Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022
<Under Japanese GAAP>

August 4, 2021

These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

Stock exchange listing: Tokyo (First Section)
NAGASE & CO., LTD.
Code number:8012
URL (https://www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Yoshihisa Shimizu, Executive Officer, General Manager, Corporate Management Department
TEL:+81-3-3665-3103
Filing of quarterly report (scheduled): August 13, 2021
Start of distribution of dividends (scheduled): Supplementary documents of quarterly financial results: Yes
Quarterly investors' meeting: No(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the First Quarter of the Fiscal Year Ending March 31, 2022
(April 1, 2021 to June 30, 2021)(1) Consolidated Operating Results
Net sales
For the firstquarter ended
June 30, 2021
June 30, 2020

Gross profit%

Millions of yen

184,389 36.9—
134,649(Notes) 1. Comprehensive income

Operating income%

Millions of yen

Millions of yen(% = year-on-year change)

Profit attributable toowners of the parent

Ordinary income%%

Millions of yen

34,589 32.7
26,058 2.6%Millions of yen

9,738 165.1
10,660 151.6
3,673 (30.1)
4,237 (27.5)
First quarter ended June 30, 2021: ¥10,814 million (8.7% decrease)

7,169
6,807

5.3
63.8

First quarter ended June 30, 2020: ¥11,850 million (―%)
2.

At the beginning of the first quarter of the fiscal year ending March 2022, the Company adopted the AccountingStandard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020).
Results for the first quarter of the fiscal year ended March 2021 reflect a retroactive application of this accounting
standard. As a result, net sales affected by this retroactive application do not show the year-on-year rate of change in thefirst quarter of the fiscal year ended March 2021.
Earnings per share

For the first quarter
ended
June 30, 2021
June 30, 2020

Earnings per share (diluted)
Yen

Yen

58.37
54.90

−
−

(2) Consolidated Financial Position
Total assets

Net assets

Millions of yen

June 30, 2021
March 31, 2021
(Reference) Equity capital

Shareholders’equity ratio

Millions of yen

662,953
640,587

Net assets per share%

344,028
338,431
As of June 30, 2021: ¥ 334,449 million
As of March 31, 2021: ¥ 329,687 million

Yen

50.4
51.5

2,738.38
2,670.09

2. Dividends
1Q
For the year ended (or ending)
Yen
March 2021−
March 2022−
March 2022 (forecast)(Note) Revisions to the latest dividends forecast: No

2Q

Annual dividends per share
3Q
Fiscal year end
Yen

22.00
24.00

Yen

Yen

Annual
Yen

−

24.00

46.00

−

24.00

48.00

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2022
(April 1, 2021 to March 31, 2022)(% = year-on-year change)

Gross profit
Millions of yen

Full fiscal year

130,000

Operating income%

13.4

Millions of yen

30,000

Profit attributable toowners of the parent

Ordinary income%

36.9

Millions of yen

31,000%35.6

Millions of yen

22,500Earnings per
share

%

19.5

Yen

185.05(Notes) 1. Revisions to the latest consolidated earnings forecast: Yes
2. For details, please refer to 1. Qualitative Information, (3) Qualitative Information Related to Consolidated Earnings
Forecasts, on P.6 of this document.

* 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) Application of special accounting methods to the preparation of quarterly financial statements: Yes(Note)For details, please refer to 2. Quarterly Consolidated Financial Statement and Notes, (3) Notes Related to Quarterly
Consolidated Financial Statements (Specific Accounting Treatment Applied in Preparing Quarterly Consolidated Financial
Statements), on P. 12 of this document.

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: Yes
ii. Changes in items other than (i) above: Yesiii. Changes in accounting estimates: No
iv. Restatement of prior period financial statements after error corrections: No(Note) For details, please refer to 2. Quarterly Consolidated Financial Statement and Notes, (3) Notes Related to Quarterly
Consolidated Financial Statements (Change to Accounting Policy), on P. 12 of this document.

