Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013
<Under Japanese GAAP>
November 9, 2012
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
Tel: +81-3-3665-3103
Filing of quarterly report (scheduled): November 12, 2012
Start of distribution of dividends (scheduled): December 3, 2012
Supplementary documents or quarterly financial results: Yes
Quarterly investors’ meeting: Yes(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, 2013
(April 1, 2012 to September 30, 2012)(1) Consolidated Operating Results(Percentages represent changes compared with same period of the previous fiscal year.)Net sales

For the second quarter ended
September 30, 2012
September 30, 2011
(Note) Comprehensive income:Operating profit

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

335,549
308,494

8.8
(6.9)

8,161
7,794

4.7
(26.0)

8,665
9,201

(5.8)
(19.1)

8,093
5,402

49.8
(21.1)

Second quarter ended September 30, 2012:
Second quarter ended September 30, 2011:
Earnings per share

For the second quarter ended
September 30, 2012
September 30, 2011

¥3,084 million (15.9% decrease)¥3,669 million (74.7%)

Earnings per share (diluted)
Yen

Yen

63.23
42.04




(2) Consolidated Financial Position
Total assets

Net worth ratio

Millions of yen%

465,864
450,842

215,401
212,74444.5
45.4

September 30, 2012
March 31, 2012
(Reference)Equity capital:

Net assets

Millions of yen

As of September 30, 2012:
As of March 31, 2012:¥207,420 million¥204,706 million

2. Dividends
Dividends per share
1Q
For the year ended (or ending)March 31, 2012
March 31, 2013
March 31, 2013 (estimate)

2Q

Financial year
end

3Q

Annual

Yen

Yen

Yen

Yen

Yen




12.00
13.00



12.00

24.00



13.00

26.00

(Note) Revisions to the latest projected dividends: No

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2013
(April 1, 2012 to March 31, 2013)(Percentages represent changes compared with the previous fiscal year)

Net sales
Full fiscal year

Millions of yen

671,000

Operating profit% Millions of yen

6.2

16,400Ordinary income% Millions of yen

22.1

17,600Earnings per
share

Net income% Millions of yen

12.2

13,600

%

Yen

58.7

107.33(Note) Revisions to the latest projected consolidated results: Yes*Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope 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 correctionsi.
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 6, “2. Summary Information (Notes) (3) Changes in Accounting Policies or
Presentation Methods in Consolidated Financial Statements.”(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)
September 30, 2012
138,408,285 shares March 31, 2012
138,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
September 30, 2012
11,693,852 shares

March 31, 2012

Average number of shares during the six-month period ended;
September 30, 2012
128,000,186 shares September 30, 2011

9,893,787 shares

128,514,518 shares* Quarterly Review Implementation DisclosureThis 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 (3) Qualitative Information related to Earnings Forecasts” on page 5 of thisdocument.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

Attachments
1. Qualitative Information ............................................................................................................... 2(1) Qualitative Information on Consolidated Operating Results ................................................. 2(2) Qualitative Information on Consolidated Financial Position ................................................. 4(3) Qualitative Information related to Consolidated Earnings Forecasts .................................... 5
2. Summary Information (Notes) .................................................................................................... 6(1) Changes of Classification of Specified Subsidiaries Accompanied by Changes in theConsolidation Scope .............................................................................................................. 6(2) Application of Special Accounting Methods in the Preparation of Quarterly Consolidated
Financial Statements .............................................................................................................. 6(3) Changes of Accounting Policies or Presentation Methods in the Consolidated Financial
Statements ............................................................................................................................. 6
3. Quarterly Consolidated Financial Statements ............................................................................. 8(1) Quarterly Consolidated Balance Sheets................................................................................. 8(2) Quarterly Consolidated Statement of Income and Consolidated Statement ofComprehensive Income ....................................................................................................... 10
Quarterly Consolidated Statement of Income ...................................................................... 10
Consolidated Statement of Comprehensive Income ............................................................ 11(3) Quarterly Consolidated Statements of Cash Flows ............................................................. 12(4) Assumption for Going Concern ........................................................................................... 13(5) Significant Fluctuations in Shareholders’ Equity ................................................................ 13(6) Segment Information ........................................................................................................... 13
4. Supplementary Information....................................................................................................... 16(1) Overseas Sales ..................................................................................................................... 16-1-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

