Consolidated Financial Statements for the Year Ended March 31, 2013
<Under Japanese GAAP>May 10, 2013
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, Osaka (First Sections)
Code number:
8012 (http://www.nagase.co.jp)
Representative:
Hiroshi Nagase, Representative Director and President
Contact:
Masanori Furukawa, General Manager, Corporate Accounting Division
Tel: +81-3-3665-3103
Annual General Meeting of Stockholders (scheduled): June 26, 2013
Start of Distribution of Dividends (scheduled): June 27, 2013
Securities Report Filing (scheduled): June 27, 2013
Supplementary Documents: Yes
Investors' Meeting: Yes(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Year Ended March 31, 2013
(April 1, 2012 to March 31, 2013)(1) Consolidated Operating Results(% = year-on-year change)
Net salesFYE March 2013
FYE March 2012

Operating profit

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

666,272
631,854

5.4(4.3)

15,57813,42716.0(28.3)

17,927
15,69014.3(23.9)

14,1828,570

65.5(33.2)(Notes) Comprehensive income

FYE March 2013:
FYE March 2012:
Earnings per
share¥27,222 million (273.8%)¥7,282 million (20.8% decrease)

Earnings per
share (diluted)

Return on equity

Ordinary income/total assets

Operatingincome/net sales

Yen

Yen

%

%

%

FYE March 2013
FYE March 2012111.31
66.69




6.5
4.2

3.8
3.8

2.3
2.1

(Reference) Equity in earnings of affiliates

FYE March 2013:
FYE March 2012¥933 million¥368 million(2) Consolidated Financial Position
Total assets
FYE March 2013
FYE March 2012
(Reference) Equity capital

Net assets

Net worth ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

486,747
450,842

237,806
212,74446.9
45.4

1,803.31
1,592.87

FYE March 2013:
FYE March 2012:¥228,505 million¥204,706 million(3) Consolidated Cash Flows
Cash flows fromoperating activitiesFYE March 2013
FYE March 2012

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents, end of theyear

Millions of yen

Millions of yen

Millions of yen

Millions of yen

18,576
5,690(9,529)(81,066)

1,164
56,96145,81628,517

2. Dividends
Annual dividend per share
Fiscal
2Q
3Q
Year
End

1Q

Total dividends

Annualpaid(full fiscal year)

Payout ratio(consolidated)

Dividends/
net assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%





12.00
13.00
14.00





12.00
13.00
14.00

24.00
26.00
28.00

3,084
3,294

36.0
23.4
24.5

1.5
1.5

FYE March 2012
FYE March 2013
FYE March 2014 (estimate)

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2014
(April 1, 2013 to March 31, 2014)(% = year-on-year change)
Net sales
Millions of yen

2Q (cumulative)
Full fiscal year
(Note)


764,000

Operating profit% Millions of yen


14.7


19,200Ordinary income% Millions of yen


23.2


21,000Earnings per
share

Net income% Millions of yen


17.1


14,500

%

Yen


2.2


114.43As 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 policies or presentation methods in the consolidated financial statementsi.
Changes in accordance with revisions to accounting and other standards: No
ii. Changes in items other than (i) above: Yesiii. Changes in accounting estimates: Yes
iv. Restatement of prior period financial statements after error corrections: No(Note) For details, see page 23, “3. Consolidated Financial Statements (6) Changes in Basic Matters related to the
Preparations of Consolidated Financial Statements.”(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, 2013
138,408,285 shares March 31, 2012
138,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
March 31, 2013
11,693,809 shares

March 31, 2012

9,893,787 shares

Average number of shares during the period:
March 31, 2013
127,406,786shares

March 31, 2012

128,514,527shares* Disclosure of Audit Procedure ProgressThis earnings report is exempt from audit procedures as provided by the Financial Instruments and Exchange Act.
Consolidated financial statements were undergoing the audit process at the time of the release of this report.
* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
Earnings forecasts presented in this document are based on information available and assumptions deemed rational at
the time. Actual performance could differ materially from forecasts due to a variety of factors.
Please refer to “1. Business Performance” on pages 2 through 9 of the attached supplementary documents for further
information.

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

Attachments
1. Business Performance ................................................................................................................. 2(1) Analysis of Business Performance ........................................................................................ 2(2) Analysis of Financial Position. .............................................................................................. 6(3) Dividend Policy and Dividends for the Fiscal Years Ended March 2013 andMarch 2014............................................................................................................................ 7(4) Operating and Other Risks .................................................................................................... 7
2. Management Policies ................................................................................................................ 10(1) Basic Management Policy ................................................................................................... 10(2) Management Objectives and Medium-Term Strategies ...................................................... 10(3) Issues to be Addressed by the Company ............................................................................. 11
3. Consolidated Financial Statements. .......................................................................................... 13(1) Consolidated Balance Sheets ............................................................................................... 13(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income ................................................................................................................................. 15(3) Consolidated Statement of Change in Shareholders' Equity................................................ 18(4) Consolidated Statements of Cash Flows.............................................................................. 21(5) Assumption for Going Concern ........................................................................................... 23(6) Changes in Basic Matters related to the Preparations of Consolidated Financial
Statements ........................................................................................................................... 23(7) Notes related to Consolidated Financial Statements ............................................................ 24(Segment Information,etc.) .................................................................................................. 24(Per-Share Data) .................................................................................................................. 30(Significant Subsequent Events) .......................................................................................... 30
4. Other ......................................................................................................................................... 31
Financial Highlights (Consolidated) .................................................................................... 31-1-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

1. Business Performance(1) Analysis of Business Performance(Performance for the Fiscal Year Ended March 2013)
a. General Summary of Results
During the past fiscal year, the global economy experienced growing demand for smartphones and tablets, as well
as stronger economies in Southeast Asia and North America. Negative customer sentiment in Japan, economic
stagnation in the European Union, and slowing growth and anti-Japan demonstrations in China combined to makefor wide gaps among countries and regions in economic performance. Lately, we have seen some small signs of
economic recovery in Japan. Export business is improving and share prices have gained strength with theweakening of the yen. Still, these improvements had little impact on helping our consolidated earnings for the
fiscal year under review.
In this environment, the Company recorded domestic sales of ¥361.97 billion (1.2% year-on-year decline) andoverseas sales of ¥304.3 billion (14.6% increase), resulting in total net sales of ¥666.27 billion, representing a
5.4% increase year on year.
The addition of Hayashibara Co., Ltd. (Hayashibara) to the consolidation and the strong performance insmartphone and tablet materials sales led to gross profit of ¥82.58 billion (15.3% year-on-year increase). Grossprofit ratio grew 1.1 points to 12.4% for the comparative period. The larger number of consolidated subsidiaries
meant greater selling expenses and general and administrative expenses. Losses among subsidiaries worsened,
which was another factor pressuring profits. However, lower depreciation and amortization (Changes in
depreciation methods for property, plant and equipment) offset these factors. As a result, the Company recorded
operating profit of ¥15.57 billion, which was a 16.0% increase year on year. The Company recorded ordinary
income of ¥17.92 billion, a 14.3% year-on-year increase. This result was mainly due to increased interest expense
related to the Company’s acquiring long-term funds for the purchase of Hayashibara, offsetting income gained
from equity in earnings of affiliates. In addition, the Company recorded impairment losses (¥1.89 billion) for
unprofitable production equipment at manufacturing subsidiaries. Other major factors affecting profits included
gain on sales of non-current assets (¥3.35 billion) for sales of land and increase of deferred tax assets (¥1.42
billion) related to recoverable tax losses of Hayashibara.by revised business plan. As a result, net income
amounted to ¥14.18 billion, which was a 65.5% year-on-year increase.
b. Segment Summary
Beginning April 2012, the Company has been executing on the “Change-S2014” three-year business plan. To
accomplish the goals set out in this plan, the Company reorganized four business segments (Chemicals, Plastics,
Electronics, and Life Sciences) away from product categories into segments to more fully concentrate the strengthsof our entire group, reflecting the respective positions of each business in the value chain, as well as with the mostclosely aligned industries. This realignment has resulted in five segment categories: Functional Materials (locatedat the top of the value 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 allindustries). See“3. Consolidated Financial Statements (7) Notes related to Consolidated Financial Statements(Segment Information, etc.)” for more detail regarding business segments, related industries, and products.
For presentation purposes, the Company has calculated prior year consolidated figures and ratios according to thesegment classifications above for comparison.
Functional Materials
Overall, net sales in the Functional Materials segment experienced marginal growth. The decrease in net sales inthe domestic market and in Northeast Asia was offset by significantly higher net sales in Southeast Asia.
Our performance chemicals business reported minor overall gains in net sales. As plastic materials and additives
sales to Asia fell, sales of urethane materials to the automotive industry also declined due to anti-Japanese-2-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

