Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019
<Under Japanese GAAP>May 7, 2019

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:
Akira Takami, Executive Officer, General Manager, Accounting Division TEL: +81-3-3665-3103
Annual general meeting of stockholders (scheduled): June 21, 2019
Start of distribution of dividends (scheduled): June 24, 2019
Securities report filing (scheduled): June 24, 2019
Supplementary documents: Yes
Investors’ meeting: Yes(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Fiscal Year Ended March 31, 2019
(April 1, 2018 to March 31, 2019)(1) Consolidated Operating Results
Net salesFYE March 2019
FYE March 2018

Millions of yen(Notes)Comprehensive income

FYE March 2019
FYE March 2018

Operating income%

807,755
783,933(% = year-on-year change)
Profit attributable toOrdinary income
owners of the parent

3.0
8.5

Millions of yen%

25,22624,118

4.6
60.5

Millions of yen

26,64325,982

%

2.5
58.8

Millions of yen

20,136
17,175

%

17.2
66.2

FYE March 2019: ¥11,803 million ( 42.8% decrease)
FYE March 2018: ¥20,648 million ( 5.3% decrease)
Earnings per
share
Yen
161.30136.34(Reference) Equity in earnings of affiliates

Earnings per
share (diluted)
Yen−−

Ordinary income/total assets
%
%
6.6
4.7
5.8
4.7

Return on equity

Operatingincome/net sales
%
3.1
3.1

FYE March 2019: ¥538 million
FYE March 2018: ¥921 million(2) Consolidated Financial Position
Total assets
FYE March 2019
FYE March 2018
(Reference) Equity capitalMillions of yen

567,346
569,456

Net assets
Millions of yen

312,609308,804

Net worth ratio

Net assets per share
%

Yen

54.2
53.3

2,481.01
2,424.97

Cash flows fromfinancing activities

Cash and cash
equivalents, end of theyear

FYE March 2019: ¥307,674 million
FYE March 2018: ¥303,636 million(3) Consolidated Cash Flows
Cash flows fromoperating activitiesFYE March 2019
FYE March 2018

Millions of yen

17,37521,013

Cash flows frominvesting activities
Millions of yen(7,325)(14,442)Millions of yen(8,909)(3,161)Millions of yen

44,01742,857

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

1Q
FYE March 2018
FYE March 2019
FYE March 2020 (estimate)

Yen

−
−
−

Yen

17.00
18.00
22.00

Yen

Yen

23.00
24.00
22.00

−
−
−

Annual
Yen

40.00
42.00
44.00

Total dividends
Dividends/
Payout ratio
paid
net assets(consolidated)(full fiscal year)(consolidated)
Millions of yen

5,023
5,230

%

%

29.3
26.0
26.6

1.7
1.7

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2020
(April 1, 2019 to March 31, 2020)(% = year-on-year change)
Net sales
Millions of yen

Full fiscal year
(Note)

850,000

Operating income%

5.2

Millions of yen

26,000

Profit attributable toowners of the parent

Ordinary income% Millions of yen

3.1

27,000% Millions of yen

1.3

20,500Earnings per
share

%

1.8

Yen

165.31As the Company only discloses full-year earnings targets, we have omitted presentation of interim consolidated results here.

* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope of consolidation): No
New: ― (Company name:)
Excluded: ― (Company name:)(2) Changes of accounting principles, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: No
ii. Changes in items other than (i) above: Noiii. Changes in accounting estimates: No
iv. Restatement of prior period financial statements after error corrections: No(3) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)
March 31, 2019
127,408,285 shares March 31, 2018
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
March 31, 2019
3,396,352 shares

March 31, 2018

2,195,966 shares

Average number of shares during the period
March 31, 2019
124,842,824 shares

March 31, 2018125,977,181 shares* These consolidated financial statements are not subject to audit by an independent audit corporation* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The earnings forecasts presented in this document are based upon currently available information and assumptions
deemed rational. A variety of factors could cause actual results to differ materially from forecasts.
Please refer to “1. Business Performance” on pages 2 through 6 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

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

5(3) Dividend Policy and Dividends for the Fiscal Years Ending March 2019 and 2020

6

2. Basic Policy on the Selection of Accounting Standards

6

3. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheets

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

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

11(4) Consolidated Statements of Cash Flows

13(5) Notes Related to Consolidated Financial Statements

15(Assumption for Going Concern)

15(Changes in Presentation Methods)

15(Segment Information, etc.)

