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Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
Nippon kayaku _summary_3q_2011(1)
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Nippon kayaku _summary_3q_2011(1)

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  • 1. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011 March 29, 2011Listed company: Nippon Kayaku Co., Ltd. (URL http://www.nipponkayaku.co.jp/)Code No.: 4272Listed stock exchange: Tokyo Stock Exchange, First SectionRepresentative: (Position) President, (Name) Akira MandaiPerson in charge of inquiries: (Position) Member of the Board, Head of Financial Group, (Name) Ryoichi Araki1. Consolidated Business Results for First Three Quarters of Fiscal Year Ending May 31, 2011 (June 1, 2010–February 28, 2011) (Figures shown are rounded down to the nearest million yen.)(1) Consolidated Operating Results (Percentages indicate amount of change from the previous year.) Net sales Operating income Ordinary income Millions of yen % Millions of yen % Millions of yen % First three quarters of fiscal year ending 111,020 6.9 15,870 35.7 14,989 29.0 May 31, 2011 First three quarters of fiscal year ended May 103,876 1.7 11,699 44.4 11,618 76.6 31, 2010 First-three-quarter net First-three-quarter diluted First-three-quarter net income income per share net income per share Millions of yen % Yen YenFirst three quarters offiscal year ending 7,417 2.7 40.89 40.89May 31, 2011First three quarters offiscal year ended May 7,220 308.1 39.78 39.7731, 2010(2) Consolidated Financial Position Total assets Net assets Equity ratio Net assets per share Millions of yen Millions of yen % Yen As of February 200,536 131,018 61.5 679.90 28, 2011 As of May 31, 2010 202,641 127,829 59.4 663.88Reference: Equity As of February 28, 2011: 123,288 million yen As of May 31, 2010: 120,441 million yen Equity consists of shareholders’ equity and valuation and translation adjustments.2. Status of Dividends Dividend amount per share End of first quarter End of second quarter End of third quarter End of year Total YenFiscal year ended May – 10.00 – 10.00 20.0031, 2010Fiscal year ending – 10.00 –May 31, 2011Fiscal year endingMay 31, 2011 10.00 20.00(forecast)Note: Corrections in this quarter to the expected dividend: None3. Consolidated Business Results Forecasts for Fiscal Year Ending May 31, 2011 (June 1, 2010–May 31, 2011) (Percentages indicate amount of change from the previous year.) Net sales Operating income Ordinary income Net income Net income per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % YenFull year 151,000 7.1 19,500 21.9 19,000 18.4 11,500 16.5 63.40Note: Corrections in this quarter to the forecast consolidated business results: None This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan.
  • 2. 4. Other (for details, refer to “Other Information” on page 4 of the Supplemental Information)(1) Significant changes in subsidiaries during the third quarter: None Note: This refers to whether or not there were changes in designated subsidiaries that result in changes in scope of consolidation during the third quarter under review.(2) Adoption of simplified accounting processes or special accounting processes: None Note: This refers to whether or not there was the adoption of simplified accounting processes or special accounting processes for creation of the quarterly consolidated financial statements.(3) Changes to accounting principles, procedures, and methods of presentation, or other items [1] Changes associated with revision of accounting standards or similar items: Yes [2] Changes other than [1]: None Note: This refers to whether or not there were changes in accounting principles and procedures, and methods of presentation, or other items adopted to prepare the quarterly consolidated financial statements, as described in the “Significant Changes in the Basis of Preparing the Quarterly Consolidated Financial Statements.”(4) Number of shares issued (common stock) [1] Number of shares issued at end of the fiscal period (including treasury stock) As of February 28, 2011: 182,503,570 shares As of May 31, 2010: 182,503,570 shares [2] Number of treasury stock shares at end of the fiscal period As of February 28, 2011: 1,168,838 shares As of May 31, 2010: 1,083,291 shares [3] Average number of shares during the first three quarters of the fiscal year First three quarters of fiscal year ending May 31, 2011: 181,387,614 shares First three quarters of fiscal year ended May 31, 2010: 181,498,536 shares* Information about quarterly review procedure execution:This report of quarterly financial results is outside the scope of the quarterly report review procedures under theFinancial Instruments and Exchange Act in Japan. At the time of the disclosure of this report, the quarterly reportreview procedures under the Financial Instruments and Exchange Act had not been completed.* Explanation related to appropriate use of the business results forecasts, and other notesThe business results forecasts and other descriptions related to the future in this report are based on information thatwas obtainable as of the date this report was announced, and on assumptions pertaining to uncertain factors that canaffect future business results. The actual business results may vary greatly due to a variety of future factors. Fordetails on the business results forecasts, refer to “(3) Qualitative Information Concerning Forecasts for ConsolidatedBusiness Results” under “1. Qualitative Information on Consolidated Financial Results” on page 3 of theSupplemental Information. This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan.