(4) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)June 30, 2021
124,408,285 shares March 31, 2021
124,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
June 30, 2021
2,274,277 shares

March 31, 2021

Average number of shares during the period
June 30, 2021
122,837,754 shares

June 30, 2020

933,995 shares

124,011,553 shares* Quarterly financial statements are not subject to quarterly review.
* 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.
For matters related to earnings forecasts, please refer to 1. Qualitative Information, (3) Qualitative Information Related toConsolidated Earnings Forecasts, on P. 6 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

Attachments
1.

Qualitative Information

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

5(3) Qualitative Information Related to Consolidated Earnings Forecasts

5

2． Quarterly Consolidated Financial Statements and Notes

7(1) Quarterly Consolidated Balance Sheets

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

9

Quarterly Consolidated Statements of Income

9

Quarterly Consolidated Statements of Comprehensive Income

10(3) Notes Related to Quarterly Consolidated Financial Statements

11(Assumption for Going Concern)

11(Significant Fluctuations in Shareholders’ Equity)

11(Specific Accounting Treatment Applied in Preparing Quarterly Consolidated Financial Statements)

11(Change to Accounting Policy)

11(Additional Information)

12(Segment Information, etc.)

13

－ 1 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

1. Qualitative Information(1) Review of Business Performancea.

General Summary of Results

In the first quarter of the current consolidated fiscal year, the global economy saw a restart of economic activity among countries withadvancing vaccination efforts against COVID-19, and limited economic activities in regions with spreading variants of the virus. Despite
this geographic contrast, a recovery trend began to emerge overall. In the Japanese economy, despite some progress in vaccinations, it has
not led to a decrease in the number of infected people, and there was continued sluggishness in demand for tourism, travel, eating anddrinking industries, etc. due to continued activity restrictions. However, other industries trended relatively strong.
Among the regions where the NAGASE Group operates, rising demand for semiconductors and next-generation communications in Greater
China is leading to continued expansion of economy activity. While a gradual resumption of economic activities and economic stimulus are
expected to accelerate recoveries in the Americas and Europe, the resurgence of infections in ASEAN has led to concerns about economic
impact. In Japan, the resumption of economic activities has been limited due to repeated state of emergency declarations, but there has beenstark contrast between industries, including some achieving record high profits. Differences in economic recoveries in each country havebeen affected by vaccine distribution and other measures to prevent the spread of COVID-19. However, the outlook remains uncertain as
the pace of infections has accelerated in certain regions of the world.
In this environment, earnings for the first quarter of the current consolidated fiscal year are as follows.
Three-month
period ended
June 30, 2020Three-month
period ended
June 30, 2021

(Millions of yen)
ChangeChange (%)

Net sales

134,649

184,389

49,73936.9

Gross profit

26,05834,589

8,531

32.7

Operating income

3,673

9,738

6,065

165.1

Ordinary income

4,237

10,660

6,423

151.6

Profit before income taxes

9,798

10,881

1,083

11.1

6,807

7,169

361

5.3

Profit attributable to ownersof the parent*At the beginning of the first quarter of the current consolidated fiscal year, the Company adopted the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020). Indicators for the first quarter of the previous consolidated cumulative period
reflect a retroactive application of this accounting standard.
・ For performance in the first quarter of the current consolidated fiscal year, higher profit in all segments resulted in all stages of profit
below gross profit reaching record highs for the first quarter.
・ Factors behind the higher profits were the recovery of the automobile-related business, the continued strong performance of theelectronics-related business and resins business from the second half of the prior consolidated fiscal year, and performance of the
Prinova Group in the Life & Healthcare Segment driving up profits. For details, see b. Segment Summary.
・ Profit attributable to owners of the parent amounted to ¥7.1 billion, up only ¥300 million mainly due to a reactionary bounce fromrecording profits stemming from the sales of certain shares owned by the Company during the first quarter of the prior consolidated
fiscal year, despite an increase in ordinary income of ¥6.4 billion.

－ 2 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022b.