1. Qualitative Information(1) Qualitative Information on Consolidated Operating Results
General Summary of Results
The future of our economy remained cloudy throughout the second quarter of the year. The yen continues to tradeat high values, while the economy slows down, and increased political tensions between Japan and China haveslowed production and sales of Japanese goods in that country.
Under these conditions, the Company recorded domestic sales for the second quarter in the amount of ¥184.79
billion, representing a 2.7% year-on-year increase. Overseas sales amounted to ¥150.75 billion (17.3% year-onyear increase), leading to net sales for the second quarter of ¥335.54 billion (8.8% year-on-year increase).
While the Company recorded improved gross profits driven by net sales growth, increases in selling expenses andgeneral and administrative expenses resulted in a 4.7% year-on-year increase in operating profit, amounting to¥8.16 billion. Ordinary income amounted to ¥8.66 billion (5.8% year-on-year decrease) due to declines in foreignexchange gain and other factors. Net income experienced a 49.8% year-on-year increase to ¥8.09 billion, due inlarge part to extraordinary gains (gain on sales of non-current assets).
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 thestrengths of our entire group, reflecting the respective positions of each business in the value chain, as well as withthe 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 allindustries). See “3. Quarterly Consolidated Financial Statements (6) Segment Information” for more detailregarding business segments, related industries, and products.
The Company has presented prior second-quarter net sales according to the new categorization.
[Functional Materials] Net Sales: ¥95.39 billion (6.7% year-on-year increase)Significant gains in sales of functional materials in Southeast Asia and gains in Northeast Asia more than made up
for the small decline domestically and declines in Europe and the United States. As a result, functional materials
sales increased overall year on year.

• Sales in the performance chemicals business increased overall compared to the same quarter in the prior fiscal
year. Sales of plastic materials and additives to Asia declined, while sales of coating raw materials forconstruction and automotive applications performed well. In addition, sales of urethane materials for the
automotive industry experienced year-on-year growth.

• Sales in the specialty chemicals business fell as a whole compared to the prior fiscal year. While surfactants soldvery well, we saw a drop in sales of raw materials for industrial oil solutions, semiconductor encapsulantmaterials, and organic products. Sales of abrasive materials also show a year-on-year decline.
[Advanced Materials & Processing] Net Sales: ¥107.76 billion (1.5% year-on-year decrease)
Sales in the Advanced Materials & Processing segment overseas experienced growth, mainly due to strong
performance in Northeast Asia and Southeast Asia. However, slight decreases in sales in Europe and the UnitedStates, as well as decreases domestically, led to narrow sales decreases overall.

• Colors and imaging business sales declined as a whole. While sales of functional dyes for display-related
products performed well during the first quarter, they fell during the second quarter, as did sales of-2-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

dyes/additives and information printing materials. Sales of dyestuffs and textile processing agents for the
textile processing industry also declined due in part to the effects of reorganization and integration of thesebusinesses into equity method affiliates.

• Sales of plastics and increased export sales of molding tools in Asia buoyed our office equipment and appliancesbusiness. In contrast, domestic sales fell, while production adjustments among certain users also drove down
domestic plastics revenues. As a result, sales were down as a whole for this business.

• The Nagase business related to functional films and sheets and plastic molding products produced sales growth
for the period. Despite a decrease in insulating sheets, we saw a slight increase in sales for liquid crystal
polarizer film precision inspection systems. At the same time, we recorded significant year-on-year improvement
in antireflective sheets sales.
[Electronics] Net Sales: ¥55.24 billion (6.7% year-on-year increase)
The Company saw significantly higher electronics sales in Northeast Asia while sales decreased in Southeast Asia,with slight gains domestically and in Europe and the United States. As a result, sales overall in this businessincreased.

• In the Company’s electronic chemicals business, sales of formulated epoxy resin to heavy electrical equipment
customers were strong, as were sales for mobile phone applications. However, sales as a whole for this businessfell, reflecting weaker performance for sales of chemicals used in the manufacturer of semiconductors and LCD
panels.

• Performance of sales for films used in LCDs in the electronic materials business fell with customer production
slowdowns, while materials for touch-panel modules and LED lighting applications performed well, leading toan overall increase in sales for this business.
[Automotive & Energy] Net Sales: ¥42.19 billion (20.6% year-on-year increase)
The automotive- related business recorded higher sales of raw materials and parts to the automotive industry inJapan during the period. Eco-car subsidies and the recovery from the March 11, 2011 earthquake led to sharply
higher production. Production among Japanese automotive makers also increased overseas, driving strong
performance in Company sales in Northeast Asia, Southeast Asia, and North America, leading to higher year-onyear sales for this segment as a whole.
[Life & Healthcare] Net Sales: ¥34.51 billion (53.7% year-on-year increase)
Consolidating the functional sugars business of Hayashibara Co., Ltd. (acquired during the previous fiscal year;
net sales of ¥12.3 billion for the second quarter of the fiscal year ending March 2013), the Company saw
significant overall growth in this segment.

