Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2022
<Under Japanese GAAP>
November 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): November 12, 2021
Start of distribution of dividends (scheduled): December 6, 2021
Supplementary documents of quarterly financial results: Yes
Quarterly investors' meeting: Yes (for analysts and institutional investors)(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Second Quarter of the Fiscal Year Ending March 31, 2022
(April 1, 2021 to September 30, 2021)(1) Consolidated Operating Results
Net sales

Gross profit

Operating income(% = year-on-year change)
Profit attributable toOrdinary income

owners of the parent

For the second quarter ended

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

September 30, 2021
September 30, 2020

373,762
286,376

30.5

68,73453,78227.8
5.7

19,4998,934

118.2(15.9)

20,467
9,692

111.2
(8.4)

14,622
10,18743.5
37.2(Notes) 1. Comprehensive income－

Second quarter ended September 30, 2021: ¥17,849 million (11.6% decrease)
Second quarter ended September 30, 2020: ¥20,194 million (306.5%)

2. At the beginning of the first quarter of the fiscal year ending March 2022, the Company adopted the Accounting Standard
for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020). Results forthe second quarter of the fiscal year ended March 2021 reflect a retroactive application of this accounting standard. As aresult, net sales affected by this retroactive application do not show the year-on-year rate of change in the second quarterof the fiscal year ended March 2021.
Earnings per share
For the second quarter ended
September 30, 2021
September 30, 2020

Earnings per share (diluted)
Yen

Yen

119.5782.15

(2) Consolidated Financial Position
Total assets
September 30, 2021
March 31, 2021
(Reference) Equity capital

Net assets

Shareholders’equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

678,698
640,587349,709338,43150.1
51.5

2,798.62
2,670.09

As of September 30, 2021: ¥ 339,724 million
As of March 31, 2021:¥ 329,687 million

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

Annual

Yen

Yen

Yen

Yen

22.00
24.00



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
Full fiscal year
(Note)

Operating income

Profit attributable toowners of the parent

Ordinary income

Earnings per
share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

130,000

13.4

30,00036.9

31,00035.6

22,50019.5

185.11

1. Revisions to the latest consolidated earnings forecast: No
2. For details, please refer to 1. Qualitative Information, (3) Qualitative Information Related to Consolidated Earnings
Forecasts, on P.5 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 Statements and Notes, (4) Notes Related to Quarterly
Consolidated Financial Statements (Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated
Financial Statements), on P.11 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 Statements and Notes (4) Notes Related to Quarterly Consolidated
Financial Statements (Change in Accounting Policy), on P.11 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)
September 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
September 30, 2021
3,018,081 shares

March 31, 2021

Average number of shares during the period
September 30, 2021
122,298,419 shares

September 30, 2020

933,995 shares

124,011,496 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 to Consolidated
Earnings Forecasts, on P.5 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second 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
2． Quarterly Consolidated Financial Statements and Notes

56(1) Quarterly Consolidated Balance Sheets

6(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

8

Quarterly Consolidated Statements of Income
Six-month periods ended September 30, 2020 and 2021

8

Quarterly Consolidated Statements of Comprehensive Income
Six-month periods ended September 30, 2020 and 2021

9(3) Quarterly Consolidated Statements of Cash Flows

10(4) 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 in Accounting Policy)

11(Additional Information)

12(Segment Information, etc.)

13

- 1 -

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

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

General Summary of Results

During the cumulative consolidated second quarter of the current fiscal year, the global economy saw a growing number ofregions in which economic activities recovered, despite some regional variances, due to the progress in COVID-19
vaccinations. In Japan, even though vaccinations have progressed significantly and efforts were made to prevent the spread of
infections, including barring spectators from viewing Olympics competitions, the number of infected people did not decreasesignificantly. Demand from the tourism, travel, and food and beverage industries remained sluggish due to restrictions on
activities caused by the ongoing declaration of a state of emergency.
In terms of the regions in which the NAGASE Group operates, we saw varied degrees of recovery by region. Economic
activity in Greater China continued to be strong, supported by firm demand. While there are expectations for an economic
recovery in the Americas and Europe due to the lifting of restrictions, infections spread again in ASEAN, and restrictions weretightened in some countries. Japan experienced a temporary sharp increase in the number of COVID-19 infections, but the
number has decreased significantly and economic activities are expected to recover. As yet, the outlook remains uncertain due
to the reemergence of infections caused by COVID-19 mutations, the impact on the supply and demand of semiconductors andraw materials due to the disruption of international supply chains, and fears of softening in the soaring raw materials market.
In this environment, earnings for the cumulative consolidated second quarter of the current fiscal year are as follows.
(Millions of yen)Six-month period
Six-month period
ended September
ended September
ChangeChange (%)
30, 2020
30, 2021
Net sales

