Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2012
<Under Japanese GAAP>

July 29, 2011
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
Filing of Quarterly Report (scheduled): August 11, 2011
Start of distribution of dividends (scheduled):—
Supplementary documents or quarterly financial results: No
Quarterly investors’ meeting: No(Note: Amounts have been rounded down to the nearest million yen.)

1． Consolidated Results for the First Quarter of the Fiscal Year Ending March 31, 2012
(April 1, 2011 to June 30, 2011)(1) Consolidated Operating Results (Percentages represent changes compared with same period of the previous fiscal year.)
For the first quarter ended
June 30, 2011
June 30, 2010
(Note) Comprehensive income:For the first quarter ended
June 30, 2011
June 30, 2010

Net sales
Operating incomeOrdinary income
Millions of yen%
Millions of yen%
Millions of yen%
154,429(4.6)
4,194(25.3)
5,358(16.6)
161,896
23.1
5,611
248.6
6,425
209.9
First quarter ended June 30, 2011:¥4,272 million (497.2%)
First quarter ended June 30, 2010:¥715 million (NA)
Earnings
Earnings per shareper share(diluted)
Yen
Yen
24.83
—
26.69
—

Net income
Millions of yen%
3,191
(7.0)
3,430
244.0

(2) Consolidated Financial Position
Total assets
June 30, 2011
March 31, 2011
(Reference) Equity capital:

Millions of yen
378,343
375,336
As of June 30, 2011:
As of March 31, 2011:

Net assets

Net worth ratio

Millions of yen
211,472
209,316¥203,691 million¥201,516 million

%
53.8
53.7

2. Dividends
Dividends per share
1Q
For the year endedYen(or ending)March 31, 2011—
March 31, 2012—
March 31, 2012 (estimate)
Note: Revisions to the latest projected dividends: NoInterim

3Q

Yen

Fiscal Year-End

Annual

Yen

Yen

Yen
9.00

—

13.00

22.00

12.00

—

12.00

24.00

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2012
(April 1, 2011 to March 31, 2012)(Percentages represent changes compared with the corresponding periods of the previous fiscal year as applicable)
Net sales

Operating income

Millions of yen%
Millions of yen
Interim period
315,000(4.9)
7,700
Full fiscal year
660,000(0.0)
18,000Note: Revisions to the latest projected consolidated results: No%(26.9)(3.9)

Ordinary income
Millions of yen
8,500
19,000%(25.2)(7.9)

Net income
Millions of yen
5,400
12,000%(21.2)(6.4)

Earnings
per shareYen
42.02
93.37

4. Other(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes
in the scope of consolidation): None
New: — (Company name:)
Excluded: — (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: No(3) Changes in accounting principles, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
i.
ii.
iii.
iv.

Changes in accordance with revisions to accounting and other standards: No
Changes in items other than (i) above: No
Changes in accounting estimates: No
Restatement of prior period financial statements after error corrections: No(4) Number of shares issued and outstanding (common stock)i.

Number of shares issued and outstanding as of the fiscal period end (including treasury stock)
As of June 30, 2011:
138,408,285 shares
As of March 31, 2011:
138,408,285 shares
ii. Number of treasury stock as of the fiscal period end
As of June 30, 2011:
9,893,783 shares
As of March 31, 2011:
9,893,808 sharesiii. Average number of shares during the period:
Three months ended June 30, 2011:
128,514,523 shares
Three months ended June 30, 2010:
128,548,463 shares

Indication of quarterly review procedure implementation status
This quarterly report is exempt from the quarterly review procedure based upon the Financial Instruments andExchange Act. Furthermore, quarterly consolidated financial statements were undergoing the review procedure
process at the time of release.
Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The results forecasts presented in this document are based upon currently available information and assumptions
deemed rational. A variety of factors could cause actual results to differ materially from forecasts. Please refer to 1.
Qualitative Information and Financial Statements, subsection (3) Qualitative Information on Projected
Consolidated Results on page 4 of this document.

1.

Qualitative Information and Financial Statements(1) Qualitative Information and Overview of Consolidated Business Resultsa. General Summary of Results
After the Great East Japan Earthquake, the Japanese economy experienced stagnant production and disruption in
supply chains. Although some signs of recovery were seen in line with nationwide restoration efforts, the overall
economy stayed weak during the period under review.

