Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017
<Under Japanese GAAP>
August 4, 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
Filing of quarterly report (scheduled): August 9, 2016
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, 2017
(April 1, 2016 to June 30, 2016)(Percentages represent changes compared with same period of the previous fiscal year.)(1) Consolidated Operating Results
Net sales

Operating income

Profit attributable toowners of the parent

Ordinary income

For the first quarter ended
Millions of yen% Millions of yen% Millions of yen%
June 30, 2016
173,394(6.3)
3,525 (28.9)
3,904 (26.7)
June 30, 2015
185,147
2.1
4,958
11.9
5,324
4.6
(Notes) Comprehensive income
First quarter ended June 30, 2016: (¥5,342) million (―%)

Millions of yen

%

2,236
3,400

(34.2)(3.2)

First quarter ended June 30, 2015: ¥5,123 million (24% decrease)
Earnings per share
For the first quarter ended
June 30, 2016
June 30, 2015

Yen
17.61
26.77

Earnings per share (diluted)
Yen−−(2) Consolidated Financial Position
Total assets

June 30, 2016
March 31, 2016
(Reference) Equity capital

Shareholders’equity ratio

Net assets

Net assets per share

Millions of yen

Millions of yen%

Yen

493,718
512,081271,516
279,14954.1
53.5

2,102.18
2,156.67

As of June 30, 2016: ¥267,041million
As of March 31, 2016: ¥273,963 million

2. Dividends
1Q
For the year ended (or ending)
Yen
March 2016−
March 2017−
March 2017 (estimate)(Note) Revisions to the latest projected dividends: No

2Q

Annual Dividends per Share
3Q
Fiscal year end

Annual

Yen

Yen

Yen

Yen

16.00

−

16.00

32.00

16.00

−

16.00

32.00

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2017
(April 1, 2016 to March 31, 2017)(Percentages represent changes compared with the corresponding periods of the previous fiscal year.)Net sales
Millions of yen

Full fiscal year

735,000

Operating income% Millions of yen(1.0)

Profit attributable toowners of the parent

Ordinary income% Millions of yen

14,500 (19.6)% Millions of yen

16,000 (13.0)

Earnings per
share

%

Yen

9,500 (22.9)

74.78(Note) Revisions to the latest projected consolidated results: No* 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: No(3) 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(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, 2016
127,408,285 shares March 31,2016
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
June 30, 2016
377,392 shares

March 31, 2016

Average number of shares during the period
June 30, 2016
127,030,962 shares

June 30, 2015

377,300 shares

127,031,790 shares* Quarterly Review Implementation DisclosureThis quarterly report is exempt from the quarterly review procedure based upon the Financial Instruments and ExchangeAct. Furthermore, quarterly consolidated financial statements were undergoing the review procedure process at the timeof release.
* 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. Qualitative Information (3) Qualitative Information related to Earnings Forecasts” on page 4 of thisdocument.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

Attachments
1. Qualitative Information

2(1) Business Performance2(2) Financial Position

3(3) Qualitative Information related to Earnings Forecasts

4

2. Summary Information (Notes)

4(1) Changes in significant subsidiaries during the period

4(2) Application of Special Accounting Methods to the Preparation of Quarterly Financial Statements

4(3) Changes in accounting policies, estimates and restatements

4(4) Additional Information

4

3. Quarterly Consolidated Financial Statements

5(1) Quarterly Consolidated Balance Sheets

5(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

7

Quarterly Consolidated Statements of Income

7

Quarterly Consolidated Statements of Comprehensive Income

8(3) Notes related to Quarterly Consolidated Financial Statements

9(Assumption for Going Concern)

9(Segment Information, etc.)9(Significant Fluctuations in Shareholders’ Equity)9(Significant Subsequent Events)