sentiment in China. In contrast, the Company saw strong performance in coating raw materials sales for thedomestic construction market, strong performance in basic chemicals in Southeast Asia, and higher sales ofadditives to the Middle East. These gains served to outpace the declines noted above.
Sales decreased overall in our specialty chemicals business. Surfactant sales were strong for the period; however,raw materials for industrial oil solutions (automotive & textile market) and fluorochemicals sales both fellcompared to the prior fiscal year. At the same time, precision abrasive materials sales for the hard disk drive
market underperformed year on year.
As a result, net sales for the Functional Materials segment amounted to ¥180.02 billion, which was a ¥2.89 billion(1.6%) increase year on year. Segment operating profit came in at ¥5.42 billion, a ¥850 million (13.6%) decline
year on year. This decline was mainly due to gross profit declines stemming from lower revenues in Japan andNortheast Asia, not fully offset by revenue gains and slightly higher profits in Southeast Asia.
Advanced Materials & Processing
The Advanced Materials & Processing segment saw minor overall performance declines during the period. While
net sales grew in Northeast Asia and Southeast Asia, these gains were offset by decreases in domestic
performance.
The colors and imaging business reported declines overall. The dyes/additives business and information printing
materials business showed comparative performance declines, while the Company’s reorganization of certain
businesses into equity method affiliates (including dyestuffs and textile processing agents for the textile processing
industry) contributed to lower sales performance.
Our plastic business for office equipment and appliance increased overall. While we did experience lower
domestic sales and raw materials exports to major users, plastic sales in Asia were stronger year on year, as were
exports of molding tools.
As a whole, our business related to functional films and sheets and plastic molding products reported lower net
sales. Sales of anti-reflective sheets for game machines experienced higher performance year on year. However,sales of liquid crystal polarizer film precision inspection systems underperformed prior year results by a slightmargin.
As a result, net sales for the Advanced Materials & Processing segment amounted to ¥214.54 billion, a decrease of¥3.38 billion (1.6%) compared to the prior fiscal year. The Segment reported operating profit of ¥2.38 billion,
which represented a ¥590 million (19.9%) year-on-year decline. The Segment attributed this decline mainly to
lower gross profit from revenue declines and worsened operating profit results among manufacturing subsidiaries
in the office equipment and appliances business.
Electronics
Sales in the Electronics segment increased overall for the period. The Company reported large net sales gains inNortheast Asia, with growth in Japan, Southeast Asia, Europe, and North America as well.
Net sales in the electronic chemicals business declined overall. We noted strong performance in sales for mobile
phone applications in our formulated epoxy resin business for the period. However, a decline in sales of chemicals
used in the manufacture of semiconductors and LCD panels led to the drop in overall performance.
The Electronic Materials business recorded sales declines for film used in LCDs and materials in LED lighting
applications during the period. In contrast, we noted strong performance in touch-panel material sales, which
contributed to overall wide gains in sales for the electronics materials business.
As a result, we recorded total net sales of ¥116.1 billion in this segment, representing a ¥5.6 billion (5.1%)
increase year on year. Operating profit amounted to ¥6.29 billion, which was a ¥270 million (4.6%) year-on-yearincrease, due to gross profit increases stemming from higher net sales of touch-panel materials.
-3-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

Automotive & Energy
Our automotive-related business saw growth overall during the period. During the first half of the fiscal year, salesof auto product increased significantly owing to reconstruction demand in the wake of March 11, eco-car
subsidies, and other domestic factors. Overseas as well, the Japanese auto makers produced cars in higher
numbers. These factors contributed to strong performance in raw materials and component sales for automotive
industry both in Japan and overseas. However, domestic sales for the second half of the year fell sharply, owing to
the end of eco-car subsidies. As well, Japanese auto makers saw lower production in China due to anti-Japanesedemonstrations in that country. These factors led to lower net sales in Japan and China. However, strong
performance in North America and the ASEAN countries contributed to overall growth for the segment.
As a result, segment net sales for the fiscal year amounted to ¥83.06 billion, representing a ¥6.95 billion (9.1%)
increase year on year. Operating profit amounted to ¥760 million, a decline owing mainly to poor performance inthe energy business, despite profitability in export transactions in the fourth quarter due to the weakened yen. This
result was ¥170 million lower (18.4%) than the prior fiscal year.
Life & Healthcare
Consolidating the functional saccharides business of Hayashibara (acquired during the previous fiscal year; net
sales of ¥24.41 billion for the fiscal year ended March 2013), the Company saw significant overall growth in thissegment.
Sales in the fine chemicals business grew overall compared to the prior fiscal year. Sales of pharmaceutical raw
materials and intermediates were level year on year, while in vitro diagnostics and medical materials experienced
strong performance. Functional saccharide sales performed well, particularly sales of trehalose for the foodindustry. We also saw strong sales of enzyme and fermentation products in the food and starch saccharide market.
Our beauty care products business includes sales of cosmetics and health foods. New product launches in healthfoods and whitening cosmetic products led to sales growth for the year. However these gains were more thanoffset by lower year-on-year sales of cosmetics products introduced during the prior fiscal year.
As a result, segment net sales amounted to ¥71.68 billion for the fiscal year, which was a ¥22.51 billion (45.8%)
increase year on year. Operating profit amounted to ¥3.98 billion, representing a ¥3.27 billion (464.1%) increase
year on year. This gain in operating profit was mainly due to the new consolidation of Hayashibara's functionalsaccharides business.
Other
No special matters to disclose.
(Forecast for the Fiscal Year Ending March 2014)(Millions of yen)
Net sales

Operating profit

Ordinary income

Net income

Year ending March 31, 2014

764,000

19,20021,00014,500Year ended March 31, 2013

666,272

15,57817,927

14,182

Change+14.7%+23.2%+17.1%+2.2%-4-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

a. Performance Forecast for the Fiscal Year Ending March 2014
Taking into account the weakened yen and related export growth, increased activity at Japanese manufacturers, animproving economy, and stock price rebounds, we expect more positive consumer sentiment in fiscal 2013. At thesame time, we believe that business in North America and ASEAN countries will stabilize. In contrast, thelong-lived financial crisis in the European Union has no apparent end in sight, causing concerns about intra-Union
commerce and product exports to the region.
In light of these conditions, we have set expectations for earnings at ¥764.0 billion in consolidated net sales(14.7% year-on-year growth), with gross profit at ¥93.4 billion (13.1% increase). Despite a projected increase inretirement benefits for employees associated with amortizing actuarial differences in retirement benefit
obligations, we expect net sales and gross profit growth to drive operating profit gains. As such, we have set
operating profit projections at ¥19.2 billion (23.2% year-on-year increase), with ordinary income projected to be¥21.0 billion (17.1% increase). We have set net income expectations at ¥14.5 billion (2.2% increase), since we do
not foresee any special factors (e.g. last fiscal year's added deferred tax assets) affecting net profits.
The figures above have been calculated using a currency conversion rate of ¥95 to the US dollar.
b. Forecast by Business Segment
We have moved certain businesses to other segments for the next-period operations. We have moved abrasives
sales business for the semiconductor and HDD industries formerly under the Functional Materials segment to theElectronics segment, which is positioned closer to the end user. This should allow us to develop new markets andapplications for these products. We have also moved raw materials sales business for the cosmetics industry
formerly under the Functional Materials segment to the Life & Healthcare segment. We believe this will help theCompany produce synergistic effects with the newly acquired Hayashibara products.
We have calculated next-period figures and current-period ratios reflecting these organizational changes.
In addition to growth in the smartphone and tablet markets, we project a recovery in production units for officeequipment, appliances, and automobiles. Given this, we expect to see an increase in sales for related parts andcomponents. Accordingly, we forecast net sales of ¥181.0 billion (9.2% year-on-year increase) in Functional
Materials, ¥255.0 billion (18.9% increase) in Advanced Materials & Processing, ¥149.0 billion (19.7% increase) inElectronics, ¥94.0 billion (13.2% increase) in Automotive & Energy, and ¥84.0 billion (8.4% increase) in Life &Healthcare.
Next-period forecasts are based on information available at the time they were calculated. Actual future earnings
may differ from forecast due to a variety of factors, including, but not limited to, overseas and domestic businessconditions, foreign exchange rate fluctuations, etc.
(Millions of yen)FYE March 2013
Actual (before
reorganization)FYE March 2013
Actual (after
reorganization)FYE March 2014
Forecast