  • 3. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011Supplemental InformationTable of Contents1. Qualitative Information on Consolidated Financial Results 2 (1) Qualitative Information Concerning the Consolidated Business Results 2 (2) Qualitative Information Concerning the Consolidated Financial Position 3 (3) Qualitative Information Concerning Forecasts for Consolidated Business Results 32. Other Information (1) Significant changes in subsidiaries 4 (2) Adoption of simplified accounting processes or special accounting processes 4 (3) Changes to accounting principles, procedures, and methods of presentation, or other items 4 (4) Important events affecting going concern assumption 43. Quarterly Consolidated Financial Statements 5 (1) Consolidated Balance Sheets 5 (2) Consolidated Profit and Loss Statement 7 (3) Consolidated Statement of Cash Flows 8 (4) Notes concerning going concern assumption 10 (5) Segment information 10 (6) Notes in case of significant changes in the amount of shareholders’ equity 12 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―1―
  • 4. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 20111. Qualitative Information on Consolidated Financial Results(1) Qualitative Information Concerning the Consolidated Business ResultsThe Japanese economy during the first three quarters of this consolidated fiscal year (June 1, 2010–February 28,2011) is just emerging from its period of stagnation. There was a movement toward a recovery in businessproduction supported by exports to China and other emerging nations. However the future remains uncertain, withfears of a worsening employment situation and increasingly fierce price competition due to prolonged deflation setagainst a background of the high value of the yen and the end of government stimulus packages. Under such conditions, the Nippon Kayaku Group launched Phase I of its three-year mid-term business plan.Aiming for a stronger profit structure in addition to stronger overseas operations and optimal allocation of businessresources into priority business operations, the Group took steps to further reduce costs, restructure its productlineup, and optimize production sites. As a result, due to factors including the strong performance of the functional chemicals business and a recoveryin the pharmaceuticals business and safety systems business, sales during the first three quarters of this consolidatedfiscal year were 111.020 billion yen, an increase of 7.144 billion yen (6.9%) from the same period in the previousyear. Due to the strong performance of the functional chemicals business, operating income was 15.870 billion yen, anincrease of 4.171 billion yen (35.7%) from the same period in the previous year. Ordinary income was 14.989 billion yen, an increase of 3.370 billion yen (29.0%) from the same period in theprevious year. Net income for the first three quarters was 7.417 billion yen, an increase of 196 million yen (2.7%) from thesame period in the previous year.Performance by business segment is as described below.[Functional chemicals business]In the functional chemicals business, although sales of epoxy resins for semiconductor encapsulation were affectedby customer production adjustments, results overall were on approximately the same level as the same period in thefiscal year. Sales of UV-curing resins were down from the level of the same period in the previous year, and sales forthe functional materials business as a whole were also down. In the electronic materials business, although sales of films for plasma displays were lower than the same periodin the previous year, sales of resins for optical disks, colors for inkjet printers, and LCD sealants were higher. AtPolatechno, due to strong sales of polarizing films for LCD displays, sales exceeded the level from the same periodin the previous year. Sales for the electronic materials business as a whole exceeded the level from the same periodof the previous year. In the catalyst business, there was a recovery in demand for catalysts used in the production of acrylic acid, andsales were higher than the same period in the previous year. In the color chemicals business, sales exceeded the level from the same period in the previous year due to strongsales of textile dyes. As a result of the above, sales in the functional chemicals business were 53.219 billion yen, and operatingincome was 9.034 billion yen.