Segment Summary

The following describes performance by segment.
Note that as of the first quarter of the current fiscal year under review, the names and categorizations for reportable segments have been
partially amended. Year-on-year amounts and ratios for the first quarter of the prior cumulative period are calculated after rearranging
reportable segment classifications to match those of the first quarter of the current cumulative period.
Functional Materials
Three-month
period ended
June 30, 2020Three-month
period ended
June 30, 2021

(Millions of yen)
ChangeChange (%)

Net sales

16,504

24,634

8,129

49.3

Gross profit

3,442

4,868

1,426

41.4

874

1,981

1,107

126.6

Operating income

The major factors behind performance were as follows.
・ Raw materials sales recovered for coating and urethane raw materials as well as those related to processing industrial oil solutions andplastic materials, driven by a recovery in automobile production
・ Sales trended strong in areas like electronics chemicals for the electronics industry, such as for semiconductor-related products
・ Operating income increased due to an increase in gross profit
Advanced Materials & Processing
Three-month
period ended
June 30, 2020Three-month
period ended
June 30, 2021

(Millions of yen)
ChangeChange (%)

Net sales

44,17561,79917,62439.9

Gross profit

6,210

8,269

2,059

33.2

Operating income

1,461

3,299

1,838

125.8

The major factors behind performance were as follows.
・ Sales increased for synthetic resins for the office equipment, appliance, and video game device markets due to increased demand inJapan and overseas, mainly in China, and profitability improved due to soaring market conditions
・ Sales increased for plastic resins for industrial and packaging applications, as well as dyes and additives, due to recovery in demand
・ Sales decreased for digital print processing materials and conductive materials
・ Operating income increased due to an increase in gross profit
Electronics & Energy
Three-month
period ended
June 30, 2020Three-month
period ended
June 30, 2021

(Millions of yen)
ChangeChange (%)

Net sales

23,88729,949

6,061

25.4

Gross profit

5,585

7,239

1,654

29.6

Operating income

1,624

2,554

929

57.2

The major factors behind performance were as follows.
・ Sales increased for display materials and related to precision processing materials for semiconductors
・ Sales related to formulated epoxy resins increased, primarily for mobile devices and semiconductors
・ Sales related to photolithography materials increased with increased demand for displays
・ Operating income increased due to an increase in gross profit－ 3 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

Mobility(Millions of yen)Three-month
period ended June30, 2020

Three-month
period ended June30, 2021

Net sales

12,88923,225

10,33580.2

Gross profit

1,461

2,999

1,538

105.2

Operating income (loss)

(66)

994

1,061

-

ChangeChange (%)

The major factors behind performance were as follows.
・ In the resins business, sales increased domestically and overseas, primarily in ASEAN, due to recovery in automobile production, andprofitability increased thanks to rising market conditions
・ Sales increased in functional materials and functional components for interior and exterior fittings and electrification
・ Operating income increased due to an increase in gross profit
Life & Healthcare(Millions of yen)Three-month
period ended June30, 2020

Three-month
period ended June30, 2021

Net sales

37,08744,715

7,628

20.6

Gross profit

9,296

11,150

1,854

20.0

Operating income

1,394

2,713

1,318

94.6

ChangeChange (%)

The major factors behind performance were as follows.
・ Materials sales, manufacturing, and processing all trended strongly in the nutrition-related business・ Sales increased related to food materials, primarily TREHA™, and in cosmetics materials, primarily AA2G™, thanks to recovery indemand・ Sales increased for pharmaceutical raw materials and intermediates
・ Operating income increased due to an increase in gross profit
OthersNo special matters to disclose.