15(Per-Share Data)

22(Significant Subsequent Events)

22

－

1 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

1. Business Performance(1) Review of Business Performance(Performance for the Fiscal Year Ended March 2019)a. General Summary of Results
The Japanese economy remained strong throughout the current consolidated fiscal year, supported by improved corporate
earnings, employment, and payrolls. However, uncertainties in the global economy have been increasing since the end of theprior year, and signs have emerged of a slowing in growth, mainly in the industrial sector, which relies on demand fromoverseas. Although corporate earnings in the United States has been a major driving force in the global economy, U.S.-China
trade frictions, national fiscal policies, exchange rate fluctuations, and other emerging risk factors have given rise to concerns
about the future direction of the world economy.
In this environment, the Company recorded domestic sales of ¥412.61 billion (+4.3% year on year) for the current consolidated
fiscal year. Overseas sales amounted to ¥395.13 billion (+1.7%). In total, the Company recorded ¥807.75 billion in net sales(+3.0%), a record high.
The Company recorded gross profit of ¥105.44 billion (+2.7%) mainly due to generally higher global sales and improved
profitability among the Company’s manufacturing subsidiaries. Operating income was ¥25.22 billion (+4.6%). Ordinary
income amounted to ¥26.64 billion (+2.5%), while profit attributable to owners of the parent amounted to ¥20.13 billion(+17.2%). All profit indicators marked a record highs for the consolidated fiscal year in the history of the Company.

b. Segment Summary
The following section describes segment earnings for the period.
The Company reclassified certain reportable segments in the current consolidated fiscal year. The Company has reclassified
reportable segment classifications for the prior consolidated fiscal year for comparative purposes.

Functional Materials
The Functional Materials segment recorded higher sales in both domestic and overseas markets.
The Performance Chemicals business recorded higher sales, mainly due to improved sales of coating raw materials andurethane materials, spurred by strong automotive production in Japan and overseas, as well as naphtha price increases. Anothercontributing factor was the additional sales of the U.S. distributor acquired in the second quarter of the prior fiscal year,
reflected for the entire current fiscal year.
The Speciality Chemicals business recorded sales slightly higher compared to the prior fiscal year. Although overseas sales
were lower for the period, our domestic business experienced an increase in sales of electronics chemicals and plastic
materials/plastic additives for the semiconductor and other related electronics industries.
As a result, the Functional Materials segment recorded sales of ¥179.62 billion, a ¥4.7 billion (+2.7%) increase compared tothe prior fiscal year. Operating income for the segment was ¥5.49 billion, an increase of ¥300 million (+6.0%).

Advanced Materials & Processing
The Advanced Materials & Processing segment recorded higher sales in both domestic and overseas markets.
The Colors & Advanced Processing business recorded higher sales as a whole, driven by growth in Japan for plastic resins forindustrial and packaging applications and dyes/additives, as well as growth in digital print processing materials in both Japanand overseas.
The Polymer Global Account business mainly sells plastics to the office equipment, appliance, and video game device markets.
The sales of those business were higher overall, driven by growth in Japan, Greater China, and ASEAN.

－

2 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019As a result, the Advanced Materials & Processing segment recorded sales of ¥275.2 billion, a ¥12.37 billion (+4.7%) increase
compared to the prior fiscal year. Operating income grew ¥1.39 billion (+20.8%), reaching ¥8.09 billion for year.

Electronics
The Electronics segment recorded lower sales in both domestic and overseas markets.
Despite strong performance in formulated epoxy resins sales to the semiconductor industry, lower photolithography materials
sales and equipment-related sales drove Electronic Chemicals business sales lower.
The Electronic Materials business recorded lower sales due to decreases in display-related products, despite strong
performance in our business for abrasives used in connection with interim processing in semiconductors.
As a result, sales for the segment amounted to ¥122.31 billion, which was a ¥7.0 billion (-5.4%) decrease. Operating income
fell ¥1.51 billion (-17.0%) to ¥7.4 billion for year.