ChangeFunctional Materials

180,025

165,812

181,000+9.2%

Advanced Materials &Processing

214,546

214,546

255,000+18.9%

Electronics

116,105

124,488

149,000+19.7%

Automotive & Energy

83,06883,06894,000+13.2%

Life & Healthcare

71,68577,51684,000

+8.4%

841

841

1,000

+18.9%

666,272

666,272

764,000+14.7%

Other
Total Sales-5-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(2) Analysis of Financial Positiona. Summary of Consolidated Balance Sheets
As of the end of the fiscal period, current assets amounted to ¥305.75 billion. This represents an increase of ¥23.47
billion compared to the end of the prior consolidated fiscal year. This increase was mainly due to increases in cash
and time deposits resulting from accumulated liquidity on hand and increases in inventories. Non-current assets
increased ¥12.43 billion compared to the end of the prior fiscal year, reaching ¥180.99 billion. This increase wasmainly due to increase of property, plant and equipment (purchases of land and buildings) and increased
investments in securities stemming from market price recoveries. As a result, total assets at the end of the fiscal
year amounted to ¥486.74 billion, which was an increase of ¥35.9 billion compared to the end of the prior fiscal
year.
Despite a decrease in loans, unsecured bond issuances led to a ¥10.84 billion increase in liabilities over the end of
the prior fiscal year. At the end of the consolidated fiscal year, the Company had ¥248.94 billion in liabilities.
Net assets amounted to ¥237.8 billion at the end of the consolidated fiscal year, representing an increase of ¥25.06
billion compared to the end of the prior year. This increase was mainly due to the Company's recording ¥14.18
billion in net income and improved translation adjustments stemming from the weakened yen.
As a result, the Company experienced a 1.5-point increase in shareholders' equity ratio, up to 46.9% as of the endof the consolidated fiscal year.
b. Summary of Consolidated Cash Flows
Cash and cash equivalents (“Cash”) increased by ¥12.66 billion compared to the prior fiscal year. Cash fromoperating activities amounted to ¥18.57 billion. Cash used in investing activities amounted to a net outflow of¥9.52 billion, while cash from financing activities amounted to ¥1.16 billion. The Company saw an additional¥910 million in new funding via newly consolidated entities and also recorded an increase in cash flows of ¥3.72
billion due to changes in fiscal years of consolidated subsidiaries. As a result, consolidated Cash increased by¥17.29 billion (+60.7%) compared to the end of the prior consolidated fiscal year, amounting to a total of ¥45.81
billion.
(Cash Flows from Operating Activities)
Cash flows from operating activities for the consolidated fiscal year amounted to ¥18.57 billion. This increase wasmainly due to net income before income taxes and minority interests of ¥19.45 billion, offsetting ¥6.38 billion inincome tax payments. In addition, the Company recorded ¥7.44 billion in depreciation and amortization, which
has no effect on cash flows.
(Cash Flows from Investing Activities)
Cash used in investing activities during the consolidated fiscal year amounted to ¥9.52 billion. The Group sold¥3.23 billion in property, plant, and equipment, but paid ¥12.26 billion for tangible and intangible fixed assets
during the period.
(Cash Flows from Financing Activities)
Cash flows from financing activities for the consolidated fiscal year amounted to ¥1.16 billion. This result was
mainly due to cash inflow from unsecured corporate bond issuances in the amount of ¥29.85 billion, offset by
repayments of loans in the amount of ¥27.83 billion.

-6-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

FYE March
2009

FYE March
2010

FYE March
2011

FYE March
2012

FYE March
2013

Net worth ratio

54.1%

53.1%

53.7%

45.4%

46.9%

Net worth ratio based on market
value

28.7%

40.8%

33.9%

29.2%

29.9%

0.9 years

0.8 years

2.5 years

15.6 years

5.3 years

36.0

44.7

19.5

8.9

17.7

Interest-bearing debt to cash
flow ratio
Interest coverage ratio(Notes) Net worth ratio: Equity capital/total assets
Net worth 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* Indicators are calculated based on consolidated figures.
* 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).
* Operating cash flow is net cash provided by operating activities as shown in the consolidated statements of cash
flows. Interest-bearing debt is all liabilities for which interest is payable as presented in the consolidated balance
sheets. Interest payments are the amount of interest paid as presented in the consolidated statements of cash
flows.

(3) Dividend Policy and Dividends for the Fiscal Years Ended March 2013 and March 2014
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 consolidated payout ratio and consolidated dividend to equity ratio. We also plan to use funds
from internal reserves effectively in our business activities and to build a stronger management foundation.
The Nagase Group declared a year-end dividend of ¥13 per share based on this policy, resulting in a scheduled
full-year cash dividend of ¥26 per share.
We forecast a full-year dividend of ¥28 per share for the next fiscal year, consisting of a ¥14 per share interim
dividend and a ¥14 per share year-end dividend.

(4) Operating and Other Risks
The Nagase Group is engaged in trading, marketing, research and development, manufacturing and processing insix business segments across the world: Functional Materials, Advanced Materials & Processing, Electronics,
Automotive & Energy, Life & Healthcare, and Other. The nature of these businesses entails various risks that may
have a material effect on investment decisions. We provide a discussion of the major risks below.
Any forward-looking statements are based on management decisions as of the end of fiscal year under review.
a. Overall Operating Risk
The Nagase Group is engaged in activities that rely on the use of chemicals across a wide spectrum of products
and services through our Functional Materials, Advanced Materials & Processing, Electronics, Automotive &Energy and Life & Healthcare business. These products and services include dyes/pigments, coating
materials/inks, surfactants, OA, electrical equipment, home electronics, automobiles, LCDs, semiconductors, andpharmaceutical/medical applications. Accordingly, significant changes in domestic and international commercial
chemicals industry could affect the Nagase Group's earnings and financial condition.

-7-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013b. Product Market Conditions
The Nagase Group relies heavily on petrochemicals manufactured from naphtha in our Functional Materials,
Advanced Materials & Processing, and Automotive & Energy segments. Raw materials markets anddemand-supply balance are two factors that result in unique market circumstances for each of our products.
Fluctuations in these factors could affect our revenues and profits in related product lines. Some products
manufactured by the Group use raw materials derived from grains. Raw materials costs fluctuate widely due tochanges in grain market prices; we may not be able to pass on increased raw materials costs through higher sales
prices, which could affect our profits in related product lined.
c. Impact of Fluctuations in Foreign Currency Exchange Rates
The Nagase Group conducts import/export as well as non-trade business transactions denominated in foreign
currencies. Fluctuations in currency markets have a significant impact when prices are converted to yen. While theGroup executes exchange contract hedges for these transactions to minimize exchange rate risk to the greatest
extent possible, currency exchange rate fluctuations could have a significant impact on Group earnings andfinancial conditions. The Nagase Group owns foreign-domiciled corporations whose financial statements areprepared using local currencies. The conversion of these currencies to Japanese yen for consolidated reporting
purposes entails currency conversion risk due to fluctuating exchange rates.
d. Impact of Fluctuations in Interest Rates
The Nagase Group obtains funds for operating and financing activities through loans from financial institutions;some of these loans are interest-bearing debt including variable interest terms. The Group reduces interest rate
fluctuation risk related to variable interest loans by utilizing interest-rate swap contracts. Group earnings andfinancial conditions may be affected by future interest rate trends.
e. Risks Involved in Operating Overseas
A significant and increasing percentage of Nagase Group sales and manufacturing are conducted overseas inlocations such as China, Southeast Asia, Europe, and the United States. While Group management keeps a close
eye on local trends and conditions in order to respond appropriately, unforeseen events stemming from local
government regulations, business customs, or other influences could have a significant impact on Group businessperformance and financial conditions.
f. Impact of Changes in Stock Prices
The Nagase Group maintains a portfolio of marketable securities, primarily equity shares of companies doing
business with the Group. These equity investments are subject to share price fluctuation risks. As a matter ofpolicy, the Nagase Group reduces risk by continuously reviewing and reorganizing its shareholdings. However,changes in share prices could impact Group earnings and financial condition. A decline in share prices could
damage the value of pension plan assets managed by the Group, increasing retirement benefit costs and thereby
reducing Group profits.
g. Counterparty Credit Risk
The Nagase Group extends credit to domestic and overseas purchasers in connection with various transactions. Asa matter of policy, the Nagase Group reduces credit risk by obtaining guarantees and collateral according to thefinancial condition of the purchaser. Although the Nagase Group strives to ensure stable, uninterrupted productprocurement, financial weakness or bankruptcies among suppliers or others could damage the Group's ability to
procure goods. Such circumstances could have a significant impact on the Group's earnings and financial
condition.
h. Risk of Investments
The Nagase Group business is based on brokered transactions. At the same time, the Group continues to look for
new high-value business opportunities. Accordingly, we support the Nagase R&D Center and domestic-8-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

manufacturing subsidiaries in their pursuit of new business through proactive investment and strategic mergers andacquisitions, using advanced technologies and information-gathering capabilities as leverage.
As a result of pursuing new business, the Group will be exposed to greater risk than were we to follow a
conventional brokered business model. The book value of business assets and intangible fixed assets (goodwill,etc.) when acquiring other companies becomes an important management topic. If future cash flows from new
businesses underperform projections, and the Group records correlating impairment losses, such losses may have asignificant impact on Group earnings and financial condition.
i. Product Quality Risk
The Nagase Group operates the Nagase R&D Center and domestic manufacturing subsidiaries to offer
high-value-added products to our customers. We pay detailed attention to the quality of the technologies andproducts that bear the name of Nagase and our affiliates. We also bear manufacturers' liability for products that we
handle as an importer, and accordingly treat these products with the same attention to detail and quality as if they
were made in our own facilities. However, product defects could result in cessation of sales and/or product recalls,
exposing the Nagase Group to liability for damages, which could have a significant impact on Group earnings andfinancial conditions.
j. Risks of Handling Various Chemicals
The Nagase Group imports and exports a variety of chemicals in the performance of our main business lines. To
maintain international peace and safety, the chemicals we export are subject to different laws, including theForeign Exchange and Foreign Trade Control Law and the Export Trade Control Order. Imports are subject to theChemical Substances Control Law and other related statutes. To ensure compliance, the Group has established the
Security Trade Control Committee and the Item Compliance Committee. While these committees are charged withassuring compliance to both Japanese law and the various chemical control regulations of China, Southeast Asia,
Europe, the United States and other regions, violation of such laws and statutes could result in restrictions onGroup business activities, having a significant impact on Group earnings and financial condition.
k. Risks of Natural Disasters
The Nagase Group has put emergency response systems in place, including the creation of a business contingency
plan, the adoption of safety confirmation systems, the creation of a disaster-response manual, earthquake-response
measures, disaster-response training, and other measures to deal with natural disasters. However, as we conductbusiness across a great number of countries and regions, we are exposed to the risk of major natural disasters,
H1N1 influenza and other communicable diseases, and other emergencies that could disrupt our supply chain.
Such disruptions could prevent us from selling our products or damage the manufacturing capabilities of importantGroup facilities. Such interruptions would result in opportunity loss, and could have a significant impact on Groupearnings and financial condition.