• Pharmaceutical raw materials and intermediates, as well as in vitro diagnostics and medical materials,
experienced strong sales. At the same time daily commodities business also experienced growth. Overall, werecorded a year-on-year increase in functional sugars sales. This year the Group launched new products,
including some featuring our mainstay trehalose. This led to strong performance in food product sales. We also
saw higher food and starch sugar market sales for our enzyme and fermentation products.

• Our beauty care products business includes sales of cosmetics and health foods. We saw lower year-on-yearsales in this business, despite higher sales of health food products and other new products marketed to younger
consumers. The gains were more than offset by lower sales for cosmetics products introduced during the priorfiscal year.
[Other] Net Sales: ¥420 million (3.2% year-on-year decrease)
No special matters to disclose.
-3-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(2) Qualitative Information on Consolidated Financial Position
Assets, Liabilities and Net Assets
As of the end of the consolidated second quarter current assets amounted to ¥300.83 billion, an increase of ¥18.55
billion compared to the end of the prior consolidated fiscal year. This increase was mainly due to increased cash
and time deposits through the issuance of ¥30.0 billion in unsecured bonds (¥20.0 billion of proceeds used to
repay short-term loans). Non-current assets decreased by ¥3.53 billion compared to the end of the priorconsolidated fiscal year, amounting to ¥165.03 billion. While the Company made new acquisitions of land andbuildings during the period, it also recorded a decrease in investments in securities (due to price declines in equity
investments). As a result, total assets amounted to ¥465.86 billion, representing an increase of ¥15.02 billion
compared to the end of the prior consolidated fiscal year.
Liabilities increased by ¥12.36 billion compared to the end of the prior consolidated fiscal year, amounting to¥250.46 billion. This increase was mainly due to issuances of unsecured corporate bonds and increased notes andaccounts payable. These increases were offset somewhat by decreases in short-term loans.
Despite a decrease in other unrealized holding gains on securities (due to share price declines in equity
investments) and purchase of treasury stock, the Company recorded net income of ¥8.09 billion, resulting in net
assets as of the end of the second consolidated fiscal quarter reaching ¥215.4 billion, representing a ¥2.65 billion
increase compared to the beginning of the period.
As a result of the preceding, shareholders’ equity ratio fell by 0.9 points from 45.4% at the end of the priorconsolidated fiscal year, down to 44.5%.
Cash Flows
Cash and cash equivalents (“Cash”) increased by ¥10.24 billion. Cash from operating activities amounted to ¥8.91
billion. Cash used in investing activities amounted to a net outflow of ¥4.98 billion, while cash from financing
activities amounted to ¥7.39 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 ofconsolidated subsidiaries. As a result, consolidated Cash increased by ¥14.88 billion (+52.2%) compared to theend of the prior consolidated fiscal year, amounting to a total of ¥43.39 billion.
(Cash Flows from Operating Activities)
Cash flows from operating activities for the consolidated second quarter amounted to ¥8.91 billion. This increase
was mainly due to ¥3.71 billion in depreciation and amortization (no cash effects) and ¥11.86 billion in net
income before taxes, offset slightly by ¥3.18 billion in income tax payments.
(Cash Flows from Investing Activities)
Cash used in investing activities during the consolidated second quarter amounted to ¥4.98 billion. The Group sold
¥3.0 billion in property, plant, and equipment, but paid ¥7.7 billion for tangible and intangible fixed assets during
the period.
(Cash Flows from Financing Activities)
Cash flows from financing activities for the consolidated second quarter amounted to ¥7.39 billion. This result was
mainly due to cash inflow from corporate bond issuances in the amount of ¥29.85 billion, offset by repayments ofloans in the amount of ¥23.0 billion.