Automotive & Energy
The Automotive Solutions business recorded higher sales, driven by strong performance in our resins business in Japan,
Greater China, and ASEAN. Sales growth in car electronics-related products was another positive factor.
As a result, sales for the segment amounted to ¥139.23 billion, which was a ¥9.52 billion (+7.3%) increase compared to theprior fiscal year. Segment operating income grew ¥630 million (+26.4%), reaching ¥3.05 billion for year.
(Note) As of April 1, 2019, the Automotive & Energy Segment has been renamed the Mobility & Energy Segment.

Life & Healthcare
The Life & Healthcare segment recorded higher sales in both domestic and overseas markets.
Sales of TREHA™ and other products in the food ingredients field in the Life & Healthcare Products business rose overseas
and were slightly higher in Japan. Sales of AA2G™ to customers in the skin care and toiletries sectors were higher both inJapan and overseas. In the medical and pharmaceutical field, sales of pharmaceutical raw materials and intermediates, sales of
medical materials, and pharmaceutical business sales were higher than the prior fiscal year. As a result, the business recorded
higher sales compared to the prior year.
The Beauty Care Products business, which includes sales of cosmetics and health foods, recorded lower sales, driven down due
to weak performance across all product categories.
As a result, sales for the segment amounted to ¥90.79 billion, which was a ¥4.27 billion (+4.9%) increase compared to the priorfiscal year. Operating income grew ¥440 million (+10.6%), reaching ¥4.64 billion.

Other
No special matters to disclose.

－

3 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

(Forecast for the Fiscal Year Ending March 2020)
a. Performance Forecast for the Fiscal Year Ending March 2020
Improving employment and payrolls in Japan should prevent any significant declines in personal consumption in the Japanese
economy. However, we are concerned with the impact of consumption tax increase and uncertainty in the industrial sector,
which relies mainly on orders from overseas. The global economy is experiencing the impact of U.S.-China trade frictions, aswell as a rise in risk factors reflecting national fiscal policies and exchange rate fluctuations. We intend to keep a close eye on
the U.S. and China, two countries with a major impact on macroeconomic trends.
With respect to our business environment, we recognize the rising importance in supply issues stemming from global
environmental regulations, global governance in response to increasing overseas business opportunities, and the need forstronger compliance structures at our manufacturing businesses.
For the fiscal year ending March 2020, we forecast consolidated net sales of ¥850.0 billion (+5.2% year on year), operating
income of ¥26.0 billion (+3.1%), ordinary income of ¥27.0 billion (+1.3%), and profit attributable to owners of the parent in
the amount of ¥20.5 billion (+1.8%).
These forecasts have been developed based on a currency conversion rate of ¥110 to the U.S. dollar.
Further, these forecasts have been calculated based on information available at the time. Actual results may vary due to avariety of factors, including business conditions overseas and in Japan, exchange rate trends, etc.

Net sales

Operating income

Ordinary income(Millions of yen)
Profit attributable toowners of the parent

FYE March 2020

850,000

26,00027,00020,500FYE March 2019807,755

25,226

26,643

20,136

Change

+5.2%

+3.1%

+1.3%

+1.8%

b. Net Sales Forecast by Business Segment(Millions of yen)FYE March2019 Actual

FYE March2020 Forecast

ChangeFunctional Materials

179,627

187,700+4.5%

Advanced Materials & Processing

275,203295,100+7.2%

Electronics

122,319

126,300+3.3%

Mobility & Energy

139,235

145,100+4.2%

Life & Healthcare

90,794

95,200

+4.9%

574

600

+4.5%

807,755

850,000

+5.2%

Other
Total Sales(Note) As of April 1, 2019, the Automotive & Energy Segment has been renamed the Mobility & Energy Segment.