[Pharmaceuticals business]In the area of anti-cancer drugs for the Japanese domestic market, sales of “BICALUTAMIDE Tab. NK,”“PACLITAXEL Inj. NK,” and “CARBOPLATIN Intravenous Inj. NK” were strong and exceeded the levels of thesame period in the previous year. On the other hand, the effects of competitor products and other factors resulted inlower sales of “arterial-injection IA CALL” and “RANDA Inj.” compared with the same period in the previous year.Sales of pharmaceutical products for the Japanese domestic market as a whole were higher than the same period inthe previous year. In the area of exports, sales of “BLEO” (anti-cancer drug) were lower than in the same period of the previousyear, and exports as a whole were lower. In the area of active pharmaceutical ingredients for the Japanese domestic market, sales of raw materials fordrugs were up, and sales of active pharmaceutical ingredients for the Japanese domestic market as a whole alsoexceeded the level of the same period of the previous year. Sales of diagnostic agents exceeded the level from the same period of the previous year. As a result of the above, sales in the pharmaceuticals business were 36.959 billion yen, and operating incomewas 7.706 billion yen.[Safety systems business]Sales of micro gas generators for seatbelt pretensioners were higher than the same period in the previous year. Salesof airbag inflators were also higher as a result of growing sales for use in environmentally friendly cars and for the This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―2―
  • 5. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011Chinese market. As a result of the above, sales in the safety systems business were 13.906 billion yen and operating income was1.007 billion yen.[Others]In the agrochemicals business, both domestic sales and exports were down from the same period in the previousyear. Sales in real estate and other business were also down from the same period in the previous year. As a result of the above, sales in other business areas were 6.935 billion yen and operating income was 1.835billion yen.(2) Qualitative Information Concerning the Consolidated Financial Position[1] Assets, liabilities, and net assetsTotal assets were 200.536 billion yen, a decrease of 2.104 billion yen from the end of the previous consolidatedfiscal year. Current assets decreased by 329 million yen, and fixed assets decreased by 1.663 billion yen. Despite anincrease in investment securities, this result was primarily due to factors such as a decrease in tangible fixed assets. Liabilities were 69.518 billion yen, a decrease of 5.293 billion yen from the end of the previous consolidatedfiscal year. Current liabilities decreased by 967 million yen. Although there was an increase in accounts payable andshort-term loans payable, this result was primarily due to factors such as a decrease in accrued expenses andcorporation tax payable. Fixed liabilities decreased by 4.325 billion yen. This reduction was primarily due torepayment of loans and long-term deposits payable. Net assets were 131.018 billion yen, an increase of 3.188 billion yen from the end of the previous consolidatedfiscal year. Despite a decrease in translation adjustments and other asset-reducing changes, this increase occurreddue to an increase in retained earnings and other factors.[2] Cash flowThe balance of cash and cash equivalents at the end of the first three quarters of this consolidated fiscal year was35.223 billion yen, a decrease of 590 million yen from the end of the previous consolidated fiscal year. (The balanceat the end of the same period in the previous year was 34.983 billion yen.) The status of each cash flow is describedbelow. Net cash provided by operating activities amounted to 12.300 billion yen. (Net cash provided during the sameperiod in the previous year was 11.739 billion yen.) Despite an increase in advance payments of 2.574 billion yen, adecrease of reserve allowances of 1.543 billion yen, a decrease in accrued expenses of 1.304 billion yen, and anincrease in inventory assets of 1.124 billion yen, this positive cash flow was due to first-three-quarter net incomebefore income taxes and minority interests of 14.157 billion yen, depreciation and amortization of 6.591 billion yen,and an increase in notes and accounts payable of 1.700 billion yen. Net cash expended in investing activities totaled 6.395 billion yen. (Net cash expended during the same period inthe previous year was 4.303 billion yen.) Despite income of 800 million yen resulting from sales of stocks ofsubsidiaries and affiliates, this result was primarily due to payments of 5.854 billion yen for the purchase of tangiblefixed assets and payments of 277 million yen for the purchase of intangible fixed assets. Net cash expended in financing activities was 5.901 billion yen. (Net cash expended during the same period inthe previous year was 7.325 billion yen.) This was primarily due to payments of 2.903 billion yen for repayment oflong-term loans, a 3.516 billion yen payment of dividends, and a 739 million yen repayment of the constructioncooperation fund.(3) Qualitative Information Concerning Forecasts for Consolidated Business ResultsDespite the trend of recovery centering mainly on exports, the business environment that will surround the NipponKayaku Group in the future remains uncertain. The Group is working to construct a strong profit structure that isable to adapt to changes in the business environment, and in order to expand profits, we are accelerating our entryinto new growth markets through means such as research and development related to materials for environmentaland energy-saving purposes. The earthquake and tsunami that struck across northeastern Japan on March 11, 2011 affected our company’soperations, including a stoppage of operations at some Nippon Kayaku plants. The effects on the company’sperformance during this fiscal year are currently under investigation. In the event that a severe effect on theperformance of the Nippon Kayaku Group is expected, notification will be provided immediately. This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―3―