286,376

373,762

87,38530.5

Gross profit

53,782

68,734

14,951

27.8

Operating income

8,934

19,49910,564

118.2

Ordinary income

9,692

20,467

10,774

111.2

Profit before income taxes
Profit attributable to owners

15,17921,276

6,097

40.2

10,187

14,622

4,435

43.5

of 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 cumulative consolidated second
quarter of the previous fiscal year reflect a retroactive application of this accounting standard.
・ For performance in the cumulative consolidated second quarter of the current fiscal year, higher profit in all segments
resulted in all stages of profit below gross profit reaching record highs for the second quarter.
・ Factors behind the higher profits were the recovery of the automobile-related business, the continued strong performance ofthe electronics-related business and resins business from the second half of the prior consolidated fiscal year, andperformance 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 ¥14.6 billion, up ¥4.4 billion mainly due to a reactionary bounce
from recording profits stemming from the sales of certain shares owned by the Company during the cumulative
consolidated second quarter of the previous fiscal year, despite an increase in ordinary income of ¥10.7 billion.

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

b. 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 cumulative consolidated second quarter of the previous
fiscal year are calculated after rearranging reportable segment classifications to match those of the cumulative consolidated
second quarter of the current fiscal year.
Functional Materials(Millions of yen)Six-month period
ended September
30, 2020

Six-month period
ended September
30, 2021

Net sales

33,60049,18915,58846.4

Gross profit

7,131

9,549

2,418

33.9

Operating income

1,945

3,874

1,928

99.1

ChangeChange (%)

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 and plastic 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(Millions of yen)Six-month period
ended September
30, 2020

Six-month period
ended September
30, 2021

Net sales

96,077

125,628

29,55130.8

Gross profit

12,832

16,476

3,643

28.4

Operating income

3,476

6,486

3,009

86.6

ChangeChange (%)

The major factors behind performance were as follows.
・ Sales increased for resins in 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 resins for industrial and packaging applications, as well as dyes and additives, due to recovery indemand・ Sales decreased for digital print processing materials and conductive materials
・ Operating income increased due to an increase in gross profit- 3 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2022

Electronics & Energy(Millions of yen)Six-month period
ended September
30, 2020

Six-month period
ended September
30, 2021

Net sales

50,126

62,122

11,99523.9

Gross profit

11,432

14,767

3,334

29.2

Operating income

3,316

5,461

2,144

64.7

ChangeChange (%)

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
Mobility(Millions of yen)Six-month period
ended September
30, 2020

Six-month period
ended September
30, 2021

Net sales

32,233

46,843

14,61045.3

Gross profit

3,524

5,992

2,468

70.0

319

2,002

1,683

527.2

Operating income

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, and profitability increased owing 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)Six-month period
ended September
30, 2020

Six-month period
ended September
30, 2021

Net sales

74,13189,857

15,72621.2

Gross profit

18,726

21,834

3,107

16.6

ChangeChange (%)

Operating income
3,020
5,070
2,050
67.9
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™, owing torecovery in demand
・ 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 Second Quarter of the Fiscal Year Ending March 31, 2022

(2) Review of Financial Positiona. Assets, Liabilities and Net Assets(Millions of yen)
Prior Consolidated
Fiscal Year
(April 1, 2020 March 31, 2021)

Second Quarter,
Current Consolidated
Fiscal Year
(September 30, 2021)

Current assets

401,751

441,581

39,8299.9

Non-current assets

238,835

237,117(1,718)(0.7)

Total assets

640,587

678,698

38,111

5.9

Liabilities

302,155

328,989

26,833

8.9

Net assets

338,431349,709

11,278

3.3

51.5

50.1

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

ChangeChange (%)

・ Current assets increased mainly due to an increase in inventories accounts receivable, despite a decrease in cash anddeposits
・ Non-current assets decreased slightly mainly due to a decline in market value of investments in securities, despite anincrease in intangible fixed assets
・ Liabilities increased mainly due to an increase in short-term loans and commercial paper・ Net assets increased due to the recording of quarterly profit attributable to owners of the parent and an increase intranslation adjustments, despite decreases from purchases of treasury stock and payments of dividends
・ As a result, the Company recorded a shareholders’ equity ratio of 50.1%, down 1.4 points compared to 51.5% from the endof the prior consolidated fiscal year

b. Consolidated Cash Flows(Millions of yen)Six-month period ended
September 30, 2020

Six-month period ended
September 30, 2021

Cash flows from operating activities

13,245(13,625)