－ 4 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(2) Review of Financial Position(Millions of yen)

Prior Consolidated
Fiscal Year
(April 1, 2019 March 31, 2020)

First Quarter, Current
Consolidated
Fiscal Year
(June 30, 2021)

Current assets

401,751

424,152

22,4005.6

Non-current assets

238,835

238,801

(34)

(0.0)

Net assets

640,587

662,953

22,366

3.5

Liabilities

302,155

318,925

16,7695.5

Net assets

338,431344,028

5,596

1.7

51.5

50.4

(1.1) p-Shareholders’ equity ratio (%)

ChangeChange (%)

・ Current assets increased mainly due to an increase in inventories accounts receivable, despite a decrease in cash and deposits
・ Non-current assets decreased slightly mainly due to a decline in market value of investments in securities, despite an increase inintangible fixed assets
・ Liabilities increased mainly due to an increase in accounts payable and commercial paper・ Net assets increased due to the recording of quarterly profit attributable to owners of the parent and an increase in translation
adjustments, despite decreases from purchases of treasury stock and payments of dividends
・ As a result, the Company recorded a shareholders’ equity ratio of 50.4%, down 1.1 points compared to 51.5% from the end of the priorconsolidated fiscal year(3) Qualitative Information Related to Consolidated Earnings Forecasts
During the cumulative consolidated first quarter of the fiscal year ending March 2022, results greatly exceeded the initial outlook, mainly
due to improved profitability in the resins business thanks to rising resins market conditions, strong performance in the electronics-related
business mainly from increased demand for mobile devices and displays, and stronger performance at the Prinova Group versus plans amid
economic recovery in the U.S., in addition to the initially expected recovery of the automobile-related business. We expect this situation tocontinue through the second quarter and thereafter for the foreseeable future. On the other hand, the spread of COVID-19 variants
continues unabated, and with repeated declarations of states of emergencies in Japan and lockdown measures in ASEAN, uncertainty
remains amid initial outlooks for normalization in economic activities in the second half and thereafter. However, as vaccination efforts
advance worldwide, the risk of severe cases will be significantly reduced, and economic activity can therefore be expected to recover.
For the full-year earnings forecast, a slowdown is expected in the resins business due to softening in the resins market, and an increase in
expenses is expected due to resumption of economic activities. However, due to performance in the first quarter exceeding plans and an
upside in exchange rates versus initial forecasts, and because recovery can be expected in demand for food and souvenir products due torelaxation of activity restrictions, we expect each profit amount to exceed those in the full-year consolidated forecast we announced on May
11, 2021, and we have thusly revised our full-year earnings forecast upward.
Note that exchange rates use assumed foreign exchange rates of ¥109.5 to the U.S. dollar and ¥16.9 to the RMB, which are actual rates
during the current consolidated first quarter.

－ 5 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

a. Revision to full-year earnings forecast (April 1, 2021 - March 31, 2022)(Millions of yen)Previous Forecast (A)Revised Forecast (B)Gross profit

120,000

130,000

10,000

8.3

Operating income

23,00030,000

7,000

30.4

Ordinary income

24,00031,000

7,000

29.2

18,00022,500

4,500

25.0

Profit attributable toowners of the parent

Change (B-A)

Change (%)

b. Revised gross profit and operating income forecasts by segment (April 1, 2021 - March 31, 2022)
Gross profit by segment
Most-Recent Forecast (A)* Revised forecast (B)Functional Materials

Change (B-A)(Millions of yen)
Change (%)

16,50017,7001,200

7.3

27,00029,5002,500

9.3Electronics & Energy

25,50027,4001,900

7.5

Mobility

10,500

11,200700

6.7Life & Healthcare

40,00043,7003,700

9.3

Others & Corporate

500

500

-

-

120,000

130,000

10,0008.3

Advanced Materials &Processing

Total gross profit
Operating income by segment(Millions of yen)
Most-Recent Forecast (A)* Revised forecast (B)Functional Materials

Change (B-A)

Change (%)

5,700

6,600

900

15.8

7,200

9,600

2,400

33.3

Electronics & Energy

7,600

8,800

1,200

15.8

Mobility

3,000

3,400

400

13.3

Life & Healthcare

7,200

9,300

2,100

29.2

Others & Corporate(7,700)(7,700)

-

-

7,000

30.4

Advanced Materials &Processing

Total operating income
23,00030,000*Figures from FYE March 2021 Financial Briefing announced on May 28, 2021, P.18-19.

