Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2010
October 30, 2009
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, Manager, Corporate Accounting Division
Annual General Meeting of Stockholders (scheduled): November 12, 2009
Start of distribution of dividends (scheduled):
December 7, 2009
(Note: Amounts have been rounded down to the nearest million yen.)

1． Consolidated Results for the Second Quarter of the Fiscal Year Ending March 31, 2010 (April 1, 2009 toSeptember 30, 2009)(1) Consolidated Operating Results (Percentages represent changes compared with the previous fiscal year.)Net sales
Operating income
Ordinary income
Net income%

Millions of yen

Six months ended Sept. 30, 2009
Six months ended Sept. 30, 2008

281,368
384,621

5,262
8,901

Earnings
per share
Six months ended Sept. 30, 2009
Six months ended Sept. 30, 2008%

Millions of yen(26.8)–(40.9)–%Millions of yen

5,796
9,849%

Millions of yen(41.1)–3,0955,706(45.8)–Earnings pershare (diluted)
Yen

Yen

24.08
44.38

–44.38(2) Consolidated Financial Position
Total assets

Net assets

Net assets per share%
Yen
As of September 30, 2009
355,279
200,09454.2
1,498.78
As of March 31, 2009
340,968
191,93154.1
1,435.88(Reference) Equity capital: As of September 30, 2009 ¥192,681 million (As of March 31, 2009: ¥184,599 million)
Millions of yen

2.

Net worth ratio

Millions of yen

Dividends(Record date)

1Q

Dividends per share
3Q

InterimYen

Yen

Fiscal 2008—
8.00
Fiscal 2009
7.00
Fiscal 2010 (est.)
Note: Revisions to projected dividends during the six months ended September 30, 2009: No

3.

Fiscal Year-End

Annual

Yen

Yen

Yen

—

8.00

16.00

—

7.00

14.00

Projected Consolidated Results for the Fiscal Year Ending March 31, 2010
(April 1, 2009 to March 31, 2010)(Percentages represent change compared with the previous fiscal year as applicable)

Net sales
Full year

Operating income

Ordinary income

EarningspershareNet income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

575,000(19.6)

10,000(20.1)

11,000(15.7)

6,000

3.3

46.67

Note: Revisions to projected consolidated results during the six months ended September 30, 2009: Yes－1－4. Other(1) Changes in major subsidiaries during the period (changes in specified subsidiaries due to changes in thescope of consolidation): None
(2) Use of simplified accounting methods or special accounting methods for preparation of quarterly financial
statements: No(3) Changes in accounting principles, procedures, presentation methods, etc., in connection with thepreparation of consolidated financial statements(Recorded under “Changes in important items considered fundamental to the preparation of the quarterly
consolidated financial statements.”)i.
Changes in accordance with revisions to accounting and other standards: Noii.
Changes in items other than (i) above: Yes
See “4. Other” of “Qualitative Information and Financial Statements” on page 4.
(4) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)Six months ended Sept. 30, 2009:
138,408,285 sharesYear ended March 31, 2009:
138,408,285 sharesii.
Number of treasury stock as of the fiscal period end
Six months ended Sept. 30, 2009:
9,849,337 sharesYear ended March 31, 2009:
9,846,589 sharesiii.
Average number of shares during the period:
Six months ended Sept. 30, 2009:
128,560,183 shares
Six months ended Sept. 30, 2008:
128,579,544 shares
Notes: Cautionary Remark Regarding Forward-Looking Statements
1. The projected full-year consolidated results for fiscal 2009 have been revised from the projections announced in July30, 2009.
2.

Statements made in this document with respect to projected results and other statements that are not of historical fact
are forward-looking statements based on the assumptions, projections and plans of the Company as of the date of thisreport. Readers are advised that actual results may differ materially from projections due to risks and uncertainties
arising from a variety of factors, including shifts in global economic and competitive conditions, foreign currency
exchange rates and interest rates.