-9-

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

2. Management Policies(1) Basic Management Policy<Management Philosophy>
The Nagase Group is a member of the world society. As such, it is our duty to maintain good and fair businesspractices and, through continued growth and development, provide society with the goods and services needed
while improving the welfare of our employees.
Consistent with this management philosophy, we believe our most important goal is to contribute to society,including efforts to maintain good and fair business practices, while ensuring continued growth and development.
Guided by our Group slogan to be a “technology- and intelligence-oriented company that turns wisdom intobusiness,” we strive to become a unique company that combines the functions of a trading company with that ofmanufacturing, taking advantage of technologies and wisdom, tempered by experience. We will continue to createstronger functions and offer better business solutions as we become our customers' partner of choice in business.

(2) Management Objectives and Medium-Term Strategies
Based on this management philosophy, we created the following objectives and strategies as we work toward our
vision for the future.
• Allow stakeholders to realize their dreams and ideals through our business• Continue to grow and increase value, using our strengths in technology• Anticipate changes in the market structure and environment, growing together with our customers as we offer
unique solutions• Contribute to making a better society and global environment
The Nagase Group believes that we must further accelerate the organizational and operational changes we pursued
to date under our “CHANGE” 11 medium-term business plan. This is the only way that we can reach our vision
for Nagase in a business environment where structural and qualitative changes are happening faster every day.
Based on the recognition, the Company launched our Change-S2014 three-year medium-term business plan in
April 2012 and we have positioned the business plan as to promote Acceleration of Change.
Under Change-S2014, our basic strategic goals are to accelerate the improving quality of our business andoperations (Speed up), to bring e total strength of the Nagase Group to bear throughout the value chain in our
strategic markets (Step up), and to expand our unique solutions globally, creating sustained growth (Sustainablegrowth). Executing on these basic strategies, the Company reorganized four business segments away from productcategories, reflecting the respective positions of each business in the value chain, as well as with the most closelyaligned industries. This realignment has resulted in five segment categories: Functional Materials (located at the
top of the value chain), Advanced materials & Processing (located in the next stage of the value chain),Electronics, Automotive & Energy, and Life & Healthcare (these last three segments functioning across allindustries). The Company is working to accelerate“ CHANGE”, guided by a goal to promote globalization andcreate high-value-added businesses. We plan to take maximum advantage of our Group strengths, improving
existing businesses and creating new ones in the Bio, Environment and Energy, and Electronics fields. We will
combine segment functions with our Group-wide foundation of technologies as one means to put ourcomprehensive capabilities to best use.
Another task for the Group is to improve our management foundation in order to respond to the changing external
environment and evolution of the Group's business structure.
We have set performance indicators to achieve in the final year (fiscal year ending in March, 2015) of ourChange-S2014 plan: Consolidated net sales of ¥800 billion, consolidated operating profits of ¥30 billion and a- 10 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

return on equity of 8.0%. We will also be investing ¥40 billion in certain areas over the three years of this plan toachieve qualitative change in our operations and to grow our business.

(3) Issues to be Addressed by the Company
We began executing on our new Change-S2014 three-year plan in April 2012. Under this plan, we have definedGroup-wide initiatives to address issues of creating stronger capabilities in core businesses and a stronger
management foundation, based on the strategies outlined above.
[Stronger Capabilities in Core Businesses]a. Fields Utilizing Bioscience Technologies
Working from the Hayashibara business, we will create a quicker feedback loop from the market through the
integration of the Nagase Group research and development and sales functions. Our goal is to create highly
original bio-related products, expanding sales of the same throughout the world, which will lead to stronger
competitive position and higher growth in the medical, food, health and beauty markets within our Life &Healthcare business.
We have also identified potential applications of bio-related technologies for general commercial use and uses inlong-term renewable resources.
The Company experienced strong sales of core Hayashibara products in the food industry, as well as thedevelopment and launch of new products. We have also worked to build a more robust sales structure overseas for
Hayashibara products and to revise our sales agent policies. Local entities have started their own marketing andsales activities, which has been factor in accelerating our global growth.
One area of bio-related technologies we are working on relates to the development of bio-derived chemicals that
do not rely on petroleum resources. We have been working together with Kobe University and other labs in anext-generation agri-industrial bio production project. This project was adopted by the Ministry of Education,
Culture, Sports, Science and Technology as a continuing program to run through fiscal 2018. The Nagase R&D
Center leads this program in promoting biotechnology research and development activities.
b. Fields Utilizing Environment/Energy-Related Technologies
The Nagase Group is creating a new business model anticipating global technological innovations in green energy,
bringing our entire force to bear in businesses focused on friendly manufacturing (using electricity generated fromPV, wind power, and other renewable sources), smart grids, and energy conservation systems, as well as
next-generation automobiles that make smart use of resources.
We are also advancing research into reducing the environmental burden of business, such as chemical recycling
and creating lighter components for automobiles.
The start of the feed-in tariff scheme for renewable energy this fiscal year was a factor in strong solar powersystem sales by the Company.
The Group's Captex subsidiary manufactures and sells rechargeable battery systems equipped with lithium-ion
rechargeable batteries. The company's factory began full-scale production at its plant in Okazaki (Aichi
Prefecture) in April 2012; however, the market became much more competitive due to new entrants, lower costs,
and other factors. The company plans to introduce a smaller model in June 2013, as well as speed new
development based on in-house technologies.
c. Fields Utilizing Electronics-Related Technologies
The electronics field is one of rapid technological innovation and structural change. Here, our goal is to expand
our business by offering highly innovative technologies, products, and services that meet the needs of ourcustomers.
- 11 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

To accelerate the pace of growth in the global market, we will create more nimble manufacturing and development
capabilities overseas.
During the period, the Group saw strong performance in sales for smartphone and tablet components, thanks inpart to global proposal/procurement strategies and products tailored to the needs of our customers in the market.
The Group's U.S. Engineered Materials Systems Inc. arm, acquired in January 2012, recorded strong sales ofconductive materials used on electronics components for tablets, contributing to Group profits for the fiscal year.
In China, Nagase ChemteX (Wuxi) Corp. committed to building a research and development facility for
expanding the company's ability to offer product functions meeting the needs of the local market. The facility is
expected to come online sometime during fiscal 2013.
[Stronger Management Foundation]
Where the Japanese market has slowed compared to the growing markets in emerging countries, the Nagase Grouphas chosen to focus expanding business in emerging and other international markets, establishinghigh-value-added businesses using our manufacturing and processing functions. Through investments in
manufacturing, we have increased Group-wide manufacturing and processing bases in Japan and around the world,changing the fundamental shape of internal risk in the Group's manufacturing businesses.
To respond to these internal and external changes, we are engaged in creating a stronger consolidated management
structure, building more mature risk management policies, and developing higher-caliber human resources.
With respect to stronger consolidated management structure, we continue build a more efficient Groupmanagement structure, encourage personnel interchange within the Group, and improve our IT infrastructure. To
ensure a sound financial foundation, we are working to balance liabilities and equity at prudent levels, while
keeping an eye open for any changes in our credit rating. At the same time, we are improving our ability toforecast present and future operating cash flows to balance investment (risk assets) and operating cash flows
properly. From a perspective of efficient asset utilization, we are replacing older assets with newer, more
profitable assets.
In terms of risk management, we are in the process of putting stronger systems into place for internal controls, risk
management, and transaction risk control (as a manufacturer) across the Group's companies.
We are also in the process of establishing a stronger Group management foundation through hiring, training, andutilizing a talented workforce that can respond to the diverse demands of our businesses.
During the period, the Company secured funds through long-term debt and corporate bonds to acquire
Hayashibara without damaging the Company's credit rating. Nagase also sold off idle assets, investment securities,
and other assets to replace less-effective assets.
The Company established Investment Guidelines to clarify corporate investment standards and speed thedecision-making process. At the same time, the Company improved its monitoring of investment performance.
As one way to practice stronger risk management, Nagase started a system for visualizing and reducing risks. This
new system should provide the Company with improved transaction risk management from the standpoint of amanufacturer.
In terms of human resources development, Nagase is actively promoting a program of staff sharing among related
firms, affiliates, and local overseas entities, while also improving existing Group-wide staff programs.