-4-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(3) Qualitative Information related to Earnings Forecasts
The future direction of the global economy remains difficult to predict. While we had forecast a gradual recovery inJapan's markets, the yen has remained strong against world currencies. As well, political issues between Japan and
China have slowed production and sales for Japanese companies located in that country.
The first half of the year was generally weak rather than the pace of recovery that we first predicted. The second half ofthe year, we still forecast strong sales for our LCD-related business (for tablet and other devices), related processing
products and services, and our automotive -related business in North America and ASEAN. In contrast, we expect
lower production for Japanese automotive makers, as well as makers of office equipment and appliances, in China andthe greater China area. We continue to forecast comparatively stable sales for functional sugars at Hayashibara Co., Ltd.
and enzyme and fermentation products in our life and healthcare business.
We do believe we will see second-half results on par with the first half. Given these facts, however, we forecast fullyear earnings to underperform the prior year, since we do not expect any special factors to come into play (e.g. gain on
sales of real estate in the first half). Accordingly, we have made a downward revision of our full-year forecast.
[Full-year](Millions of yen)
Revised Forecast (A)Prior Forecast (B)Change (A-B)

Change (%)

Net sales

671,000

700,000(29,000)(4.1%)

Operating profit

16,40019,500(3,100)(15.9%)

Ordinary income

17,60020,500(2,900)(14.1%)Net income

13,60015,500(1,900)(12.3%)-5-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

2. Summary Information (Notes)(1) Changes of Classification of Specified Subsidiaries Accompanied by Changes in the Consolidation
Scope
No matters to report.

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

(3) Changes in Accounting Policies or Presentation Methods in Consolidated Financial Statements(Changes in Accounting Policies which are difficult to Distinguish from Changes in Accounting Estimates)
Change in Depreciation Method for Property, Plant and Equipment
To date, the Company and its domestic consolidated subsidiaries have depreciated property, plant, and equipment
under the declining balance method (except for buildings purchased after April 1, 1998). Overseas consolidated
subsidiaries have used the straight-line method of depreciation. However, beginning with the consolidated firstquarter of the fiscal year ending March 2013, the Company and its domestic consolidated subsidiaries havechanged to the straight-line method for depreciating property, plant, and equipment.
Under the guidance of the “CHANGE” 11 medium-term business plan (fiscal 2009 through fiscal 2011), theNagase Group had been engaged in building stronger research, development and manufacturing functions. The
current “Change-S2014” medium-term business plan (fiscal 2012 through fiscal 2014) keeps the Group’s attention
focused on these same areas, while calling for significant increases in capital investment.
With increased capital investment, greater investment in Group manufacturing companies, and full-scale
operations of manufacturing facilities beginning this fiscal year, the Company has reexamined its depreciation
policies for property, plant, and equipment. Company management concluded that manufacturing facilities andequipment will likely be used consistently and reliably over the course of many years, determining that adopting
the use of the straight-line method of depreciation to allocate depreciation expense evenly over the useful lives ofsuch manufacturing equipment would more appropriately reflect actual characteristics of the Group’s business.
With this change in accounting policy, depreciation and amortization for the consolidated second quarter is ¥1,005
million lower than under the previous method, leading to a ¥861 million increase in operating profit, and a ¥871
million increase in both ordinary income and net income before income taxes.
(Changes in Accounting Estimates)
Changes in Estimated Useful Lives of Property, Plant, and Equipment
The Company and some consolidated subsidiaries have changed the estimated useful lives of certain items ofproperty, plant, and equipment beginning with the consolidated first quarter of the fiscal year ending March 2013.
In conjunction with these changes, depreciation and amortization for the consolidated first quarter is ¥44 million
greater than compared to calculations using prior useful lives. Operating profit, ordinary income, and net income
before income taxes are each lower by a comparative ¥43 million.
(Additional Information)
Beginning with the consolidated first quarter for the fiscal year ending March 2013, 22 consolidated subsidiaries
have changed their fiscal year ends (December; February for Totaku Industries, Inc.) to match the Company’s
fiscal year end. This change should allow the Nagase Group to better understand Group financial performance, toensure more rapid implementation of management policies, and to lead to more appropriate information
disclosures. To date, the Group has been making the necessary material consolidation adjustments for transactions
occurring on the Company’s fiscal closing date for the Group’s 10 consolidated subsidiaries and three equity-6-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

method affiliates for which a December year end is mandated by local law. Now, the Company will implement a
consolidation method for quarterly financial statements based on a provisional close at the quarterly fiscal closing
date.
The Company has recorded an increase to retained earnings for ¥609 million, representing profits from the periodof January 1, 2012 (from March 1, 2012 for Totaku Industries, Inc.) through March 31, 2012. The Company has
disclosed changes in cash flows affecting quarterly consolidated statements of cash flows in “Increase (decrease)in cash and cash equivalents accompanying changes in fiscal years of consolidated subsidiaries.”-7-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