－ 6 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Prior Consolidated Fiscal Year
(March 31, 2021)
ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Less allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible fixed assets
Goodwill
Technology-based assets
Other
Total intangible fixed assets
Investments and other assets
Investments in securities
Retirement benefit asset
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－ 7 －(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2021)

49,254
242,558
88,1301,654
7,457
13,259(563)
401,751

44,237
254,343
99,651
1,965
8,478
16,346(871)
424,152

70,89671,42430,216
7,488
26,89364,59830,3507,094
28,196
65,641

93,719
2,929
1,903
4,900
(112)
103,340
238,835
640,587

91,122
2,981
1,819
5,924
(112)
101,735
238,801
662,953NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

Prior Consolidated Fiscal Year
(March 31, 2021)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial paper
Current portion of bonds
Accrued income taxes
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Deferred tax liabilities
Retirement 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
Net unrealized holding gain on securities
Deferred 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－ 8 －(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2021)

119,941
33,05012,025
8,000
3,565
6,042
203
23,310206,139

125,953
39,513
5,705
20,00010,000
3,228
3,043
84
24,582
232,11130,00034,514
16,077
13,292
2,131
96,016302,155

20,00036,015
15,196
13,453
2,147
86,813318,925

9,699
10,646
265,920(1,503)284,763

9,699
10,646
270,134(3,739)286,741

43,57672
1,006
268
44,924
8,743
338,431640,587

41,73755
5,716
197
47,707
9,579
344,028
662,953NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income(Quarterly Consolidated Statements of Income)Three-month periods ended June 30, 2021 and 2020

(Millions of yen)Three-month period ended
June 30, 2020
(April 1, 2020 - June 30, 2020)Three-month period ended
June 30, 2021
(April 1, 2021 - June 30, 2021)

134,649
108,590
26,05822,385
3,673

184,389
149,799
34,58924,851
9,738

40
385
66
325
155
974

41
576
71
531
91
1,312

254
96
59
410
4,237

290
4
95
390
10,660

0
5,597
5,597

2
571
178
752

12
7
14
1
36
9,798
2,888
6,909
101
6,807

155
242
3
130
531
10,881
3,207
7,674
504
7,169

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of non-current assets
Gain on sales of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sales of non-current assets
Loss on disposal of non-current assets
Impairment losses
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries and affiliates
Other
Total extraordinary losses
Income before income taxes
Income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent－ 9 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(Quarterly Consolidated Statements of Comprehensive Income)Three-month periods ended June 30, 2021 and 2020

(Millions of yen)Three-month period ended
June 30, 2020
(April 1, 2020 - June 30, 2020)Three-month period ended
June 30, 2021
(April 1, 2021 - June 30, 2021)

6,909

7,674

5,228
8
(428)
138

(1,840)
(16)
5,034
(70)

(5)