- 12 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2012)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
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)Land
Others
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 loan receivable
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 13 -

Current Consolidated
Fiscal Year
(March 31, 2013)

29,184
197,70241,087
1,292
2,879
4,067
7,299
(1,235)282,280

46,693
196,001
47,104
1,554
3,204
4,282
7,967
(1,057)305,751

45,398(24,445)
20,952
51,992(42,856)
9,136
18,52324,282(16,168)
8,114
56,72750,057(26,156)
23,90057,047(45,688)
11,35819,441
22,676(16,409)
6,266
60,96732,07921,6693,705
57,45430,72620,093
4,475
55,29549,014
1,122
896
3,612
(266)
54,379168,561
450,842

56,870
837
2,249
5,067
(289)
64,734
180,996486,747

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2012)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term debt
Accrued income taxes
Deferred tax liabilities
Provision for bonuses
Provision for officer bonuses
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term debt
Deferred tax liabilities
Accrued retirement benefits for employees
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)
Unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Total accumulated other comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets- 14 -

Current Consolidated
Fiscal Year
(March 31, 2013)

109,163
38,633
11,551
3,170
50
3,632
198
15,290181,689

107,941
25,061
10,408
2,947
21
3,968
219
15,244
165,812


38,2007,251
10,032922
56,407238,097

30,00032,6149,251
10,283980
83,129248,941

9,699
10,041
186,907(5,460)201,188

9,699
10,041
199,160(7,109)211,792

12,731(21)(9,191)
3,518
110
7,927
212,744
450,842

17,943(6)(1,223)
16,71250
9,250
237,806
486,747

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

Prior Consolidated
Fiscal Year
(April 1, 2011 March 31, 2012)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
Employee salaries
Provision for accrued bonuses for employees
Provision for accrued bonuses for directors
Depreciation and amortization
Retirement benefit expenses
Provision for retirement benefits for directors
Allowance for doubtful accounts
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Divided income
Rent income
Investment profit on equity method
Foreign exchange gain
Other
Non-operating income, total
Non-operating expenses
Interest expenses
Other
Non-operating expenses, total
Ordinary income
Extraordinary gains
Gain on sale of non-current assets
Gain on sale of investment securities
Other
Total extraordinary gains- 15 -

631,854560,226
71,628666,272
583,689
82,583

8,768
18,233
2,156
198
3,056
1,837
57
433
151
23,30958,20013,427

10,013
19,637
2,530
225
3,971
1,992
51
(36)
1,612
27,00567,004
15,578

268
1,018
260
368
694
874
3,485

203
1,212
292
933
548
630
3,822

692
529
1,221
15,690

1,099
373
1,472
17,927

16
1,759
129
1,905

3,358
801
305
4,464

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Millions of yen)
Prior Consolidated
Fiscal Year
(April 1, 2011 March 31, 2012)
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
Other
Total extraordinary losses
Net income before income taxes
Income taxes
Deferred taxes
Total income taxes
Net income before minority interests
Minority interests
Net income

5
172
455
5
383
36
1,058
16,536
6,980
118
7,098
9,438
867
8,570

- 16 -

Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)
98
196
1,896
0
45
695
2,934
19,4586,417(2,004)
4,413
15,044862
14,182

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Consolidated Statement of Comprehensive Income)(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

Prior Consolidated
Fiscal Year
(April 1, 2011 March 31, 2012)
Net income before minority interests
Other comprehensive income
Unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income, parent company
Comprehensive income, minority interests- 17 -

9,438

15,044(456)(13)(1,626)

5,212
15
6,181

(58)

768

(2,155)
7,282

12,17827,222

6,518
764

25,674
1,548

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(3) Consolidated Statement of Change in Shareholders’ Equity(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

Prior Consolidated
Fiscal Year
(April 1, 2011 March 31, 2012)
Shareholders’ equity
Common stock
Balance, beginning of period
Changes
Total changes
Balance, end of period
Capital surplus
Balance, beginning of period
Changes
Disposal of less treasury stock
Total changes
Balance, end of period
Retained earnings
Balance, beginning of period
ChangesCash dividends
Net Income
Changes in scope of consolidation
Changes in scope of equity affiliates
Changes accompanying changes in fiscal years ofconsolidated subsidiaries
Total changes
Balance, end of period
Treasury stock
Balance, beginning of period
Changes
Purchases of treasury stock
Disposal of treasury stock
Total changes
Balance, end of period
Total shareholders’ equity
Balance, beginning of period
ChangesCash dividends
Net income
Purchases of treasury stock
Disposal of treasury stock
Changes in scope of consolidation
Changes in scope of equity affiliates
Changes accompanying changes in fiscal years ofconsolidated subsidiaries
Total changes- 18 -

9,699

9,699

－
9,699

－
9,699

10,041

10,0410
0
10,0410
0
10,041

181,665

186,907(3,212)
8,570
(118)
3

(3,189)14,182
(66)
717



609

5,241
186,907

12,253
199,160(5,460)(5,460)(0)0(0)(5,460)(1,649)0(1,649)(7,109)195,946

201,188(3,212)
8,570
(0)
0
(118)
3

(3,189)14,182(1,649)
0
(66)
717



609

5,242

10,604

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

Prior Consolidated
Fiscal Year
(April 1, 2011 March 31, 2012)
Balance, end of period
Accumulated other comprehensive income (loss)
Unrealized holding gain on securities
Balance, beginning of period
Changes
Changes other than shareholders’ equity accounts(net)
Total changes
Balance, end of period
Deferred (loss) gain on hedges
Balance, beginning of period
Changes
Changes other than shareholders’ equity accounts(net)
Total changes
Balance, end of period
Translation adjustments
Balance, beginning of period
Changes
Changes other than shareholders’ equity accounts(net)
Total changes
Balance, end of period
Total accumulated other comprehensive income
Balance, beginning of period
Changes
Changes other than shareholders’ equity accounts(net)
Total changes
Balance, end of period
Stock acquisition rights
Balance, beginning of period
Changes
Changes other than shareholders’ equity accounts(net)
Total change
Balance, end of period
Minority interests
Balance, beginning of period
Changes
Changes other than shareholders’ equity accounts(net)
Total changes
Balance, end of period- 19 -

201,188

211,792

13,18812,731

(457)

5,211

(457)
12,731

5,211
17,943

(8)

(21)

(13)

15

(13)
(21)

15
(6)

(7,610)(9,191)(1,580)7,967(1,580)(9,191)

7,967(1,223)

5,570

3,518

(2,051)

13,194(2,051)
3,518

13,194
16,712

235

110

(124)

(60)

(124)
110

(60)
50

7,564

7,927

363

1,322

363
7,927

1,322
9,250

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2011 March 31, 2012)
Total net assets
Balance, beginning of period
Changes
Dividends of surplus
Net income
Purchases of treasury stock
Disposal of treasury stock
Changes in scope of consolidation
Changes in scope of equity affiliates
Changes accompanying changes in fiscal years ofconsolidated subsidiaries
Changes other than shareholders’ equity accounts (net)Total changes
Balance, end of period- 20 -

Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

209,316

212,744(3,212)
8,570
(0)
0
(118)
3

(3,189)14,182(1,649)
0
(66)
717



609

(1,813)
3,428
212,744

14,45725,061
237,806

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(4) Consolidated Statements of Cash Flows(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

Prior Consolidated
Fiscal Year
(April 1, 2011 March 31, 2012)
Cash flows from operating activities
Net income before income taxes
Depreciation and amortization
Amortization of goodwill
Impairment loss
Provision for retirement benefits for employees (decrease)
Interest income and dividend income
Interest expenses
Foreign exchange loss (gain)
Loss (gain) on sale of non-current assets
Loss (gain) on sale of investments securities
Loss (gain) on valuation of investments securities(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payableOther
Sub totalInterest and dividends received
Interest paid
Taxes paid
Cash flows from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Cash from sales of property, plant and equipment
Payment for acquisition of intangible fixed assets
Purchases of investment securities
Cash from sale of investment securities
Cash paid for equity investments
Payment for acquisitions
Proceeds from sales of shares of consolidated subsidiaries
accompanying changes of scope of consolidation
Change in short-term loans (increase)
Other
Cash flows from investing activities- 21 -

16,536
7,272
151
455
974
(1,286)
692
(9)
(11)
(1,753)383(10,120)(7,417)
6,712
111
12,6891,467(637)(7,829)5,690

19,458
7,445
1,612
1,896
205
(1,416)
1,099(1,032)(3,259)(800)
45
10,357(1,490)(8,771)(1,061)
24,2891,724(1,050)(6,387)
18,576(11,215)46(1,420)
(914)
2,151
(686)
(67,774)(10,551)
3,235(1,709)
(214)
1,200
(646)


537



(175)
(1,615)(81,066)

(380)
(464)
(9,529)

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2011 March 31, 2012)
Cash flows from financing activities
Increase (decrease) in short-term loans, net
Proceeds from long-term loans
Repayment of long-term debt
Proceeds from issuance of bondPurchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other
Cash flows from financing activities
Effects of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase in cash and cash equivalents accompanying
consolidation
Increase (decrease) in cash and cash equivalents
accompanying changes in fiscal years of consolidated
subsidiaries
Cash and cash equivalents, at end of the period- 22 -

Current Consolidated
Fiscal Year
(April 1, 2012 March 31, 2013)

22,97639,257(1,527)
0(3,212)(401)(130)
56,961(16,273)
4,665(11,564)
29,855(1,649)(3,189)
(540)
(139)
1,164

(434)

2,451

(18,849)
47,202

12,66228,517

165

915



3,721

28,51745,816

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(5) Assumption for Going Concern
No matters to report.