9

4. Supplementary Information

10(1) Overseas Sales

10

- 1 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

1. Qualitative Information(1) Business Performancea. General Summary of Results
Japanese corporate earnings, mainly in non-manufacturing sectors, remained steady throughout the first quarter of theconsolidated fiscal year. At the same time, Japan’s employment environment continued to improve. However, the combinationof a strong yen and low stock prices since the beginning of the year have raised the risk of a downturn in the Japanese economy
arising from weakening corporate earnings. As China and the emerging economies continue to experience slowing growth,
uncertainty as to the overall direction of the global economy has increased with the worldwide impact of the British exit fromthe EU, the U.S. presidential election, and other factors.
In this environment, the Company recorded domestic sales of ¥88.91 billion for the consolidated first quarter, which
represented a 1.3% decrease year on year. Overseas sales, impacted by a comparatively stronger yen, amounted to ¥84.48
billion (11.2% decrease). In total, the Company recorded ¥173.39 billion in net sales, a 6.3% decrease.
The Company recorded gross profit of ¥22.56 billion (4.1% decrease) in conjunction with lower revenues. Operating income
amounted to ¥3.52 billion, a decrease of 28.9%. This decrease was mainly due to increase in retirement benefit expenses inconnection with amortization of actuarial losses. Ordinary income amounted to ¥3.9 billion (26.7% decrease). Profit
attributable to owners of the parent amounted to ¥2.23 billion (34.2% decrease), mainly due to the recording of losses on saleof subsidiaries and affiliates.

b. Segment Summary
Functional Materials
The Functional Materials segment recorded lower sales in both domestic and overseas markets.
The performance chemicals business recorded lower net sales despite a slight recovery in demand for coatings for building andconstruction materials. The primary factor behind this result was a decrease in sales of coating raw materials and urethanematerials due to weakness in domestic automotive production volume.
The speciality chemicals business also recorded lower net sales. While sales of chemicals for industrial lubricants andsemiconductor-related products to the electronics industry were strong, sales of raw materials for plastics and other businessoverseas were comparatively sluggish.
As a result, the segment recorded net sales of ¥37.09 billion, representing a ¥3.34 billion (8.3%) decrease. Operating income
for the segment was ¥860 million, representing a ¥240 million (21.9%) decrease. This decrease was mainly due to lower net
sales and expenses incurred in relocating a domestic affiliated company.

Advanced Materials & Processing
The Advanced Materials & Processing segment reported lower sales in both domestic and overseas markets.
The colors and imaging business recorded lower net sales overall, despite increased sales of plastic resins for packaging
applications. Sales of materials for LCD TV reflectors, conductive materials, dyes/additives, information printing materials,
and anti-reflective optical sheets were down for the period.
The segment's business selling plastics and other products to the office equipment, appliance and video game device markets
recorded lower net sales. While sales edged lower domestically, product unit price declines in connection with naphtha prices
had a significant negative impact on sales in Greater China and ASEAN.
As a result, the segment recorded net sales of ¥58.69 billion, representing a ¥6.28 billion (9.7%) decrease. Operating income
for the segment was ¥1.2 billion, representing a ¥130 million (9.8%) decrease.

- 2 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

Electronics
The Electronics segment recorded net sales level with the same period in the prior fiscal year. Overseas sales were lower, while
the segment posted higher revenues in Japan.
The electronic chemicals business recorded increased sales for the period, driven by higher formulated epoxy resin sales to theheavy electric and semiconductor industries.
The electronic materials business recorded lower sales. While sales for smartphone components were higher, sales of materials
for touch panels and thin glass processing were lower.
As a result, the segment recorded net sales of ¥29.88 billion, representing a ¥10 million (0.0%) decrease. Operating income forthe segment was ¥1.48 billion, representing a ¥40 million (3.0%) decrease. This decrease was mainly due to lower operating
rates at overseas manufacturing businesses.

Automotive & Energy
The automobile-related business recorded lower net sales in total. Sales were down slightly in Japan due to decreased
automotive production domestically. While sales improved favorably overseas in the Americas and ASEAN, sales in China
were lower due to decreased automotive production in that country.
As a result, the segment recorded net sales of ¥26.22 billion, representing a ¥2.45 billion (8.6%) decrease year on year.
Operating income amounted to ¥270 million, ¥280 million (51.3%) lower than the same period in the prior fiscal year. Thisdecrease was mainly due to the fact that costs incurred to launch a new business in Japan during the prior year extended into
the first quarter of the current fiscal year.