In such an environment, domestic sales for the first quarter decreased 7.5% compared with the corresponding
period of the previous fiscal year to ¥89.75 billion, and overseas sales dropped 0.3% year on year to ¥64.67 billion.
Net sales fell 4.6% to ¥154.42 billion.
On the earnings front, operating income declined 25.3% year on year to ¥4.19 billion. Ordinary income sank 16.6%
to ¥5.35 billion, and net income decreased 7.0% to ¥3.19 billion. Decreases in these earnings items were largely
attributable to a decline in net sales.
b. Segment Summary
From the quarter under review, Nagase made partial changes to its reportable segments. Accordingly, the amounts
and percentage figures relating to the first quarter of the previous fiscal year are presented pro forma using the newsegmentation.
[Chemicals]
Sales: ¥65.41 billion, a 5.0% decrease (year on year)
In the performance chemicals business, sales of urethane materials to the automobile industry declined. Sales ofplastic raw materials and additives remained flat, while sales of paint materials for use in building materials
increased. In the color and imaging business, although sales of pigments and additives increased, sales of functional
color pigments for display-related applications and dyestuffs and fiber-processing agents for the fiber-processing
industry declined. In the speciality chemicals business, sales of surfactants and raw materials for industrial oil
solutions were robust. However, sales of precision abrasive materials, organic synthesis materials and fluorochemicals were all stagnant. As a result, segment sales declined.
[Plastics]
Sales: ¥52.47 billion, a 0.6% decrease (year on year)
Domestic sales to office automation and consumer electronics businesses edged down. Domestic sales ofautomotive materials and products declined, owing to a decrease in automobile production. In businesses focusing
on functional films and sheets and plastic molding products, sales of our mainstay and other products dropped. Incontrast, sales showed slight increases in Southeast Asia and North America. However, sales in Northeast Asia fellslightly, causing total overseas sales to remain flat. As a result, segment sales decreased slightly from thecorresponding period of the previous fiscal year.
[Electronics]
Sales: ¥24.45 billion, a 9.7% decrease (year on year)
Sales of materials for LCD films and touch panels expanded. Sales of chemicals used to manufacture
semiconductors and LCD panels declined, reflecting a decrease in demand from Nagase’s major customers. Salesof formulated epoxy resins were robust and accordingly increased, particularly for applications in heavy electricmachinery and mobile phones. Although overall overseas performance was brisk, segment sales declined, reflecting
Nagase’s withdrawal from an LCD-related materials processing business in Japan.
[Life Sciences]
Sales: ¥11.86 billion, an 8.5% decrease (year on year)
In the fine chemicals business, sales of pharmaceutical products manufactured by Nagase Medicals Co., Ltd. wererobust. However, sales of agricultural chemicals and products for living environments dropped significantly, whilesales of pharmaceutical raw materials and intermediates, enzymes and fermentation products declined across theboard. Consequently, fine chemicals business sales fell from the corresponding period of the previous fiscal year. In
the beauty care products business, which handles cosmetics and health foods, sales of our new products launched in
the previous fiscal year stalled. Furthermore, sales in this business were stagnant, reflecting a general hesitanceamong consumers to buy when anticipating new releases. As a result, segment sales declined.

[Other]
Sales: ¥0.21 billion, a 3.5% decrease (year on year)
No specific items to report in this segment during the year under review(2) Qualitative Information on Consolidated Financial Position
Assets, Liabilities and Net Assets
Total assets as of June 30, 2011 increased ¥3.0 billion from March 31, 2011 to ¥378.34 billion. Decreases in cash
and time deposits and investments in securities were more than offset by an increase in inventories, an increase inproperty, plant and equipment owing to capital investments.
Total liabilities increased ¥0.85 billion from March 31, 2011 to ¥166.87 billion. Decreases in accrued income taxes
and provision were more than offset by increases in borrowings and notes and accounts payable.
Net assets grew ¥2.15 billion from March 31, 2011 to ¥211.47 billion, reflecting an increase in retained earnings
and an improvement of foreign currency translation adjustments.
As a result, the net worth ratio rose 0.1 of a percentage point from 53.7% as of March 31, 2011 to 53.8%.
Cash FlowsNet cash provided by operating activities stood at ¥0.99 billion. An increase in working capital following an
increase in inventories was more than offset by income before income taxes and minority interest totaling ¥5.28billion.
Net cash used in investing activities totaled ¥2.85 billion, mainly owing to purchases of property and equipment.
Net cash used in financing activities amounted to ¥1.26 billion, primarily due to the payment of cash dividends.
In addition to the above, Nagase recorded the effect of exchange rate changes on cash and cash equivalents, which
increased ¥0.35 billion from March 31, 2011, and a ¥0.16 billion increase in cash and cash equivalents resulting
from inclusion of subsidiaries in consolidation. Despite these increases, the balance of cash and cash equivalents asof June 30, 2011 declined ¥2.6 billion from March 31, 2011 to ¥44.59 billion.
(3) Qualitative Information on Projected Consolidated Results
The projected full-year consolidated results for the fiscal year ending March 31, 2012, announced on April 28, 2011,
have not been revised.

2.

Others(1) Changes in major subsidiaries during the period
No items to report(2) Application of special accounting methods to the preparation of quarterly financial statements
No items to report(3) Changes in accounting principles, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
No items to report(4) Additional Information(Application of the Accounting Standard for Accounting Changes and Error Corrections, etc.)
For accounting changes and error corrections to be made to prior period financial statements after April 1, 2011,
Nagase applied the Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No.24 ofDecember 4, 2009) and the Guidance on Accounting Standard for Accounting Changes and Error Corrections(ASBJ Guidance No.24 of December 4, 2009).