(6) Changes in Basic Matters related to the Preparations of Consolidated Financial Statements(Change in the Scope of Consolidation or Application of Equity Method Accounting)1)

Number of consolidated subsidiaries
(New)

61
6

Beginning with the consolidated fiscal year under review, the Company has included Nagase Tool Matex Co., Ltd.
and five other companies into its consolidation. This policy change has been made to allow the Company to moreaccurately understand Group performance, to allow for timelier implementation of management policies, and toprovide more appropriate information disclosure.
2)

Number of affiliates accounted under the equity method
(New)

21
11

Beginning with the consolidated fiscal year under review, the Company has included OnFine Co., Ltd. and 10
other entities as equity method affiliates. This policy change has been made to allow the Company to moreaccurately understand Group performance, to allow for timelier implementation of management policies, and toprovide more appropriate information disclosure.
Nagase Colors & Chemicals Co., Ltd., an equity method affiliate, merged with and absorbed equity method
affiliate ON Co-Labo Corporation on April 1, 2012. The resulting entity has been called Nagase-OG Colors &Chemicals Co., Ltd..
(Changes in Matters related to Subsidiary Fiscal Year Ends)
Beginning with the consolidated fiscal year under review, the Company changed the December fiscal year ends of
22 subsidiaries (February fiscal year end for TOTAKU INDUSTRIES, INC.) to match that of the parent company.
This policy change has been made to allow the Company to more accurately understand Group performance, toallow for timelier implementation of management policies, and to provide more appropriate information
disclosure. For the 10 overseas consolidated subsidiaries and three equity method affiliates required to have
December fiscal year ends according to local statutes, the Company had been making adjustments necessary forGroup consolidation, taking into account major transactions occurring before the parent company fiscal year-end.
The Company has now adopted a consolidation method to produce financial statements via provisional accountsettlements as of the consolidation date.
The Company recorded income statement results between January 1, 2012 (March 1, 2012 for TOTAKUINDUSTRIES, INC.) and March 31, 2012 associated with these changes as increases in retained earnings.
Changes in cash and cash equivalents are presented in “Increase (decrease) in cash and cash equivalents
accompanying changes in fiscal years of consolidated subsidiaries.”(Changes in Accounting Policies which are Difficult to Distinguish from Changes in Accounting Estimates)
Changes in Depreciation Method for Property, Plant and Equipment
Effective April 1, 2012, the Company and its domestic consolidated subsidiaries have changed their depreciation
method for property, plant and equipment, except for buildings acquired on or subsequent to April 1, 1998, to thestraight-line method. Previously, the declining-balance method had been principally applied by the Company andits domestic consolidated subsidiaries, and the straight-line method had been applied principally by the Company's
overseas subsidiaries.
Under the “CHANGE” 11 medium-term business plan (from the year ended March 31, 2010 to the year ended
March 31, 2012), the Company and its consolidated subsidiaries (collectively, the “Group”) had been engaged in- 23 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

building stronger research, development, and manufacturing functions. In addition, the current “Change-S2014”
medium-term business plan (from the year ended March 31, 2013 to the year ending March 31, 2015), keeps theGroup’s attention focused on these same areas, while calling for significant increase in capital investment.
With increased capital investment, greater investment in group manufacturing companies, and full-scale operationsof manufacturing facilities from the year ended March 31, 2013, the Company has reexamined its depreciation
policies for property, plant and equipment. As a result, the Company concluded that adopting the straight-line
method to allocate depreciation expense evenly over the estimated useful lives of property, plant and equipment
would more appropriately reflect the actual characteristics of the Group’s business considering that manufacturing
facilities and equipment will likely be used consistently and reliably over the estimated useful lives.
As a result of this change, depreciation expense decreased by ¥2,138 million ($22,733 thousand), operating
income increased by ¥1,896 million ($20,159 thousand) and income before income taxes and minority interests
increased by ¥1,918 million ($20,393 thousand) for the year ended March 31, 2013, from the corresponding
amounts which would have been recorded under the previous depreciation method.
(Changes in Accounting Estimates)
Changes in Estimated Useful Lives of Property, Plant and Equipment
The Company and certain consolidated subsidiaries have changed the estimated useful lives of certain items ofproperty, plant and equipment beginning with the consolidated fiscal year under review.
In conjunction with these changes, depreciation and amortization for the consolidated fiscal year is ¥90 million
greater than calculations using prior estimates of useful lives. Operating profit, ordinary income, and net income
before income taxes were each comparatively lower by ¥88 million.

(7) Notes related to Consolidated Financial Statements(Segment Information, etc. )a. Segment Information
1 Reportable Segments
The Company’s reportable segments are those units comprising the Nagase Group for which separate financial
information is available and for which the board of directors make regular decisions regarding resource allocationand operating performance.
Beginning April 2012, the Company has been executing on the “Change-S2014” three-year business plan. To
accomplish the goals set out in this plan, beginning with the consolidated fiscal year under review, the Company
reorganized four business segments (Chemicals, Plastics, Electronics, and Life Sciences) away from productcategories into segments to more fully concentrate the strengths of our entire group, reflecting the respective
positions of each business in the value chain, as well as with the most closely aligned industries. This realignment
has resulted in five segment categories: Functional Materials (located at the top of the value chain), Advanced
Materials & Processing (located in the next stage of the value chain), Electronics, Automotive & Energy, and Life
& Healthcare (these last three segments functioning across all industries). Reportable segments have also been
reclassified to reflect this change.
Segment information for the prior consolidated fiscal year has been prepared under this new classification method.
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials, plastic
materials, plastic adhesives, industrial oil solutions, surfactants, fluorochemicals, encapsulment materials, silicone
materials, precision electronics abrasives, and more for the paints/inks, resins, urethane foam, organic synthesis,
surfactants, semiconductor, and HDD-related industries.
- 24 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

The Advanced Materials & Processing segment is engaged in the sales of dyestuffs, dyes, functional dyes,
information printing products, thermoplastic resins, thermosetting resins, synthetic rubber, inorganic materials,
plastics products, resins molding tools/dies, and external inspection equipment for the dye/additive, information
printing, textile processing, raw resin material, resin molding, functional film and sheet and other industries.
The Electronics segment is engaged in the sales of pre-processing materials and devices for LCD/semiconductors,
materials for LCD panels, materials and devices for semiconductor assembly, low-temperatures/vacuum
equipment, high-function epoxy resins, and more for the display, touch panel, LCD, semiconductor, electronic
components, heavy electrical, and other industries.
The Automotive & Energy segment is engaged in sales of plastic products, thermoplastic resins, thermosetting
resins, resins molding tools/dies, battery materials, solar cell/secondary battery-related materials, and more for the
automotive, automotive component, and energy industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials,
research products, in vitro diagnostics, enzymes, food additives, additives for cosmetics, and feeds/fertilizers forthe pharmaceutical, food, and cosmetics industries. In addition, this segment sells cosmetics, health foods, andbeauty foods directly to consumers.
2 Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Profit in reportable segments is defined as operating profit. Inter-segment profits and transfers are based on actual
market prices.