Life & Healthcare
The Life & Healthcare segment recorded net sales level with the same period in the prior fiscal year. While sales rose
domestically, revenues from Greater China and other overseas regions were lower.
The life & healthcare products business recorded lower sales of TREHA™ and other products to the food materials industry,
while sales of enzyme products increased. Although the business recorded lower sales of AA2G™ to the skin care andtoiletries field, sales from raw materials sales to the same field grew year on year. In the medical and pharmaceutical fields,
sales of raw materials and intermediates grew, while sales of medical materials were lower. As a result, the business reported
lower net sales for the period.
The beauty care products business, which includes sales of cosmetics and health foods, recorded an increase in net sales. While
net sales for existing products were level with the same period in the prior fiscal year, new products experienced sales growth.
As a result, net sales for the segment amounted to ¥21.32 billion, which was a ¥350 million (1.7%) increase. Operating income
increased ¥270 million (28.0%) year on year to ¥1.25 billion. This increase was mainly due to improvements in domestic
business profit ratios.

Other
No special matters to disclose.

(2) Financial Position
As of the end of the consolidated first quarter, current assets amounted to ¥300.43 billion. This represents a decrease of ¥11.89
billion compared to the end of the prior consolidated fiscal year, mainly due to decreases in cash, time deposits, notes andaccounts receivable. Non-current assets amounted to ¥193.28 billion, down ¥6.46 billion. This result was mainly due adecrease in investments in securities resulting from a decline in fair values and the sale of affiliates. As a result, total assets
decreased by ¥18.36 billion, down to ¥493.71 billion as of the end of the consolidated first quarter.

- 3 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

Liabilities amounted to ¥222.2 billion, ¥10.73 billion decrease compared to the end of the prior consolidated fiscal year, mainly
due to decreases in accrued income taxes.
Net assets amounted to ¥271.51 billion, down ¥7.63 billion. This decrease was mainly due to decreases in translation
adjustments and net unrealized holding gain on securities, despite the Company recording profit attributable to owners of theparent in the amount of ¥2.23 billion.
As a result, the Company reported a shareholders’ equity ratio of 54.1%, up 0.6 points compared to the end of the priorconsolidated fiscal year.

(3) Qualitative Information related to Earnings Forecasts
The Company has made no changes its full-year consolidated earnings forecasts as originally published on May 6, 2016.

2. Summary Information (Notes)(1) Changes in significant subsidiaries during the period
No matters to report.

(2) Application of Special Accounting Methods to the Preparation of Quarterly Financial Statements
No matters to report.

(3) Changes in accounting policies, estimates and restatements
No matters to report.

(4) Additional Information(Application of Implementation Guidance on Recoverability of Deferred Tax Assets)
The Company has adopted Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26;
March 28, 2016), effective the first quarter of the current consolidated fiscal year.

- 4 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets

Prior Consolidated Fiscal Year
(March 31, 2016)
ASSETS
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
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- 5 -(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2016)

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

37,390
193,301
55,238
1,665
3,791
2,015
8,022
(989)
300,435

66,47467,88024,582
15,366
4,567
44,51624,138
14,972
4,518
43,63081,345
1,023
1,544
5,017
(174)
88,755
199,747
512,081

75,417
605
1,376
4,544
(170)
81,773
193,283
493,718

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

Prior Consolidated Fiscal Year
(March 31, 2016)
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- 6 -(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2016)

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

96,00623,916
8,584
10,000
1,191
24
2,176
52
15,506
157,458

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

20,00022,201
7,172
14,112
1,256
64,743
222,202

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

9,699
11,604
213,765(230)
234,839

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

34,771
16(953)(1,631)
32,202
4,475
271,516
493,718

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income(Quarterly Consolidated Statements of Income)Three-month periods ended June 30, 2016 and 2015
(Millions of yen)Three-month period ended June30, 2015(April 1, 2015 - June 30, 2015)

Three-month period ended June30, 2016(April 1, 2016 - June 30, 2016)

