Consolidated Financial Statements for the First Quarter of Fiscal Year Ending March 31, 2009
July 30, 2008
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
http://www.nagase.co.jp

Code number: 8012
Representative: Hiroshi Nagase, Representative Director and President
Contact:
Masanori Furukawa, Manager, Corporate Accounting Division
Filing of Quarterly Report (scheduled): August 12, 2008

Tel. 81-3-3665-3103(Note: Amounts have been rounded down to the nearest million yen.)

1. Results for the First Quarter of the Fiscal Year Ending March 31, 2009 (April 1, 2008 – June 30, 2008)(1) Net Sales and Income
Net sales(¥ million)
Three months ended June 30, 2008
Three months ended June 30, 2007

187,709
179,508
Net income(¥ million)

Three months ended June 30, 2008
Three months ended June 30, 2007

3,121
(5,519)(Percentages represent change compared with the previous first quarter.)Ordinary
Operating
Year-on-year
Year-on-year
Year-on-year
incomeincomechange (%)
change (%)
change (%)(¥ million)(¥ million)–
4,673
–
5,396
–
4.9
5,100(7.4)
5,828(6.4)
Year-on-yearchange(%)––

Earnings per share(¥)

Earnings
per share (diluted) (¥)

24.28(42.98)

24.27
–

(2) Financial Position
Total assets
Net assets
Net worth ratio
Net assets(¥ million)(¥ million)(%)
per share (¥)
Three months ended June 30, 2008
407,315
208,15849.2
1,560.01
Fiscal year ended March 31, 2008
419,869
208,37747.8
1,559.97(Reference) Equity capital: Three months ended June 30, 2008: ¥200,590 million; Fiscal year ended March 31, 2008: ¥200,554 million

2. Dividends
Dividends per share (¥)
3rd quarter–––––––

1st quarter2nd quarter
Fiscal year ended March 31, 2008–––––––––
Fiscal year ending March 31, 2009
Fiscal year ending March 31, 2009––––––
10.00–(est.)
Note: Revisions to projected dividends during the three months ended June 30, 2008: NoYear-end
17.00––––––

Full year
17.00––––––

10.00

20.00

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2009
(April 1, 2008 – March 31, 2009)(Percentages represent change compared to the previous fiscal year or cumulative consolidated second quarter, as applicable.)
Earnings
Net sales
Operating income
Ordinary income
Net income
per share(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)
Cumulative 2nd quarter
385,000–
10,600–
11,100–6,500–
50.55
Full year
770,000
0.7
21,000(8.9)
22,000(11.4)
13,00029.9
101.10Note: Revisions to projected consolidated results during the three months ended June 30, 2008: No1

4.

Other
(1) Changes in major subsidiaries during the period (changes in specified subsidiaries due to changes in the scope ofconsolidation): No(2) Use of simplified accounting methods or special accounting methods for preparation of quarterly financial
statements: Yes
See “4. Other” of “Qualitative Information and Financial Statements” on page 4.
(3) Changes in accounting rules, procedures, presentation method, etc., for the quarterly Consolidated FinancialStatements (changes in material items that form the basis for the preparation of the quarterly consolidated financialstatements)(a) Changes in consolidated accounting methods: Yes(b) Changes other than (a) above: Yes
See “4. Other” of “Qualitative Information and Financial Statements” on page 4.
(4) Number of shares issued and outstanding (common stock)(a) Number of shares at end of period (including treasury stock):Three months ended June 30, 2008: 138,408,285 shares; Fiscal year ended March 31, 2008: 138,408,285 shares(b) Treasury stock at end of period:
Three months ended June 30, 2008: 9,825,850 shares; Fiscal year ended March 31, 2008: 9,844,934 shares(c) Average number of shares during the period:
Three months ended June 30, 2008: 128,569,083; Three months ended June 30, 2007: 128,430,109
Note: Cautionary Remark Regarding Forward-Looking Statements
1. The projected consolidated results for the fiscal year ending March 31, 2009 have not been revised from projections
announced on April 30, 2008. The projected consolidated results for the fiscal year contained in this document are based on
infomation currently available to the Company on the date of release. Due to various factors, actual results may differ
materially from the forecast.
2. Effective from the fiscal year ending March 31, 2009, the Company applies the “Accounting Standard for QuarterlyFinancial Reporting” (ASBJ Statement No. 12) and its Implementation Guidance, “Guidance on Accounting Standard for
Quarterly Financial Reporting” (ASBJ Guidance No. 14). Quarterly consolidated financial statements have been preparedin accordance with the “Regulation for Quarterly Consolidated Financial Reporting.”