- 25 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

3 Information related to Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Prior Consolidated Fiscal Year (April 1, 2011 to March 31, 2012)(Millions of yen)
Reportable Segments
Corporate(Notes) 2

To
Consolidated
Adjustments
Financial(Notes) 3
Statements(Notes) 4

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

Total

Other
(Notes) 1

Total

177,126

217,929

110,495

76,11349,170630,835

1,018

631,854631,854

Intersegment
Sales/Transfers

5,449

2,224

710

1,967

629

10,982

5,369

16,352



(16,352)

Total

Net Sales
Sales toCustomers

182,576

220,154

111,206

78,08049,800641,818

6,388

648,207(16,352)

631,854

Segment Profit(Loss)

6,285

2,979

6,019

936

706

16,927141

17,068(4,477)835

13,427

Segment Assets

81,267

105,771

52,83434,795102,317

376,985

6,702

383,688

95,917(28,763)

450,842

Depreciation andamortization

599

693

1,927

530

813

4,564

343

4,908

2,363



7,272

Amortization of
Goodwill

1



23



126

151



151





151

Goodwill





1,884



30,19532,079

32,079

32,079Investments in
Equity Affiliates

367

233

103

726

1,598

3,028

1,725

4,753





4,753

Increase in
Property, Plant,
and Equipment
and Intangible
Fixed Assets

1,107

225

4,079

1,515

1,438

8,366

78

8,445

4,736



13,182

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

- 26 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

Current Consolidated Fiscal Year (April 1, 2012 to March 31, 2013)(Millions of yen)
Reportable Segments
Other(Notes) 1

Corporate(Notes) 2

To
Consolidated
Adjustments
Financial(Notes) 3
Statements(Notes) 4

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

Total

180,025

214,546

116,105

83,06871,685

665,431841

666,272

666,272

Intersegment
Sales/Transfers

4,904

2,182

733

1,384

452

9,657

5,523

15,180

(15,180)Total

184,929

216,728

116,838

84,453

72,138675,0886,364

681,453

(15,180)

666,272

Segment Profit(Loss)

5,428

2,386

6,297

763

3,986

18,862

265

19,127(3,672)

123

15,578Segment Assets

81,384

108,696

61,76037,387

95,735384,964

6,489

391,453

127,891(32,597)

486,747

Depreciation andamortization

434

537

1,508

250

2,025

4,756

202

4,959

2,486



7,445

Amortization of
Goodwill





96



1,516

1,612



1,612





1,612

Goodwill





2,046



28,67930,726



30,726



30,726

1,781

1,545

56

1,613

1,856

6,854

1,793

8,648





8,648

Total

Net Sales
Sales toCustomers

Other

Investments in
Equity Affiliates

Increase in
Property, Plant,
and Equipment
626
853
2,784
92
3,028
7,385
436
7,821
3,870
11,691and Intangible
Fixed Assets(Notes)1. Other is a business segment consisting of businesses not included in reportable segments, and includes distribution services, information
processing services, and professional services.
2. Corporate segment income represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment profit(loss) total, Corporate and Adjustments is equivalent to operating profit as presented in the consolidated statements
of income.
5. Beginning with the consolidated period under review, the Company and its domestic subsidiaries have changed from the declining balancemethod to the straight-line method for depreciating property, plant and equipment. With this change in accounting policy, segment income forthe consolidated fiscal year under review is ¥218 million higher in Functional Materials, ¥215 million higher in Advanced Materials &Processing, ¥778 million higher in Electronics, ¥170 million higher in Automotive & Energy, and ¥168 million higher in Life & Healthcare,and ¥344 million increase in Corporate than under the previous method.
6. The Company and certain consolidated subsidiaries have changed the estimated useful lives of certain items of property, plant and equipment
beginning with the consolidated fiscal year under review. In conjunction with these changes, segment income for the consolidated fiscal year is¥86 million lower in Electronics and ¥2 million lower in Automotive & Energy than calculations using prior estimates of useful lives.

- 27 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

b. Other Information
Prior Consolidated Fiscal Year (April 1, 2011 to March 31, 2012)
1 Products and Services
Omitted, since the same information has been disclosed under Segment Information.
2 Geographic Information(1) Net sales(Millions of yen)
Japan

China
366,369

Other
122,501

Total
142,983

631,854(Notes) Net sales are categorized by country or region, according to the location of the customer.

(2) Property, Plant and Equipment(Millions of yen)
Japan

Other
53,569

Total
3,158

56,7273 Major Customers
Information not presented here, since no single customer accounts for 10% or more of consolidated net sales.
Current Consolidated Fiscal Year (April 1, 2012 to March 31, 2013)
1 Products and Services
Omitted, since the same information has been disclosed under Segment Information.
2 Geographic Information(1) Net Sales(Millions of yen)
Japan

China
361,971(Note)

Other
133,076

Total
171,224

666,272

Net sales are categorized by country or region, according to the location of the customer.

(2) Property, Plant and Equipment(Millions of yen)
Japan

Other
54,619

3

Total
6,347

60,967

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

- 28 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

c. Impairment Losses of Non-current Assets for each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2011 to March 31, 2012)(Millions of yen)
Reportable Segments
Functional
Materials
Impairment

Electronics

Processing
loss(Notes)Advanced
Materials &

Automotive

Life && Energy

Healthcare


319

54

Corporate/

Other

Total

373

Elimination

Total



82

455

Electronics reflects the write-down to recoverable book value of commercial assets in association with the Company’s withdrawal from
LCD panel component processing operations in China.
Life & Healthcare reflects the write-down to recoverable book value for idle assets with significantly reduced market value.
Other reflects the write-down to recoverable book value for commercial assets in association with the Company’s partial withdrawal ofparking lot businesses operated by subsidiaries.

Current Consolidated Fiscal Year (April 1, 2012 to March 31, 2013)(Millions of yen)
Reportable Segments
Functional
Materials
Impairment
loss(Notes)Advanced
Materials &Electronics

Processing


1,359

326

Automotive

Life && Energy

Healthcare


211

Total

1,896

Corporate/

Other

Elimination





Total

1,896

Advanced Materials & Processing reflects the write-down to recoverable book value for manufacturing assets associated with thedecreasing profitability of plastics resin & material processing businesses and withdrawal from the business of manufacturing resin plastic
tray products for transport use in China.
Electronics reflects the write-down to recoverable book value of commercial assets associated with the withdrawal from the business forsemiconductor wafer plating and the withdrawal from the business for optical film processing for LCD displays in China.
Life & Healthcare reflects the write-down to recoverable book value of commercial assets associated with the increasingly unprofitable
pharmaceutical intermediates manufacturing business. This number also reflects the write-down to recoverable book value for idle assets
with significantly reduced market value.

- 29 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

(Per-Share Data)
Prior Consolidated Fiscal Year
(April 1, 2011 to March 31, 2012)

Current Consolidated Fiscal Year
(April 1, 2012 to March 31, 2013)

Net Assets per Share¥1,592.87 Net Assets per Share¥1,803.31

Earnings per Share¥66.69 Earnings per Share¥111.31

Diluted earnings per share not presented, as the Company does
not issue any stock with dilutive effects.

Diluted earnings per share not presented, as the Company does
not issue any stock with dilutive effects.

(Note) Basis for calculations
Earnings per share and diluted earnings per share
Current Consolidated
Fiscal Year
(April 1, 2012
to March 31, 2013)

Prior Consolidated
Fiscal Year
(April 1, 2011
to March 31, 2012)

Item

Net Income from consolidated statements of income (millionsof yen)

8,570

14,182

Net income related to common stock (millions of yen)

8,570

14,182

128,514,527

127,406,786

Major reason for increase in number of common shares used to
calculate diluted earnings per share (shares)
Stock acquisition rights

Dilutive stock not included in calculation of diluted earnings per
share (no dilutive effects)
Number of stock acquisition rights (units)

826

409

Average number of outstanding shares of common stock(shares)(Significant Subsequent Events)
No matters to report.

- 30 -

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013

4. OtherYear ended March 31, 2013 Financial Highlights (Consolidated)(Millions of yen)

[Sales in overseas markets]
Item

Current Consolidated Fiscal Year
Overseas Sales/
Consolidated
Sales (%)

AmountOverseas Sales

Prior Consolidated Fiscal Year

(Notes)Overseas Sales
Consolidated
Sales (%)

Amount1. Sales in overseas markets consist of net sales of theCompany and consolidated subsidiaries in othercountries or regions.

Change304,30145.7

265,484

42.0

38,816

175,965

26.4

155,692

24.6

20,272Southeast Asia

85,881

12.9

72,882

11.5

12,998

North America

25,423

3.8

21,236

3.4

4,186

Europe & Other

17,031

2.6

15,673

2.5

1,358

Northeast Asia

2. Major countries in each region(1) Northeast Asia················· Taiwan, China(2) Southeast Asia················· Singapore, Thailand(3) North America ················ U.S.
(4) Europe & Others ············· Germany(Millions of yen)

[Income (Loss)]
Item
Net sales

Current
Consolidated
Fiscal Year666,272

Prior
Consolidated
Fiscal Year

ChangeOverview

Change (%)

631,854

34,4185.4%

Functional Materials

180,025

177,126

2,899

Advanced Materials & Processing

214,546

217,929(3,383)

Electronics

116,105

110,495

5,609

Automotive & Energy

83,06876,113

6,954

Life & Healthcare

71,68549,17022,515

841

1,018

(177)

Other
Gross profit

82,583

71,628

10,955(Profit Ratio)(12.4%)(11.3%)

15.3%

Selling, general and administrative
expenses

67,00458,2008,804

Selling expense

10,013

8,768

1,245

Payroll

28,72026,3642,355

Depreciation and amortization

3,971

3,058

913

Amortization of goodwill

1,612

149

1,463

Other

22,686

19,8592,826

15,57813,427

Operating profit

2,151
16.0%

Financial Profit

316

594

(277)