185,147
161,619
23,527
18,568
4,958

173,394
150,829
22,564
19,039
3,525

62
623
74
115
876

51
729
78
129
988

255
8
61
185
510
5,324

228
85
192
102
609
3,904

1
36
38

15
60
75

0
31
9
9
50
5,312
1,046
692
1,739
3,573
172
3,400

10
49
10
24
151
257
57
560
3,418
690
450
1,141
2,277
41
2,236

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
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
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on disposal of non-current assets
Impairment loss
Loss on sale of investments securities
Loss on valuation of investments securities
Loss on sales of shares of subsidiaries and affiliates
Other
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent- 7 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

(Quarterly Consolidated Statements of Comprehensive Income)Three-month periods ended June 30, 2016 and 2015
(Millions of yen)Three-month period ended
June 30, 2015
(April 1, 2015 - June 30, 2015)

Three-month period ended
June 30, 2016
(April 1, 2016 - June 30, 2016)

3,573

2,277

680
(13)
1,031
(159)

(2,301)
26(5,448)
537

11

(435)

1,550
5,123

(7,620)(5,342)

4,805
318(4,843)(499)

Profit for the period
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 parent
Non-controlling interests- 8 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017(3) Notes related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Segment Information, etc.)
Segment Information
I Three-month period ended June 30, 2015 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
To Quarterly
Consolidated

Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

Corporate Adjustments
Statements of(Note) 2(Note) 3
Income(Note) 4

Net sales
Sales to40,43964,97429,89928,68020,977

184,971

176

185,147--

185,147

510

573

188

625

106

2,003

1,371

3,374

-

(3,374)-

Total

40,94965,54730,08829,30521,083

186,974

1,547

188,522-(3,374)

185,147

Segment income(loss)

1,110

1,331

1,526

558

978

5,506

40

5,547

(715)

126

4,958

customers
Intersegment
sales/transfers(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.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment Income (loss) Total, Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.
II Three-month period ended June 30, 2016 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
To Quarterly
Consolidated

Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

Corporate Adjustments
Statements of(Note) 2(Note) 3
Income(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers
Total
Segment income(loss)

37,09058,691

29,887

26,226

21,328173,224169

173,394--

173,394

433

590

411

603

130

2,170

1,446

3,616

-

(3,616)-37,52459,28230,29826,83021,458

175,394

1,615

177,010-(3,616)173,394

868

1,201

1,481

271

1,252

5,075

73

5,148

(1,759)

136

3,525

(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.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment Income (loss) Total, Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

(Significant Fluctuations in Shareholders’ Equity)
No matters to report.

- 9 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

(Significant Subsequent Events)
No matters to report.

4. Supplementary Information(1) Overseas Sales
Three-month period ended June 30, 2015 (consolidated)
Greater
China
I

Overseas sales(Millions of yen)II

Consolidated sales

52,285ASEAN

Americas26,9408,457Europe

Other

3,383

Total

4,041

185,147(Millions of yen)III

Ratio of overseas sales toconsolidated sales (%)

95,108

28.2

14.6

4.6

1.8

2.2

51.4

Three-month period ended June 30, 2016 (consolidated)
Greater
China
I

Overseas sales(Millions of yen)II

46,188ASEAN

Americas24,781

7,037

Europe

Other

2,928

Total

3,548

Consolidated sales

173,394(Millions of yen)III

Ratio of overseas sales toconsolidated sales (%)

84,484

26.6

14.3

4.1

1.7

2.0

48.7

(Note)
1. Overseas sales consist of net sales of the Company and consolidated subsidiaries in other countries or regions.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China......China, Hong Kong, Taiwan(2) ASEAN .............. Thailand, Singapore(3) Americas ............. U.S., Mexico(4) Europe ..............Germany(5) Other .............. Korea
4.

Change in region classifications
The Company had classified its regions as Northeast Asia, Southeast Asia, North America, and Europe & Others. Beginning withthe first quarter of the current consolidated fiscal year, the Company has renamed and reclassified its regions for coordination with
the Company’s ACE-2020, our mid-term management plan.
(1) Northeast Asia renamed as Greater China; Southeast Asia renamed as ASEAN; North America renamed as Americas.
Europe & Others categorized separately into Europe and Other.
(2) Brazil, formerly classified under Europe & Others, now included in Americas(3) Korea, formerly classified under Northeast Asia, now included in Other- 10 -