－

4 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019(2) Review of Financial Positiona. Summary of Consolidated Balance Sheets
As of the end of the consolidated fiscal year, current assets amounted to ¥365.82 billion. This represents an increase of ¥12.5
billion compared to the end of the prior consolidated fiscal year, mainly due to increases in accounts receivable andinventories. Non-current assets amounted to ¥201.51 billion, down ¥14.61 billion. This decrease was mainly due to a decrease
in investments in securities stemming from the sale of certain shares retained and lower fair values in shares retained. As aresult of these various factors, total assets decreased ¥2.1 billion to ¥567.34 billion as of the end of the consolidated fiscal year.
Liabilities amounted to ¥254.73 billion, a ¥5.91 billion decrease compared to the end of the prior consolidated fiscal year. Thisdecrease was mainly due to repayments of long-term loans.
Net assets amounted to ¥312.6 billion, up ¥3.8 billion. While the Company recorded a decrease of ¥8.91 billion in net
unrealized holding gain on securities, profit attributable to owners of the parent amounted to ¥20.13 billion, which more thanoffset this decrease.
As a result, the Company recorded a shareholders’ equity ratio of 54.2%, 0.9 points higher than the end of the priorconsolidated fiscal year.

b. Summary of Consolidated Cash Flows
Cash and cash equivalents (Cash) increased ¥1.15 billion (+2.7%) compared to the end of the prior consolidated fiscal year,
amounting to ¥44.01 billion. Cash from operating activities amounted to ¥17.37 billion, while cash used in investing activities
came to ¥7.32 billion and cash used in financing activities amounted to ¥8.9 billion.

(Cash Flows from Operating Activities)
Cash from operating activities for the current consolidated fiscal year amounted to ¥17.37 billion. Cash decreased ¥12.52
billion stemming from an increase in working capital, while the Company recorded ¥4.87 billion in income taxes paid. In
contrast, the Company recorded ¥28.2 billion in profit before income taxes and cash reserved of ¥9.32 billion related todepreciation and amortization.

(Cash Flows from Investing Activities)
Cash used in investing activities for the current consolidated fiscal year amounted to ¥7.32 billion. This result was mainly due
to ¥10.75 billion in purchases of tangible and intangible fixed assets, as opposed to ¥5.47 billion in proceeds from sales ofinvestments in securities.

(Cash Flows from Financing Activities)
Cash used in financing activities for the current consolidated fiscal year amounted to ¥8.9 billion. This result was mainly due torepayments of long-term loans in the amount of ¥11.17 billion and payments of dividends in the amount of ¥5.13 billion. Theseoutlays exceeded net proceeds from commercial paper of ¥7.0 billion.

－

5 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

FYE March
2015

FYE March
2016

FYE March
2017

FYE March
2018

FYE March
2019

Shareholders’ equity ratio

51.5%

53.5%

54.7%

53.3%

54.2%

Shareholders' equity ratio basedon market value

36.6%

30.7%

36.9%

39.7%

34.7%

Interest-bearing debt to cash
flow ratio (years)

6.4

3.0

5.6

4.1

4.2

Interest coverage ratio (times)

13.7

29.0

13.9

16.3

10.4

Shareholders’ equity ratio: Equity capital/total assets
Shareholders' equity ratio based on market value: Market capitalization/total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/operating cash flow
Interest coverage ratio: Operating cash flow/interest payments(Note 1) Indicators are calculated based on consolidated figures.
(Note 2) Market capitalization is calculated using the closing price at the end of the year multiplied by the number ofoutstanding shares at the end of the year (less treasury stock at cost).
(Note 3) Operating cash flow is net cash flow provided by operating activities as shown in the consolidated statements ofcash flows. Interest-bearing debt is all liabilities in the consolidated balance sheets for which interest is payable.
Interest payments are the amount of interest paid as presented in the consolidated statements of cash flows.
(Note 4) The company adopted Partial Amendment to Accounting Standard for Tax-Effect Accounting (ASBJ Statement
No.28, February 16, 2018) at the beginning of the current consolidated fiscal year. Indicators for the prior fiscal
year reflect the retroactive application of this accounting standard.