Interest income

203

268

(64)

Divided income

1,212

1,018

194

Interest expenses

407

1,099

692

Other non-operating profit (Loss)

2,032

1,669

363

Ordinary income

17,927

15,6902,237

Extraordinary gains

4,464

1,905

Extraordinary losses

2,934

1,058

1,875

Total income taxes

4,413

7,098

(2,685)

Minority interests

862

867

(5)

14,182

8,570

14.3%

Net income

2,558

5,612
65.5%

[Net sales]
Functional Materials:

Advanced Materials & Processing:Electronics:

Automotive & Energy:Life & Healthcare:

Sales declined in Japan and Northeast Asia; however, Southeast Asia
experienced sales growth. The performance chemical business grew,
while the specialty chemicals business recorded a decline in sales.
The office automation and customer electronics business saw higher
sales of synthetic resins and increasing exports of molding tools to Asia.
Business related to dyes/additives and information printing materials
business saw lower year-on-year sales.
The electronic materials business experienced lower performance ofliquid crystal films and LED-related components. In contrast, sales oftouch panel products experienced year-on-year growth. In the electronic
chemicals business, the Company saw strong performance in formulated
epoxy resins, but lower sales in chemicals used in the manufacturer ofsemiconductors and LCD panels.
Domestic, North American, and Asian sales exhibited strength during
the fiscal year.
Net sales of functional saccharides business gained by a wide margin
due to the addition of Hayashibara to the Group’s consolidated earnings.
Net sales of beauty care products business fell year-on-year, as new
products introduced during the prior fiscal year underperformed.

[Gross profit]
Higher profits in Life & Healthcare, Automotive & Energy, and Electronics segments. Lower profits inFunctional Materials and Advanced Materials & Processing segments.
[Selling, general and administrative expenses]• Selling expense (+1,245):
Higher selling expense with the consolidation of Hayashibara• Payroll (+2,355):
Increased employee bonuses (+1,787); mainly due to theconsolidation of Hayashibara• Depreciation and amortization (+913):
Additional 1,576 in depreciation of technological assets with theacquisition of Hayashibara; -769 due to change in depreciation
method for tangible fixed assets.
• Amortization of goodwill (+1,463):
Additional amortization (+1,516) related to goodwill in
Hayashibara acquisition[Operating profit]
Higher profits in Life & Healthcare, Functional Materials, and Automotive & Energy segments. Lower profits
in Electronics and Advanced Materials & Processing segments.
[Extraordinary gains]• 3,358 in gains on disposal of fixed assets: mainly simple land sales of 3,161[Extraordinary losses]• Gain on disposal of fixed assets 3,358: mainly simple land sales of 3,161(Millions of yen)

[Assets, Liabilities]
Item

Current
Consolidated
Fiscal Year

Prior
Consolidated
Fiscal Year

ChangeOverview

Current assets

305,751

282,280

23,470Non-current assets

180,996

168,561

12,435

PP&E/intangible Fixed Assets

116,262

114,1822,080

Investments and other assets

64,73454,37910,354

Total assets

486,747

450,842

35,905Current liabilities

165,812

181,689(15,877)

25,061

38,633(13,572)

Short-term loans
Current portion of long-term debt

10,408

11,551(1,142)

Other

130,342

131,505(1,162)Long-term liabilities

83,12956,407

26,721

Bonds

30,000

30,000Long-term debt

32,61438,200(5,586)

Other

20,515

18,206

2,308

248,941

238,097

10,844

98,42588,7109,714

Shareholders’ equity

211,792

201,188

10,604

Accumulated other comprehensive
income (loss)

16,712

3,518

13,194

Total liabilities
Interest-bearing debt

Stock acquisition rights

50

110

(60)

Minority interests

9,250

7,927

1,322

Total net assets

237,806

212,744

25,061

46.9%

45.4%

Net worth ratio(Note) Figures inside parentheses of explanatory text indicate comparative change- 31 -[Current assets]
Increase in cash and deposits (+17,508) and inventories (+6,603); decrease in notes and accounts receivable(-1,701)[Non-current assets]• Increase in tangible fixed assets (+4,239) and buildings (+2,947)• Decrease in intangible fixed assets (-2,158): mainly from goodwill (-1,353) and depreciation oftechnological assets (-1,575)[Current liabilities]• Short-term loans: decrease due to refinancing through corporate bonds (-20,000)[Long-term liabilities]• Corporate bonds: Issuance of unsecured corporate bonds (+30,000)[Net assets]• Shareholders’ equity: Higher retained earnings due to net income gains (+14,182)• Accumulated other comprehensive income: Increased due to foreign currency translation adjustments(+7,967)• Increase in valuation differences in available-for-sale securities (+5,211)

NAGASE & Co., Ltd. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013
Earnings Performance and Fiscal 2014 Earnings Forecast(Millions of yen)FYE March 2010

FYE March 2011

Net SalesFYE March 2012

FYE March 2014
(forecast)FYE March 2013

603,949

660,213631,854666,272

764,000

Functional Materials

177,126

180,025

181,000

Advanced Materials & Processing

217,929

214,546

255,000

Electronics



110,495

116,105

149,000

Automotive & Energy

76,11383,06894,000Life & Healthcare

49,17071,68584,000

Other





1,018

841

1,000

Gross profit

65,41573,00871,62882,58393,400Ratio(10.8%)(11.1%)(11.3%)(12.4%)(12.2%)

Operating profit

13,12818,732

13,427

15,57819,200Ratio(2.2%)(2.8%)(2.1%)(2.3%)(2.5%)

Ordinary income

14,712

20,625

15,69017,92721,000Ratio(2.4%)(3.1%)(2.5%)(2.7%)(2.7%)Net income

7,537

12,8238,570

14,182

14,500(1.2%)(1.9%)(1.4%)(2.1%)(1.9%)

Total assets

368,088375,336

450,842486,747

Equity capital

195,344

201,516

204,706

228,505

Net worth ratio

53.1%

53.7%

45.4%

46.9%

ROE (Equity capital/profit ratio)

4.0%

6.5%

4.2%

6.5%

ROA (Total assets/profit ratio)

2.1%

3.4%

2.1%

3.0%

Earnings per share ()

58.64

99.76

66.69

111.31









Ratio

Debt to cash flow ratio (x)Consolidated companies

Year-on-Year
Change114.7%

113.1%
123.2%
117.1%
102.2%

114.43

59

60

66

82

88

Consolidated subsidiaries

49

51

55

61

63

Equity method affiliates

10

9

11

21

25

102.8%

Note 1: ROE = net income /{( equity capital, beginning of period + equity capital, end of period) / 2}
ROA = net income / {(total assets, beginning of period + total assets, end of period) / 2}
Note 2: Debt to Cash Flow Ratio = (Interest-bearing debt  cash and deposits) / equity capital

Consolidated Companies(Units: Companies)[Ratio of Profitable to Unprofitable Companies]
Category

Current Consolidated Fiscal Year
Profitable Co’s

Unprofitable Co’s

Prior Consolidated Fiscal Year
Total

Profitable Co’s

Unprofitable Co’s

Total

Consolidated

Japan

23

5

28

20

5

25

Subsidiaries

Overseas

24

9

33

23

7

30

Equity Method

Japan

7

2

9

7

2

9

Affiliates

Overseas

9

3

12

2

0

2

77%

23%

100%

79%

21%

100%

Composition Ratio (%)

 Major Profitable Companies Category

Company Name

Main Business Lines

Domestic Consolidated
Subsidiaries

Hayashibara Co., Ltd.

Development, manufacture, and sales of food raw materials, pharmaceutical raw
materials, health food raw materials, and functional dyes

Nagase ChemteX Corp.

Manufacture of epoxy resins, enzyme-processed products, commercial chemicals

Overseas Consolidated
Subsidiaries

Nagase Electronics Technology Co., Ltd.

Thin-glass processing via chemical etching of LCD glass panel units

Nagase (Hong Kong) Ltd.

Import/export, brokerage, market development, information collection

Equity Method Affiliates

Nagase Landauer, Ltd.

Radiation measurement services

 Major Unprofitable Companies Category

Company Name

Main Business Lines

Domestic Consolidated
Subsidiaries

Setsunan Kasei Co., Ltd.

Plastics color processing, sales

CAPTEX Co., Ltd.

Manufacture and sales of rechargeable batteries

Overseas Consolidated
Subsidiaries

Nagase Precision Plastics (Shanghai) Co., Ltd.

Plastic tray molding

Nagase International Electronics Ltd.

Management and operations of domestic/global electronics industry businesses

Equity Method Affiliates

SN Tech Corporation

Manufacture, recycling of developing chemicals(Unit: People)[Employees]
Current Consolidated Fiscal Year
Consolidated
Subsidiaries

Parents972

4,925

Equity Affiliates
3,189

ChangeTotal

Consolidated
Subsidiaries

Parents
9,086

11* Change indicates change versus prior consolidated fiscal year.

- 32 -

341

Equity Affiliates
1,967

Total
2,319