Cash flows from investing activities(2,598)(4,947)

Cash flows from financing activities(23,632)

14,417

・Net cash used in operating activities was mainly due to a ¥32.7 billion decrease in cash stemming from an increase inworking capital, offset in part by ¥ 21.2 billion in income before income taxes
・Net cash used in investing activities was mainly due to ¥4.7 billion in purchases of property, plant and equipment andpayments of ¥1.3 billion for leasehold and guarantee deposits, offset in part by ¥1.6 billion in proceeds from sales ofinvestments in securities
・Net cash provided by financing activities was mainly due to a net increase of ¥16.7 billion in short-term loans and a netincrease of ¥10.0 billion in commercial paper, offset in part by ¥6.9 billion in repayments of long-term loans and ¥3.5 billion
in purchases of treasury stock(3) Qualitative Information Related to Consolidated Earnings Forecasts
As described in (1) Review of Business Performance, during the cumulative consolidated second quarter, businessperformance was strong across all segments, particularly in the Advanced Materials & Processing Segment and Electronics& Energy Segment. In terms of business environment for the second half of the year and beyond, despite an expected
recovery in demand for food and souvenir products due to the easing of restrictions in activities, we project a slowdown in
our resins business due to softening market conditions, a decrease in demand for electronic devices and display-related
products due to the end of a cycle of stay-at-home demand, and an increase in business expenditures due to a recovery ineconomic activity. Also, in light of ongoing uncertainty regarding automobile production volume and semiconductor supply,
we have decided to leave our full-year consolidated earnings forecast, announced on August 4, 2021, unchanged.

- 5 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second 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

6(Millions of yen)
Second Quarter, Current
Consolidated Fiscal Year
(September 30, 2021)

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

45,689260,714
110,460
1,983
9,453
14,111(832)
441,581

70,89670,88630,216
7,488
26,89364,59830,2236,700
28,08965,01393,719
2,929
1,903
4,900
(112)
103,340
238,835
640,587

90,429
3,205
1,783
5,911
(112)
101,217
237,117678,698

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second 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

7(Millions of yen)
Second Quarter, Current
Consolidated Fiscal Year
(September 30, 2021)

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

127,147
50,5605,531
18,00010,000
4,748
5,552
172
21,440243,154

30,00034,514
16,077
13,292
2,131
96,016302,155

20,00036,06314,363
13,466
1,942
85,834
328,989

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

9,699
10,639277,587(5,046)
292,879

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

40,98852
5,674
128
46,844
9,985
349,709678,698

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second 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)Six-month periods ended September 30, 2021 and 2020
(Millions of yen)Six-month period ended
September 30, 2020

Six-month period ended
September 30, 2021

(April 1, 2020 - September 30, 2020) (April 1, 2021 - September 30, 2021)

Net sales
Cost of sales
Gross profit
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
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 sales of investment securities
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

8286,376
232,594
53,782
44,847
8,934

373,762305,027
68,734
49,234
19,499

67
591
133
－
570
280
1,643

76
725
139
12
524
248
1,727

481
225
178
885
9,692

565
－
194
760
20,467

27
5,597
－
5,624

11
1,457
271
1,740

7
34
38
10
44
1
－
138
15,1794,655
10,523336
10,187

173
359
－
－
173
59
163
930
21,276
5,776
15,500877
14,622

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

(Quarterly Consolidated Statements of Comprehensive Income)Six-month periods ended September 30, 2021 and 2020
(Millions of yen)Six-month period ended
September 30, 2020

Six-month period ended
September 30, 2021

(April 1, 2020 - September 30, 2020) (April 1, 2021 - September 30, 2021)

Profit for the period
Other comprehensive income
Net unrealized holding gain (loss) on securities
Deferred 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

910,523

15,50010,914(14)(1,470)276(2,588)
(19)
5,040
(139)

(35)

56

9,670
20,194

2,349
17,84919,868325

16,5681,280

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

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)Six-month period ended
September 30, 2020

Six-month period ended
September 30, 2021

(April 1, 2020 - September 30, 2020) (April 1, 2021 - September 30, 2021)

Operating activities
Income before income taxes
Depreciation and amortization other than amortization of
goodwill
Loss on impairment of fixed assets
Amortization of goodwill
Increase in retirement benefit liability
Increase in retirement benefit asset
Interest and dividend income
Interest expenses
Exchange loss (gain), net
Gain on sales of investment securities, investments incapital, shares of subsidiaries and affiliates, andinvestments in capital of subsidiaries and affiliates, net
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories(Decrease) increase in notes and accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible fixed assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Purchases of investments in capital
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Decrease (increase) on short-term loans receivable
included in other current assets
Decrease (increase) in time deposits, net
Payments of leasehold and guarantee deposits
Other
Net cash used in investing activities
Financing activities(Decrease) increase in short-term loans, net(Decrease) increase in commercial paper, net
Proceeds from long-term loans
Repayments of long-term loans
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other
Net cash (used in) provided by financing activities
Effects of exchange rate changes on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the period- 10 -