(3) Dividend Policy and Dividends for the Fiscal Years Ending March 2019 and 2020
Our basic policy is to continue paying a stable dividend to our shareholders in line with our consolidated results as we improve
our earnings power and management structure. We look to improve per-share dividends based on considerations of theconsolidated payout ratio and consolidated dividend to equity ratio. We also plan to use funds from internal reserves effectively
in our business growth and to build a stronger management function.
The NAGASE Group declared a year-and dividend of ¥24 per share based on this policy, a ¥1 increase compared to the priorfiscal year. As result the scheduled full-year cash dividend will amount to ¥42 per share, including an interim dividend.
We forecast a full-year dividend of ¥44 per share for the next fiscal year, which will be an increase of ¥2 per share. This
dividend will consist of a ¥22 per share interim dividend and a ¥22 per share year-end dividend.

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

－

6 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheets(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2018)

Current Consolidated Fiscal Year
(March 31, 2019)

43,303225,999
67,681
1,883
4,106
10,953(602)
353,325

44,068230,459
74,471
1,847
4,683
10,651(355)
365,827

58,016(32,562)
25,45462,031(46,275)
15,755
21,154
21,720(16,859)
4,861
67,22557,846(33,991)
23,85562,488(48,250)
14,23820,45623,940(16,022)
7,917
66,46725,478
12,215
3,396
41,09023,866
10,6392,772
37,279100,403
109
2,409
4,992
(101)
107,813
216,130
569,456

90,263
243
109
2,290
4,959
(92)
97,771
201,518
567,346

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
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)
Land
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Technology-based assets
Other
Total intangible fixed assets
Investments and other assets
Investments in securities
Long-term loans receivable
Net defined benefit assets
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－

7 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2018)

Current Consolidated Fiscal Year
(March 31, 2019)

118,028
31,934
11,067
5,000
1,738
5,451
274
19,500
192,996

117,256
34,964949
12,00010,000
3,594
5,355
287
17,457
201,866

20,00017,906
14,42014,518809
67,655
260,651

10,00017,577
12,075
12,461757
52,870254,737

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

9,699
10,647
247,617(5,070)262,892

50,773
(15)
2,917
(317)
53,3585,168
308,804
569,456

41,857
(7)
3,224
(292)
44,781
4,934
312,609567,346

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
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
Net unrealized holding gain on securities
Deferred loss on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－

8 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Net Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2017 March 31, 2018)

Current Consolidated Fiscal Year
(April 1, 2018 March 31, 2019)783,933
681,258
102,675

807,755
702,313
105,441

11,88023,0503,515
254

12,696
23,644
3,289
275

4,323

4,088

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

1,698
24
(243)
1,815
32,92480,21525,226

185
1,605
268
921
169
385
3,536

184
1,809
261
538
985
3,779

1,294
378
1,672
25,982

1,702
228
430
2,361
26,643

50
8
84
288
229
661

282
4,355
6
205
4,849

419
168
212
847
12
0
462
294
175
2,594
24,049
5,358
1,098
6,457
17,592417
17,175

78
275
205
2,294
2
208
194
28
3,289
28,204
6,400
1,395
7,796
20,408271
20,136

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

9 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

(Consolidated Statements of Comprehensive Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2017 March 31, 2018)

Current Consolidated Fiscal Year
(April 1, 2018 March 31, 2019)17,592

20,408

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

(8,907)
7
298
25

50

(29)

3,055
20,648(8,604)
11,803

20,101547

11,640163

Net income
Other comprehensive income
Net unrealized holding gain (loss) 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

－

10 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019(3) Consolidated Statements of Changes in Shareholders’ Equity
Prior Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Retained earnings

11,590219,721Less treasury stock,at costTotal shareholders’equity(1,337)

239,674

ChangesCash dividends(4,287)(4,287)

Profit attributable to ownersof the parent

17,175

17,175Purchases of treasury stock
Disposal of treasury stock0

Equity transactions with
non-controlling interests(431)(1,776)(1,776)

0

0
(431)

Changes in scope of
consolidation

(67)

(67)