  • 6. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 20112. Other Information(1) Significant changes in subsidiaries during the third quarter No items to report(2) Adoption of simplified accounting processes or special accounting processes No items to report(3) Changes to accounting principles, procedures, and methods of presentation, or other items The “Accounting Standards for Asset Retirement Obligations” (ASBJ Statement No. 18, March 31, 2008) and “Guidance on Accounting Standards for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008) have applied since the first quarter of the current consolidated fiscal year. As a result, operating income and ordinary income for the first three quarters of the current consolidated fiscal year have decreased by two million yen respectively, while first-three-quarter net income before income taxes and minority interests has decreased by 71 million yen. Also, the change in asset retirement obligations due to the commencement of application of said accounting standards is 102 million yen. (4) Important events affecting going concern assumption No items to report This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―4―
  • 7. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 20113. Quarterly Consolidated Financial Statements(1) Consolidated Balance Sheets As of February 28, As of May 31, 2010 2011 Millions of yen Assets Current assets Cash and savings 18,189 17,427 Notes and accounts receivable 47,180 47,181 Marketable securities 18,151 18,512 Merchandise and products 15,929 16,342 Work in process 1,817 1,927 Raw materials and stores 7,994 6,886 Other 8,029 9,439 Allowance for doubtful receivables (49) (145) Total current assets 117,242 117,572 Fixed assets Tangible fixed assets Buildings and structures, net 31,419 31,800 Machinery and transport equipment, net 15,365 15,957 Other, net 13,350 13,879 Total tangible fixed assets 60,135 61,637 Intangible fixed assets Goodwill 1,512 1,835 Other 2,262 2,442 Total intangible fixed assets 3,774 4,277 Investments and other assets Investment securities 14,601 13,896 Other 4,561 4,944 Allowance for doubtful receivables (90) (110) Total investments and other assets 19,072 18,730 Total fixed assets 82,982 84,646 Deferred assets 310 422 Total assets 200,536 202,641 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―5―
  • 8. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011 As of February 28, As of May 31, 2010 2011 Millions of yenLiabilities Current liabilities Notes and accounts payable 15,780 14,531 Short-term loans payables 13,135 12,147 Corporation tax payable 714 2,055 Other 12,348 14,213 Total current liabilities 41,979 42,947 Fixed liabilities Long-term loans payable 8,617 11,672 Allowance for employee retirement benefits 3,706 4,584 Negative goodwill 529 643 Other 14,684 14,964 Total fixed liabilities 27,538 31,864 Total liabilities 69,518 74,812Net assets Shareholders’ equity Common stock 14,932 14,932 Additional paid-in capital 17,265 17,264 Retained earnings 92,403 88,613 Treasury stock (786) (713) Total shareholders’ equity 123,815 120,097 Valuation and translation adjustments Net unrealized gains on other securities 854 460 Translation adjustments (1,380) (116) Total valuation and translation adjustments (526) 343 Minority interests 7,729 7,387 Total net assets 131,018 127,829Total liabilities and net assets 200,536 202,641 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―6―
  • 9. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011(2) Consolidated Profit and Loss Statement First three quarters of First three quarters of fiscal year ended May fiscal year ending May 31, 2010 31, 2011 Millions of yen Net sales 103,876 111,020 Cost of sales 62,585 66,065 Gross profit on sales 41,291 44,955 Selling, general and administrative expenses 29,591 29,085 Operating income 11,699 15,870 Non-operating income Interest income 117 68 Dividend income 303 289 Amortization of negative goodwill 77 114 Equity in earnings of affiliates 113 188 Other miscellaneous income 612 884 Total non-operating income 1,224 1,545 Non-operating expenses Interest expense 374 270 Exchange loss 562 1,657 Other miscellaneous losses 367 499 Total non-operating expenses 1,304 2,427 Ordinary income 11,618 14,989 Extraordinary income Income on sale of fixed assets 38 18 Total extraordinary income 38 18 Extraordinary loss Fixed asset disposal loss 302 442 Loss on valuation of investment securities 1,628 128 Loss on liquidation of subsidiaries and affiliates – 210 Loss on adjustment for changes of accounting – 68 standard for asset retirement obligations Impairment loss 2,385 – Provision for loss on liquidation of subsidiaries 571 – and affiliates Total extraordinary loss 4,888 850 First-three-quarter net income before income taxes 6,769 14,157 and minority interests Corporation tax, inhabitant tax, and business tax 4,031 1,702 Income taxes deferred (4,785) 4,395 Total income taxes (753) 6,097 First-three-quarter net income before minority interests – 8,059 Minority interests in income 301 642 First-three-quarter net income 7,220 7,417 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―7―