3. Quarterly Consolidated Financial Statements(1) Quarterly 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
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
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term debt
Accrued income taxes
Deferred tax liabilities
Accrued bonuses for employees
Accrued bonuses for directors
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-8-

Second Quarter, Current
Consolidated Fiscal Year
(September 30, 2012)

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

44,331
195,958
44,466
1,333
3,165
4,795
8,114
(1,332)300,833

56,72760,062

32,07921,6693,705
57,454

31,171
20,881
3,891
55,94449,014
1,122
896
3,612
(266)
54,379168,561
450,842

43,191
709
825
4,563
(266)
49,023
165,030
465,864

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

112,369
21,25910,397
3,099
41
3,710
137
14,161
165,177
38,2007,251
10,032922
56,407238,097

30,00037,871
6,268
10,199945
85,285
250,462NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2012)
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-9-

The Second Quarter, Current
Consolidated Fiscal Year
(September 30, 2012)

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

9,699
10,041
194,748(7,109)207,379

12,731(21)(9,191)
3,518
110
7,927
212,744
450,8429,260(2)(9,217)40
50
7,930
215,401
465,864NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income(Quarterly Consolidated Statement of Income)(Cumulative Second Quarter)(Millions of yen)
Cumulative Second Quarter,
Prior Consolidated Fiscal Year
(April 1, 2011 – September 30, 2011)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Investment profit on equity method
Foreign exchange gain
Other
Non-operating income, total
Non-operating expenses
Interest expenses
Foreign exchange loss
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
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
Income before income taxes
Income taxes
Deferred taxes
Total income taxes
Income before minority interests
Minority interests
Net Income- 10 -The Cumulative Second Quarter,
Current Consolidated
Fiscal Year
(April 1, 2012 – September 30, 2012)

308,494
272,70335,79027,995
7,794

335,549
294,178
41,371
33,209
8,161

112
609
125
159
489
372
1,869

105
560
144
249

236
1,296

320

141
462
9,201

555
11
226
792
8,665

12
346
137
497

3,113
606
60
3,779

3
24
54
3
159
4
248
9,450
3,929
(359)
3,569
5,880
477
5,402

0
84
275
0
218
3
582
11,862
3,717
(330)
3,387
8,475
382
8,093

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(Consolidated Statement of Comprehensive Income)(Cumulative Second Quarter)(Millions of yen)
Cumulative Second Quarter,
Prior Consolidated Fiscal Year
(April 1, 2011 – September 30, 2011)

Income before minority interests
Other comprehensive loss
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 loss
Comprehensive income
Comprehensive income attributable to
Shareholders of the Company
Minority interests- 11 -

Cumulative Second Quarter,
Current Consolidated
Fiscal Year
(April 1, 2012 – September 30, 2012)

5,880

8,475

(2,063)9(131)(3,478)19(1,893)

(24)

(37)

(2,210)3,669(5,390)
3,084

3,146
523

2,912
172

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)
Cumulative Second Quarter,
Prior Consolidated Fiscal Year
(April 1, 2011 – September 30, 2011)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Provision for accrued retirement benefits for employees(decrease)
Interest income and dividend income
Interest expenses
Foreign exchange gain
(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Other
SubtotalInterest 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 sale of property, plant and equipment
Purchase of investments securities
Cash from sale of investment securities
Change in short-term loans (increase)
Payment for acquisition of intangible fixed assets
Other
Cash flows from investing activities
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- 12 -

Cumulative Second Quarter,
Current Consolidated Fiscal
Year(April 1, 2012 – September 30, 2012)

9,450
3,322
1

11,862
3,710
803

671

148

(721)
320
(252)
3,714
(7,595)(1,544)(1,598)
5,767
728
(322)
(4,421)
1,752

(666)
555
(311)
(152)
(3,156)
3,059(3,983)
11,869751(521)(3,187)
8,913(3,450)
30
(147)
489
(175)
(738)
(909)
(4,900)(6,935)
3,003
(145)
842
(225)
(769)
(753)
(4,982)2,659
600(1,242)(0)(1,670)
(347)
(55)
(57)

(17,361)
4,251(5,646)29,855(1,649)(1,542)
(454)
(62)
7,391

(85)

(1,078)(3,290)47,202

10,24328,517

165

915



3,721

44,07643,397

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

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

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

(6) Segment Information
I Six months ended September 30, 2011 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

Corporate(Note) 2

To Quarterly
Consolidated
Adjustments
Statements of(Note) 3
Income(Note) 4

Net sales
Sales tocustomers

89,399109,41351,80334,98322,452

308,053440

308,494308,494

Intersegment
sales and transfers

2,728

1,273

366

1,205

297

5,872

2,663

8,535



(8,535)



Total

92,197

110,686

52,17036,18922,750313,9253,104

317,029



(8,535)

308,494

3,485

1,696

3,169

447

338

9,138

82

9,221

(1,806)

380

7,794

Segment income(loss)(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 translations.
4. The sum of segment income totals, Corporate and Adjustments is equivalent to operating profit as presented in the consolidated statements
of income.