Changes from merger withunconsolidated subsidiaries

(6)

(6)

(1)

(1)

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

-

(431)

12,812(1,776)

10,603

9,699

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

Accumulated other comprehensive income

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred loss onhedgesTranslation
adjustments

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net assets

47,683

4

3,129

(274)

50,542

4,981

295,198

ChangesCash dividends(4,287)

Profit attributable to ownersof the parent

17,175Purchases of treasury stock(1,776)

Disposal of treasury stock0

Equity transactions with
non-controlling interests(431)

Changes in scope of
consolidation
Changes resulting frommerger with unconsolidated
subsidiaries
Changes in scope of equity
affiliates
Changes other thanshareholders’ equity
accounts (net)

(67)
(6)
(1)
3,090

(19)

(212)

(42)

2,815

187

3,002

Total changes

3,090

(19)

(212)

(42)

2,815

187

13,606

Balance, end of period

50,773

(15)

2,917

(317)

53,3585,168

308,804－

11 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

Current Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Less treasury stock,at costRetained earnings

11,158232,534

Total shareholders’equity(3,114)250,278

ChangesCash dividends(5,133)(5,133)

Profit attributable to ownersof the parent

20,136

20,136

Purchases of treasury stock(1,956)Equity transactions with
non-controlling interests(1,956)(500)

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

(500)

(11)

79

68

-

(511)

15,082(1,956)

12,614

9,699

10,647

247,617(5,070)262,892

Accumulated other comprehensive income

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred gain on
hedgesTranslation
adjustments

Remeasurementsof defined benefit
plans

50,773

(15)

2,917

(317)

Total
Non-controlling
Total net assets
accumulated
interests
othercomprehensive
income53,3585,168

308,804

ChangesCash dividends(5,133)

Profit attributable to ownersof the parent

20,136

Purchases of treasury stock(1,956)Equity transactions with
non-controlling interests(500)

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

68(8,916)

7

307

25

(8,576)(233)(8,810)Total changes(8,916)

7

307

25

(8,576)

(233)

3,804

Balance, end of period

41,857

(7)

3,224

(292)

44,781

4,934

312,609－12 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019(4) Consolidated Statements of Cash Flows
Prior Consolidated Fiscal
Year(April 1, 2017 March 31, 2018)(Millions of yen)
Current Consolidated Fiscal
Year(April 1, 2018 March 31, 2019)

24,04928,204

9,295

9,329

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

2,294
1,815
(205)
205
194
(2,023)(1,994)
1,702
295

(92)

(4,359)(17,382)(9,610)15,024
1,623
24,9372,235(1,292)(4,865)21,013(4,477)(7,157)(894)(1,530)21,3992,520(1,670)(4,874)
17,375(6,679)1,360(539)(1,603)105(54)(10,253)917(505)(2,555)5,479(96)(5,994)

-

207

-

108

(807)

(242)
288
(1,400)(14,442)

392
205
(102)
(7,325)

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

－

13 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

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

－

14 －

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

2,771
7,000
582
(11,175)(1,956)(5,133)
(398)

(606)

(498)

(30)
(3,161)(175)
3,234
39,730(99)(8,909)100
1,240
42,857

(111)

(80)

4

-

42,85744,017

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019(5) Notes Related to Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Changes in Presentation Methods)(Changes in Conjunction with the Application of Partial Amendment to the Accounting Standard for Tax
Effect Accounting)
At the beginning of the current consolidated fiscal year, the Company adopted the Partial Amendment to the AccountingStandard for Tax Effect Accounting (ASBJ Statement No.28, February 16, 2018). Under this standard, the Company now
classifies deferred tax assets under investments and other assets, while deferred tax liabilities are classified under long-term
liabilities for presentation.
As a result, deferred tax assets under current assets on the consolidated balance sheet for the prior consolidated fiscal year
decreased ¥2,783 million, while deferred tax assets under investments and other assets increased ¥2,783 million. Deferred tax
liabilities under current liabilities decreased ¥44 million, while deferred tax liabilities under long-term liabilities increased ¥44
million.
The Company offsets deferred tax assets and deferred tax liabilities for the same tax paying entity. Total assets have decreased¥1,989 million compared to the balance prior to this change.