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Qualitative Information and Financial Statements
1. Qualitative Information on Consolidated Operating Results(1) Summary of Overall Performance
During the first quarter of the fiscal year ending March 31, 2009, the three months ended June 30, 2008, theJapanese economy was at a standstill with slowing corporate capital investment and consumer spending. In theglobal economy, the risk of an economic downturn is growing, with concerns that a possible economic recession in
the United States due to the subprime mortgage crisis may have repercussions in Asia.
Under these conditions, domestic sales for the first quarter increased 6.4 percent compared with the same
period of the previous fiscal year to ¥108.43 billion and overseas sales increased 2.2 percent to ¥79.27 billion for
total net sales of ¥187.70 billion, a 4.6 percent increase.
Gross profit increased 2.5 percent compared with the same period of the previous fiscal year to ¥19.52 billion
due to the increase in sales, but selling, general and administrative expenses increased due to factors including
amortization of actuarial gain in retirement benefit accounting. Consequently, operating income decreased 8.4
percent to ¥4.67 billion and ordinary income decreased 7.4 percent to ¥5.39 billion. However, an extraordinary lossof ¥14.3 billion recorded in the same period of the previous fiscal year related to the voluntary recall of products
had no significant effect on the three months ended June 30, 2008, and net income was ¥3.12 billion.
(2) Segment Summary[Chemicals]

Sales: ¥69.96 billion, a 10.8 percent increase from the same period of the previous fiscal year

Overall sales were strong in the Chemicals segment. Sales increased in the performance chemicals business,
which handles products such as raw materials for paint and urethane, and raw materials and additives for plastics,
due in part to the effect of a price increase for raw materials. In addition, sales expanded in the color and imaging
business, which handles pigments, dyestuffs and other products related to color, and in the specialty chemicals
business, which handles a wide range of products including surfactants, industrial oil solutions and organic
synthetic raw materials such as silicone and fluorochemicals.
[Plastics]
Sales: ¥65.56 billion, a 7.9 percent increase from the same period of the previous fiscal year
Sales were firm in Asia, centered on Thailand and elsewhere in the ASEAN region and eastern China including
Shanghai. Despite a decrease in domestic sales for precision instruments and electronics applications and a slight
drop in sales of building and packaging materials, automotive-related sales grew, and overall sales in the Plastics
segment increased.
[Electronics] Sales: ¥37.99 billion, a 7.2 percent decrease from the same period of the previous fiscal year
Sales continued to expand for precision abrasive materials and other products handled by the information andfunctional materials business. Although formulated epoxy resin and chemical sales increased, sales in the electronic
chemicals business rose only slightly due to a decrease in sales of chemical supply and control equipment used in
LCDs and semiconductor front-end processing. However, sales in the display business, which primarily handles
processing of components for LCDs and electronic equipment, decreased significantly compared with the same
period of the previous fiscal year. As a result, overall segment sales decreased.
[Life Sciences] Sales: ¥ 13.74 billion, a 1.8 percent increase from the same period of the previous fiscal year
Overall segment sales increased slightly. Despite an increase in sales of pharmaceutical intermediates in thefine chemicals business, sales of agricultural chemicals and other products decreased. Sales increased slightly in thebeauty care business, which handles cosmetics and health foods.
[Others]
Sales: ¥0.43 billion, a 62.1 percent decrease from the same period of the previous fiscal year
Segment sales decreased significantly due to the voluntary recall of portable DVD players and other products
and the suspension of sales of related products that began in the previous fiscal year.