－2－1. Business Performance(1) Analysis of Business Performancea. General Summary of Results
During the second quarter of the fiscal year ending March 31, 2010, despite some industries showing signs ofrecovery due to the promotion of inventory adjustments and the implementation of a series of economic-stimulus
measures, there continues to be concern over the deteriorating condition of the Japanese economy. This is primarily
attributable to sluggish production worsening employment conditions and stagnant consumer spending.
Against this backdrop, domestic sales for the the second quarter fell 21.3 percent compared with the corresponding
period of the previous fiscal year to ¥172.87 billion and overseas sales decreased 34.2 percent to ¥108.49 billion, fortotal net sales of ¥281.36 billion, a 26.8 percent decrease.
On the earnings front, operating income plunged 40.9 percent year on year to ¥5.26 billion and ordinary income fell
41.1 percent to ¥5.79 billion due to the substantial sales drop, despite the Company’s efforts to reduce selling, generaland administrative expenses. As a result, net income for the second quarter of the fiscal year under review declined
45.8 percent to ¥3.09 billion.
b. Segment Summary
The classification of business segments has been somewhat changed from the first quarter of the fiscal year underreview. Year-on-year figures have been calculated based on a reclassification of the previous business segments into
the new categories.
[Chemicals] Sales: ¥111.04 billion, a 26.0 percent decrease from the same period of the previous fiscal year
Despite a slight recovery trend in sales, this segment was impacted by the ongoing decrease in demand throughout theoverall chemicals industry affected Nagase’s chemical businesses across the board. Consequently, substantial sales
drops being recorded by the chemicals business which handles coating materials, urethane materials, plastic raw
materials and additives; the colors and imaging business which handles dyestuffs, pigments and other products related
to color; and the specialty chemical business which handles a wide range of organic synthesis materials such as
surfactants, industrial oil solutions, silicone and fluorochemicals.
[Plastics] Sales: ¥86.31 billion, a 36.7 percent decrease from the same period of the previous fiscal year
During the period under review, despite indications that demand was beginning to recover slightly, domestic sales forof materials for precision instruments, electronics and automotive applications fell significantly, while sales ofbuilding and packaging materials-related products remained sluggish. Overseas sales also fell in Northeast Asia,Southeast Asia and North America. As a result, overall sales in this segment plunged.
[Electronics] Sales: ¥56.63 billion, an 18.2 percent decrease from the same period of the previous fiscal year
Sales of LCD display films and chemicals for manufacturing LCDs remained nearly unchanged compared to thecorresponding period of the previous fiscal year, while sales of touch-panel components grew significantly during theperiod under review. At the same time, despite a recovery in sales of precision abrasive materials for hard disks, sales
related to silicon wafer applications fell. Sales of chemicals and appliances for manufacturing semiconductors werestagnant, while sales of formulated epoxy resin for heavy electrical machinery and mobile phones remained on parwith the corresponding period of the previous fiscal year. In addition, overseas sales remained weak in all regions.
Accordingly, overall sales dropped, reflecting sluggish sales of products for the automobile and light electricalequipment markets.
[Life Sciences] Sales: ¥26.81 billion, a 5.0 percent decrease from the same period of the previous fiscal year
In the Life Sciences segment, sales of pharmaceutical raw materials and intermediates as well as agricultural raw
materials in the fine chemicals business dipped slightly, while sales in the beauty care products business, whichhandles cosmetics and health foods, were robust. Although strong sales were also reported by domestic manufacturers,
overall sales in this segment declined slightly.
[Other] Sales: ¥0.56 billion, a 32.2 percent decrease from the same period of the previous fiscal year
No specific items to report in this segment during the period under review.
－3－2. Qualitative Information on Consolidated Financial Position(1) Assets, Liabilities and Net Assets
Total assets increased ¥14.31 billion to ¥355.27 billion during the period under review, despite a decrease ininventories. This was mainly attributable to an increase in marketable securities due to accumulated current assets on
hand as well as increased current prices of investment account securities despite the decrease in trade receivables andinventories.
Total liabilities increased ¥6.14 billion from the end of the previous fiscal year to ¥155.18 billion due to such factors
as a rise in accounts payable and deferred tax liability. This occurred despite a decrease in short-term loans.
Net assets rose ¥8.16 billion to ¥200.09 billion due to the increase in net unrealized holding gain on securities.
As a result, the net worth ratio rose 0.1 percentage points from 54.1 percent to 54.2 percent.
(2) Cash FlowsNet cash provided by operating activities was ¥25.47 billion, due to decreases in working capital as well as net
income before income taxes and minority interests.
Net cash used in investing activities was ¥15.4 billion. This reflected such factors as purchases of securities, property,
plant and equipment, and investment securities due to accumulated current assets on hand.
Net cash used in financing activities was ¥8.45 billion due to such factors as a reduction in short-term loans anddividend payments.
As a result, the balance of cash and cash equivalents as of September 30, 2009 was ¥38.05 billion, up ¥1.91 billion
from the end of the previous fiscal year.

3. Qualitative Information on Forecasted Consolidated Results
The projected full-year consolidated results for fiscal 2009 have been revised from the projections announced on July30, 2009. Please refer to the “Notice Concerning the Revision of Earnings Forecasts” announced on October 30, 2009for details.

4. Other(1) Changes in Significant Subsidiaries during the Period (Changes in specified subsidiaries due to changes inthe scope of consolidation)
None applicable(2) Use of Simplified Accounting Methods or Special Accounting Methods for Preparation of Quarterly
Financial Statements
No(3) Changes in Consolidated Accounting Rules, Procedures, Presentation Method, etc., for the Quarterly
Consolidated Financial Statements
a. The Company has been applying special quarterly accounting methods to determine income tax payments,
including calculations for some consolidated subsidiaries that use the estimated annual effective tax rate based on
the normal effective statutory tax rate. However, such accounting methods have been replaced from the period
under review with the basic accounting procedures used for the full year in order to ensure the more appropriate
calculation of quarterly tax expenditures. The impact of such changes on the Company’s financial performance isminor.
b. The classification of business segments has been partially changed from the first quarter of the fiscal year
under review.

－4－