(Segment Information, etc.)
a. Segment Information
1. Reportable Segments
The Company’s reportable segments are those units comprising the NAGASE Group for which separate financial
information is available and for which the board of directors makes regular decisions regarding resource allocation andoperating performance.
The Company classifies reportable segments according to the location of the business in the value chain and the market(s)targeted. Accordingly, the Company has defined five segment categories: Functional Materials (located at the top of thevalue chain), Advanced Materials & Processing (located in the next stage of the value chain), Electronics, Automotive &Energy, and Life & Healthcare (these last three segments functioning across all industries).
Beginning in the current consolidated fiscal year, the Company reclassified Fitz Chem LLC under the Functional Materials
and the Life & Healthcare segments. In the prior consolidated fiscal year, Fitz Chem LLC was classified under the
Functional Materials segment. This change is in response to a change in business unit management.
The Company has prepared segment information for the prior consolidated fiscal year according to this reclassification. This
information is provided for the prior consolidated fiscal year under 3. Information related to Net Sales, Profit (Loss), Assets,
Liabilities, and Other by Segment.
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials, auxiliaries, plastic
materials, plastic additives, industrial oil solutions, surfactants, fluorochemicals, encapsulant materials, silicone materials,
and more for the paints/inks, resins, urethane foam, organic synthesis, surfactants, and semiconductor industries.
The Advanced Materials & Processing segment is engaged in sales of dyestuffs, dyes, functional dyes, digital print
processing materials, thermoplastic resins, thermosetting resins, automobile refinish paints, conductive coatings, synthetic
rubber, inorganic materials, plastics products, and resins molding tools/dies for the dye/additive, digital print processing
material, fiber processing, raw resin material, resin molding, functional film and sheet, construction, and other industries.

－

15 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

The Electronics segment is engaged in the sales of pre-processing materials and devices for LCD/semiconductors, materials
for display panels, materials and devices for semiconductor assembly, low-temperature/vacuum equipment, high-function
epoxy resins, precision electronics abrasives, and more for the display, touch panel, semiconductor, hard disk drive,electronic components, and heavy electrical industries.
The Automotive & Energy segment is engaged in the sales of plastic products, thermoplastic resins, thermosetting resins,
silicone products, resin molding tools/dies, high-function car electronics materials and components, battery materials, solar
cell/secondary battery materials and more for the automotive, automotive component, and energy industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials, research
products, in vitro diagnostics, enzymes, food additives, additives for cosmetics, feeds, and surfactants for thepharmaceutical, food, and cosmetics industries. The segment offers radiation measurement as one of its main services. In
addition, this segment sells cosmetics, health foods, and beauty foods directly to consumers.

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

－16 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

3. Information related to Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Prior Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics& Energy Healthcare
Materials
Processing

Total

Other
(Note 1)

Total

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

Net sales
Sales tocustomers

174,922

262,831

129,324

129,708

86,517783,303

629

783,933--

783,933

Intersegment
sales/transfers

2,543

2,234

2,108

2,817

508

10,213

4,783

14,997-(14,997)-

Total

177,466

265,065

131,433

132,526

87,026

793,517

5,413

798,931-(14,997)

783,933

Segment income(loss)

5,185

6,700

8,917

2,415

4,201

27,420207

27,628(3,954)445

24,118Segment assets

86,176

134,977

70,14951,10999,396441,8095,304

447,113

151,605(29,262)

569,456

Depreciation
and amortization

456

645

2,454

249

3,552

7,359

218

7,577

1,717

-

9,295

Amortization of
goodwill

82

-

112

-

1,552

1,748

-

1,748

-

-

1,748

Unamortizedbalance of
goodwill

2,031

-

1,296

-

22,15025,478-25,478--25,478Investments inequity affiliates

2,478

1,482

2,751

1,231

2,601

10,545-

10,545-(2)

10,542

Increase inproperty, plant,
and equipment
and intangible
fixed assets

243

2,817

1,834

191

2,369

7,458

68

7,527

1,896

-

9,423

Other

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

－

17 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

Current Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics& Energy Healthcare
Materials
Processing