2. Qualitative Information on Consolidated Financial Position(1) Assets, Liabilities and Net Assets
Total assets decreased ¥12.55 billion from the end of the previous fiscal year to ¥407.31 billion, mainly due todecreases in notes and accounts receivable and cash and cash equivalents.
Despite an increase in long-term debt, total liabilities decreased ¥12.33 billion from the end of the previous
fiscal year to ¥199.15 billion due to factors including decreases in short-term loans and notes and accounts payable.
Net assets decreased ¥0.21 billion from the end of the previous fiscal year to ¥208.15 billion due to factors
including a decrease in translation adjustments, despite increases in retained earnings from net income and net
unrealized holding gain on securities.
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As a result, the net worth ratio increased 1.4 percentage points to 49.2 percent from 47.8 percent at the end of
the previous fiscal year.
(2) Cash FlowsNet cash provided by operating activities was ¥9.36 billion, due to factors including a decrease in working
capital and net income before income taxes and minority interests.
Net cash used in investing activities was ¥2.65 billion, mainly as a result of purchases of property andequipment.
Net cash used in financing activities was ¥6.81 billion, due to a decrease in short-term loans and the payment ofdividends, despite proceeds from long-term debt.
As a result, the balance of cash and cash equivalents at June 30, 2008 was ¥20.12 billion, a decrease of ¥3.35
billion from the end of the previous fiscal year.

3. Qualitative Information on Projected Consolidated Results
At present, there is no change to the consolidated and non-consolidated performance forecasts announced onApril 30, 2008.

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
The Company uses special quarterly accounting methods to determine income tax payments, including
calculations for some consolidated subsidiaries using the estimated annual effective tax rate based on thenormal effective statutory tax rate.
(3) Changes in Consolidated Accounting Rules, Procedures, Presentation Method, etc. for the Quarterly
Consolidated Financial Statements(a) Effective from the three months ended June 30, 2008, the Company applies the “Accounting Standard for
Quarterly Financial Reporting” (ASBJ Statement No. 12, issued March 14, 2007) and its Implementation
Guidance, “Guidance on Accounting Standard for Quarterly Financial Reporting” (ASBJ Guidance No. 14,
issued March 14, 2007). Quarterly consolidated financial statements have been prepared in accordance with the“Regulation for Quarterly Consolidated Financial Reporting.”(b) Effective from the three months ended June 30, 2008, the Company applies the “Accounting Standard for
Measurement of Inventories” (ASBJ Statement No. 9, issued July 5, 2006), changing from primarily using thecost or market method to the average method (method for reducing the carrying amount of inventories below
book value due to decline in profitability) for the valuation of inventories held for normal sale. As a result,gross profit, operating income, ordinary income and income before income taxes and minority interests eachdecreased by ¥428 million.
(c) Effective from the three months ended June 30, 2008, Company applies the “Practical Solution on Unificationof Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ PITF
No. 18, issued May 17, 2006) and carries out necessary consolidated financial adjustments. There is no effecton income from these changes.
(d) Previously, finance lease transactions without title transfer were accounted for as operating leases. However,companies are able to apply “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13, issued
June 17, 1993 (First Committee of Business Accounting Council), revised March 30, 2007) and its
Implementation Guidance, “Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No.
16 (issued January 18, 1994 (Japanese Institute of Certified Public Accountants), revised March 30, 2007) on
quarterly financial statements of fiscal years beginning on or after April 1, 2008. Accordingly, the Company
has applied the revised accounting standard from the three months ended June 30, 2008. The revised accounting
standard requires that all finance lease transactions be capitalized.
In addition, leased assets related to finance lease transactions without title transfer are depreciated on astraight-line basis, with the lease periods as their useful lives and no residual value.
The Company will continue to account for finance lease transactions without title transfer where the leasetransaction started before the first year of application as operating leases.
There is no effect on income from these changes.

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