33

4,941
11,8503,140
10,814

11,785
64

9,978
835

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

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(3) Notes Related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.
(Significant Fluctuations in Shareholders’ Equity)
At a meeting held February 5, 2021, the Company’s board of directors resolved to acquire 1,340,200 shares of treasury stock forthe first quarter of the current consolidated fiscal year. As a result, treasury stock increased by ¥2,235 million, with treasury stock
holdings of ¥3,739 million as of the end of the consolidated first quarter.
(Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements)(Calculation of Tax Expenses)
Tax expenses are calculated by rationally estimating an effective tax rate after applying tax effect accounting to profit before
income taxes for the consolidated fiscal year, including the first quarter, and multiplying profit before income taxes for the firstquarter by the estimated effective tax rate.
In the event that the calculated tax expenses using this estimated effective tax rate lead to significantly unreasonable results, thisshall be calculated by multiplying the statutory effective tax rate after adjusting significant non-temporary differences by the profit
before income taxes.
Deferred income taxes are included in income tax.
(Change to Accounting Policy)(Change to Calculation Method of Tax Expenses)
While tax expenses had previously been calculated using principle-based methods, in order to rapidly and efficiently address thisin quarterly financial settlements, the method for calculating tax expenses for the Company and its domestic consolidated
subsidiaries have been changed to that listed in (Special Accounting Treatment Applied in the Preparation of Quarterly
Consolidated Financial Statements) from the first quarter of the current fiscal year.
Note that as impact from this change is minor, the change is not applied retroactively.
(Application of Accounting Standards for Revenue Recognition)
At the beginning of the first quarter of the current fiscal year, the Company adopted the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020). As a result, revenue is now recognized as the amount expected to bereceived in exchange for promised goods or services at the time of the transfer of their control to the customer.
As a result, in transactions for which the Company's performance obligations in its contracts with customers are determined to beservices as an agent arranging provision of goods or services by another party, the sales to customers previously recorded on agross basis shall be offset by the corresponding cost of sales, and revenue shall be stated on a net basis.
Since these changes in accounting methods shall be applied retroactively, consolidated financial statements for the same period in
the prior fiscal year and for the end of the prior fiscal year shall be presented with retroactive application.
As a result, net sales and cost of sales each were reduced by ¥45,920 million in the first quarter of the prior consolidated fiscal yearand ¥58,523 million in the first quarter of the current consolidated fiscal year. Note that this change has no impact on any stage of
profits below gross profit for either of the aforementioned periods, nor on the amount of net assets.
(Application of Accounting Standard for Fair Value Measurement)
As of the beginning of the first quarter of the current fiscal year, the Company has applied the Accounting Standard for Fair Value
Measurement (ASBJ Statement No. 30, July 4, 2019). In accordance with the transitional treatment prescribed in Paragraph 19 of
the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of Accounting Standard for Financial Instruments(ASBJ Statement No. 10, July 4, 2019), new accounting policies prescribed by the Accounting Standard for Fair Value
Measurement have been adopted prospectively.
There is no effect by this change on the consolidated financial statements.

－ 11 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(Additional Information)(Application of Tax Effect Accounting for Transition from Consolidated Taxation System to Group Tax Sharing System)
The Company and certain domestic consolidated subsidiaries have calculated the amounts of deferred tax assets and deferred tax
liabilities in accordance with the provisions of tax laws in Japan prior to the amendments based on the treatments stipulated in
Paragraph 3 of Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation
System to the Group Tax Sharing System (Accounting Standards Board of Japan (ASBJ) Practical Issues Task Force No. 39,
March 31, 2020) instead of applying the provision of Paragraph 44 of Implementation Guidance on Tax Effect Accounting (ASBJ
Guidance No. 28, February 16, 2018), regarding the transition to group tax sharing system provided for in Act for Partial
Amendment of the Income Tax Act, etc. (Act No. 8 of 2020), and items for which the non-consolidated taxation system has beenreviewed in line with the transition to the group tax sharing system.
(Effects of COVID-19 When Making Accounting Estimates)
There are no significant changes to the assumption of estimates related to the impact of COVID-19 stated in Additional
Information of the securities report for the fiscal year ended March 31, 2021.

－ 12 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(Segment Information, etc.)
Segment Information
I Three-month period ended June 30, 2020 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

Corporate Adjustments Consolidated(Note) 2(Note) 3(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

16,504

44,17523,887

12,88937,087

134,544104

134,649--

134,649

105

382

256

332

83

1,160

1,394

2,555

-

(2,555)-

Total

16,61044,557

24,143

13,222

37,171

135,705

1,499

137,205-(2,555)

134,649

Segment income(loss)

874

1,461

1,624

(66)

1,394

5,288

100

5,388

(1,836)

121

3,673

(Note) 1. “Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.
2．Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
3.

Adjustments are eliminations of intersegment transactions.

4.

The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

II Three-month period ended June 30, 2021 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

Corporate Adjustments Consolidated(Note) 2(Note) 3(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

24,634

61,79929,94923,22544,715

184,32464

184,389--

184,389

137

171

520

643

98

1,571

854

2,426

-

(2,426)-

Total

24,771

61,97130,46923,86944,814

185,896918

186,815-(2,426)

184,389

Segment income(loss)

1,981

3,299

2,554

994

2,713

11,543

8

11,551(1,948)

134

9,738

(Note) 1. “Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.
2．Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
3.
4.