15,17921,276

5,326

5,598

38
1,277
687
(429)
(658)
481
122

－
1,243
77
(435)
(802)
565
(259)

(5,584)(1,398)

11,697359(9,837)(515)
18,144959(514)(5,344)
13,245(16,541)(22,765)
6,507(2,406)(9,339)894(588)(4,591)(13,625)(5,148)42(438)(3,044)
5,746(52)(4,778)
304
(657)
(741)
1,613
－

－

587

266

(14)

121
－
(90)
(2,598)(251)(1,352)342(4,947)(3,889)(20,000)
4,383(1,003)(0)(2,728)(290)(104)(23,632)

16,727
10,0001,900(6,931)(3,543)(2,963)(543)(228)
14,417(461)

352(13,447)
50,47137,023(3,803)48,55344,749

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

(4) Notes Related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.
(Significant Fluctuations in Shareholders’ Equity)
Following a resolution by the Company’s board of directors at a meeting held February 5, 2021, the Company acquired
2,084,000 shares of treasury stock in the cumulative consolidated second quarter of the current fiscal year. As a result, treasury
stock increased by ¥3,543 million, with treasury stock holdings of ¥5,046 million as of the end of the consolidated second
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 current second quarter, and multiplying profit before income taxes
for the second quarter 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,
this shall 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 taxes.
(Change in Accounting Policy)(Change in Calculation Method of Tax Expenses)
While tax expenses had previously been calculated using principle-based methods, in order to rapidly and efficiently address
this in 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 consolidated 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 consolidated 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 be received 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
be services as an agent arranging provision of goods or services by another party, the sales to customers previously recorded ona gross 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 as a rule, consolidated financial statements for thesame 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 ¥94,777 million in the cumulative consolidated second quarter ofthe previous fiscal year and ¥117,124 million in the cumulative consolidated second quarter of the current 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 theamount of net assets.
(Application of Accounting Standard for Fair Value Measurement)
As of the beginning of the consolidated first quarter of the current fiscal year, the Company has applied the AccountingStandard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019). In accordance with the transitional treatmentprescribed in Paragraph 19 of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of AccountingStandard 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 Second 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 (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 been reviewed in linewith the transition to the group tax sharing system.
(Effects of COVID-19 Pandemic 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 Second Quarter of the Fiscal Year Ending March 31, 2022

(Segment Information, etc.)
Segment Information
I Six-month period ended September 30, 2020 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
FunctionalLife &
Electronics &Materials &Mobility
Materials
Healthcare
EnergyProcessing

Total

Others(Note) 1

Total

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

Net sales
Sales tocustomers

33,60096,07750,12632,23374,131

286,169207

286,376－－

286,376

Intersegment
sales/transfers

195

737

515

706

161

2,316

3,210

5,526

－

(5,526)－

Total

33,796

96,81550,641

32,93974,292

288,485

3,417

291,902－(5,526)286,376

Segment income(loss)

1,945

3,476

3,316

319

3,020

12,078242

12,320(3,634)

247

8,934

(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 Six-month period ended September 30, 2021 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
FunctionalLife &
Electronics &Materials &Mobility
Materials
Healthcare
EnergyProcessing

Total

Others(Note) 1

Total

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

Net sales
Sales tocustomers

49,189125,628

62,122

46,84389,857

373,641

121

373,762－－

373,762Intersegment
sales/transfers

307

361

1,093

1,147

214

3,123

2,015

5,139

－

(5,139)－Total

49,496125,990

63,21547,99090,071

376,765

2,136

378,901－(5,139)373,762

Segment income(loss)

3,874

6,486

5,461

2,002

5,070

22,89474

22,969(3,691)

221

19,499(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”.

-13-

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

2．Matters Related to Changes in Reportable Segments(Change in Business Segments)
From the consolidated first quarter of the current 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 andimproving 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 cumulative consolidated second quarter of the previous fiscal year is based on postchange 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 sale 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,
health foods, and beauty foods directly to consumers.

-14-

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

(Application of Accounting Standards for Revenue Recognition)
As described in (Change in 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 businesssegment profit and loss.
Segment information provided for the cumulative consolidated second quarter of the previous fiscal year is based on thechanged profit or loss measurement method.

-15-