II Six months ended September 30, 2012 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

Corporate(Note) 2

To Quarterly
Consolidated
Adjustments
Statements of(Note) 3
Income(Note) 4

Net sales
Sales tocustomers

95,395

107,765

55,24842,19534,517335,123426

335,549

335,549

Intersegment
sales and transfers

1,331

1,156

1,573

692

206

4,959

2,658

7,618



(7,618)



Total

96,726108,92256,82242,88834,723340,083

3,084

343,168

(7,618)335,549

3,093

1,363

3,031

547

1,937

9,973

220

10,194(2,183)

151

8,161

Segment income(loss)(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 translations.
4. The sum of segment income totals, Corporate and Adjustments is equivalent to operating profit as presented in the consolidated statements
of income.

- 13 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

2. Changes in Reportable Segments(Changes in Business Classifications)
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 first quarter of the fiscal year ending
March 2013, the Company reorganized four business segments (Chemicals, Plastics, Electronics, and Life Sciences)away from product categories 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 consolidated cumulative second quarter of the fiscal year ended March 2012 has been
prepared under this new classification method, as noted in “1. Information related to net sales and income (loss) byreportable segment.”
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials, plastic
materials, plastic additives, industrial oil solutions, surfactants, fluorochemicals, encapsulant materials, silicone
materials, precision electronics abrasives, and more for the paints/inks, resins, urethane foam, organic synthesis,
surfactants, semiconductor, HDD-related industries.
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, 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-temperature/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, feeds/fertilizers for thepharmaceutical, food, and cosmetics industries. In addition, this segment sells cosmetics, health foods, and beauty
foods directly to consumers.
(Changes in Accounting Policies which are difficult to Distinguish from Changes in Accounting Estimates)
Changes in Depreciation Method for Property, Plant, and Equipment
To date, the Company and its domestic consolidated subsidiaries have depreciated property, plant, and equipment
mainly under the declining balance method. Overseas consolidated subsidiaries have mainly used the straight-line
method of depreciation. However, beginning with the consolidated first quarter of the fiscal year ending March
2013, the Company and its domestic consolidated subsidiaries have changed to the straight-line method for
depreciating property, plant, and equipment.
In conjunction with this change in depreciation method, net income by segment for the consolidated second quarter
increased by ¥118 million (Functional Materials), ¥83 million (Advanced Materials & Processing), ¥393 million(Electronics), ¥87 million (Automotive & Energy), ¥58 million (Life & Healthcare), and ¥121 million (Corporate).
- 14 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

(Changes in Accounting Estimates)
Changes in the Estimated Useful Lives of Property, Plant, and Equipment
The Company and some consolidated subsidiaries have changed the estimated useful lives of certain items ofproperty, plant, and equipment beginning with the consolidated first quarter of the fiscal year ending March 2013.
In conjunction with this change, Electronics segment income for the consolidated cumulative second quarterdecreased by ¥43 million compared with segment income calculated using the former useful lives.

- 15 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2013

4. Supplementary Information(1) Overseas Sales
Six months ended September 30, 2011 (consolidated)
I

Overseas sales(Millions of yen)II

Consolidated sales(Millions of yen)

III Ratio of overseas sales toconsolidated sales (%)

Northeast Asia

Southeast Asia

North America

Europe & Others

72,97137,19810,809

7,587

Total
128,566
308,494

23.6

12.1

3.5

2.5

Northeast Asia

Southeast Asia

North America

Europe & Others

88,39842,98011,656

7,721

41.7

Six months ended September 30, 2012 (consolidated)
I

Overseas sales(Millions of yen)II

Consolidated sales(Millions of yen)

III Ratio of overseas sales toconsolidated sales (%)

Total
150,757
335,549

26.3

12.8

3.5

2.3

(Note)
1. Sales in overseas markets consist of net sales of the Company and consolidated subsidiaries in other countries or regions.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Northeast Asia......Taiwan, China(2) Southeast Asia......Singapore, Thailand(3) North America......U.S.
(4) Europe & Others......Germany- 16 -

44.9