Adjustments are eliminations of intersegment transactions.
The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

－ 13 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

2. Matters Related to Changes in Reportable Segments(Change in Business Segments)
From the first quarter of the current consolidated fiscal year, the Electronics Segment has been renamed to the Electronics &Energy Segment, and the Mobility & Energy Segment has been renamed to the Mobility Segment, with changes to businesssegmentation as follows.
For the purpose of promoting development of new businesses, the Energy Business Office previously classified under the
Mobility & Energy Segment, as well as the Advanced Information and Communications Project Team previously classified under
the Others/Corporate category, have been unified in the newly established Information and Communication・Energy Office,classified under the Electronics & Energy Segment. In addition, for the purpose of expanding market share and improving
synergies, the fluorine business in the Specialty Chemicals Division, which was previously classified under the Functional
Materials Segment, has been moved to the Electronics & Energy Segment.
Segment information provided for the first quarter of the previous consolidated fiscal year is based on post-change classification
methods.
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, and adhesives, urethane materials andauxiliary materials, plastic materials, plastic additives, industrial oil solutions, water processing raw materials, surfactant raw
materials, fluorochemicals, encapsulant materials, 5G materials, silicone materials, environmental solutions and environmentrelated commercial products, sintered metal filters, and more for the paints/inks, resins, urethane foam, organic synthesis,
surfactants, electronics chemicals, communications equipment, water processing, metal processing, plastic and film processing,and other industries.
The Advanced Materials & Processing Segment is engaged in the sales of dyestuffs, pigments, functional pigments, digital print
processing products, thermoplastic resins, thermosetting resins, automobile refinish paints, conductive coatings, synthetic rubber,
inorganic materials, plastics products, resin molding tools/dies, and more for the dye/additive, digital print processing material,
fiber processing, raw resin material, resin molding, functional film and sheet, appliance and office automation device, electronics,
packaging material, construction material, and other industries.
The Electronics & Energy Segment is engaged in the sales of formulated epoxy resins, fluorine products, precision abrasives,semiconductor assembly materials and devices, adhesives and encapsulant materials, display panel components and devices,chemical management equipment for display manufacturing processes, low-temperature/vacuum equipment, LEDs, 3D printing
products, design and manufacture of storage battery systems, solar panels, optical wireless communication equipment, and otherproducts for the semiconductor, electronic component, AR/VR, environmental energy, 3D printing, heavy electrical and lightelectrical, HDD, automotive and aircraft, display, touch panel, housing, lighting, storage battery, energy, renewable energy,
security device, large-scale commercial facility, and other industries. Its main services include energy management system
proposals and battery assessments.
The Mobility Segment is engaged in the sales of plastic products in general, materials for secondary batteries, interior andexterior materials and components, materials for functional components, products for electrification, sensor components, invehicle electronics products, in-vehicle display-related components, self-driving-related products, and other products for theoverall mobility industry and related industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials, research products,
in vitro diagnostics, enzymes, food additives, food ingredients, sports nutrition products, nutrient premixes, additives forcosmetics, feeds, and surfactants for the pharmaceutical, food and beverage, cosmetics, agricultural, toiletries, and health careindustries. The segment offers radiation measurement as one of its main services. In addition, this segment sells cosmetics, healthfoods, and beauty foods directly to consumers.

－ 14 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2022

(Application of Accounting Standards for Revenue Recognition)
As described in (Change to Accounting Policy), at the beginning of the first consolidated quarter for the current fiscal year, theCompany adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), changing its
accounting method for revenue recognition. As a result, measurement methods have similarly been changed for business segment
profit and loss.
Segment information provided for the first quarter of the previous consolidated fiscal year is based on the changed profit or loss
measurement method.

－ 15 －