Total

Other
(Note 1)

Total

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

Net sales
Sales tocustomers

179,627

275,203

122,319

139,235

90,794807,181574

807,755--

807,755

Intersegment
sales/transfers

2,992

2,357

1,749

2,773

399

10,272

5,459

15,731-(15,731)-

Total

182,620

277,561

124,069

142,009

91,194

817,454

6,033

823,487-(15,731)

807,755

Segment income(loss)

5,494

8,093

7,400

3,051

4,648

28,689284

28,973(4,253)505

25,226

Segment assets

87,158135,403

65,02256,747

97,627441,960

4,833

446,794

141,205(20,653)

567,346

Depreciation
and amortization

444

692

2,511

211

3,801

7,660

211

7,872

1,457

-

9,329

Amortization of
goodwill

110

-

136

-

1,569

1,815

-

1,815

-

-

1,815

Unamortizedbalance of
goodwill

2,012

-

1,218

-

20,63623,866-23,866--23,866

Investments inequity affiliates

2,398

1,545

3,765

1,253

2,769

11,733-

11,733-(52)

11,680

Increase inproperty, plant,
and equipment
and intangible
fixed assets

314

1,542

3,201

329

3,206

8,594

130

8,725

1,887

-

10,612

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

－

18 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019b. Other Information
Prior Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

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

Greater China

395,428

ASEAN

207,437

Americas110,380

36,564

Europe14,178

Other

Total

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

Other
61,686

Total
5,539

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

－

19 －

67,225

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019

Current Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

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

Greater China

412,617

ASEAN

205,408

Americas118,11339,451

Europe15,272

Other

Total

16,892807,755(Note) 1. Net sales are categorized by country or region, according to the location of the customer.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China.....China, Hong Kong, Taiwan(2) ASEAN..............Thailand, Singapore(3) Americas............U.S., Mexico(4) Europe...............Germany(5) Other..................Korea(2) Property, plant and equipment(Millions of yen)
Japan

Other
60,344

Total
6,123

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

－

20 －

66,467

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019c. Impairment Losses of Non-Current Assets for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)(Millions of yen)
Reportable Segments
Advanced
Automotive Life &Functional
Materials & Electronics& Energy Healthcare
Materials
Processing
Impairment
loss

－

528

221

4

Total
754

－

Corporate/
Elimination

Other

－

92

Total

847

Current Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)(Millions of yen)
Reportable Segments
Advanced
Automotive Life &Functional
Materials & Electronics& Energy Healthcare
Materials
Processing
Impairment
loss

－

221

－

58

1,999

Total
2,279

Corporate/
Elimination

Other

－

15

Total

2,294

(Note) The Life & Healthcare segment recorded impairment loss of ¥1,999 million for business assets related to apharmaceutical manufacturing business due to decreasing profitability. The Company wrote down the book value ofthese assets to their recoverable amounts.

－

21 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2019d. Amortization and Unamortized Balance of Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
Omitted, as the same information has been disclosed under Segment Information.

Current Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
Omitted, as the same information has been disclosed under Segment Information.

e. Information about Gain on Negative Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2017 to March 31, 2018)
No material matters to report.

Current Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
No matters to report.

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

Current Consolidated Fiscal Year
(April 1, 2018 - March 31,
2019)

Net assets per share¥2,424.97¥2,481.01

Earnings per share¥136.34¥161.30(Note) 1. Information for diluted earnings per share not presented, as the Company does not issue any stock with dilutive effects.
2. Basic earnings per share calculations are as shown below.
Prior Consolidated Fiscal Year
(April 1, 2017 - March 31,
2018)

Current Consolidated Fiscal Year
(April 1, 2018 - March 31,
2019)17,175

20,136

17,175

20,136125,977,181

124,842,824

Profit attributable to owners of the parent (millions of yen)
Profit attributable to common stock owners of the parent(millions of yen)
Average number of outstanding shares of common stock(shares)(Significant Subsequent Events)
No matters to report.

－

22 －