal Year
(April 1, 2015 - March 31, 2016)

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

11,31812,316

Profit attributable to common stock owners of theparent (millions of yen)

11,31812,316

Average number of outstanding shares of common
stock (shares)

127,032,358

127,031,413(Significant Subsequent Events)
No matters to report.

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