  • 10. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011(3) Consolidated Statement of Cash Flows First three quarters of First three quarters of fiscal year ended May fiscal year ending May 31, 2010 31, 2011 Millions of yen Cash flows from operating activities First-three-quarter net income before income taxes 6,769 14,157 and minority interests Depreciation and amortization 7,496 6,591 Impairment loss 2,385 – Increase (decrease) in reserve allowance 263 (1,543) Interest and dividend income (420) (358) Interest expense 374 270 Equity in (earnings) losses of affiliates (113) (188) Loss (gain) on sale of tangible fixed assets (38) (18) Loss (gain) on disposal of tangible fixed assets 302 442 Loss on adjustment for changes of accounting – 68 standard for asset retirement obligations Loss (gain) on sale of investment securities – (2) Loss (gain) on valuation of investment securities 1,628 128 (Increase) decrease in notes and accounts receivable (5,713) (655) (Increase) decrease in inventory assets (2,510) (1,124) (Increase) decrease in prepaid expenses (250) (205) (Increase) decrease in accrued revenue 211 (41) Decrease (increase) in advance payments – (2,574) Increase (decrease) in notes and accounts payable 6,333 1,700 Increase (decrease) in accrued amount payable (357) (517) Increase (decrease) in accrued expenses (1,183) (1,304) Other 954 1,187 Subtotal 16,131 16,012 Interest and dividends received 444 394 Interest paid (321) (214) Income taxes paid (4,847) (3,899) Income taxes refund 332 7 Net cash provided by operating activities 11,739 12,300 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―8―
  • 11. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011 First three quarters of First three quarters of fiscal year ended May fiscal year ending May 31, 2010 31, 2011 Millions of yenCash flows from investing activities Purchase of time deposits (120) (0) Proceeds from repayment of time deposits 96 0 Purchase of tangible fixed assets (4,481) (5,854) Proceeds from sales of tangible fixed assets 125 27 Purchase of intangible fixed assets (67) (277) Purchase of marketable securities (1,499) (2,997) Proceeds from redemption of securities 1,499 1,998 Purchase of investment securities (47) – Proceeds from sales of investment securities – 24 Proceeds from sales of stocks of subsidiaries 800 800 and affiliates Payments for long-term prepaid expenses (62) (48) Removal loss of fixed assets (156) (353) Purchase of investments in subsidiaries (229) – (Increase) decrease in short-term loans receivable (125) 170 Other (33) 113 Net cash used in investing activities (4,303) (6,395)Cash flows from financing activities Purchase of treasury stock of subsidiaries in (3,443) – consolidation Increase (decrease) in short-term loans payable, net 1,661 1,451 Proceeds from long-term loans payable 1,500 – Repayment of long-term loans (2,467) (2,903) Repayment of construction cooperation fund (739) (739) Dividends paid (3,543) (3,516) Dividends paid to minority shareholders (195) (98) Other (98) (95) Net cash provided by financing activities (7,325) (5,901)Effect of exchange rate changes on cash (188) (593)and cash equivalentsIncrease (decrease) in cash and cash equivalents (78) (590)Cash and cash equivalents at beginning of year 35,061 35,813Cash and cash equivalents at end of first three quarters 34,983 35,223 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―9―
  • 12. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011(4) Notes concerning going concern assumption No items to report(5) Segment informationa. Segment information by type of businessFirst three quarters of the previous consolidated fiscal year (June 1, 2009–February 28, 2010) Functional Pharma- Safety Other Eliminations chemicals ceuticals systems Total Consolidated businesses and corporate business business business Millions of yen Sales 47,596 36,175 13,012 7,091 103,876 – 103,876 (1) Sales to third parties (2) Intersegment sales and transfers 40 12 – 20 72 (72) – Total 47,636 36,187 13,012 7,111 103,949 (72) 103,876 Operating income 6,251 7,382 37 1,772 15,444 (3,745) 11,699 Note 1: The business segments are based on the sales summary classification. 2: Primary products in each segment Business segment Sales segment Primary products Functional Functional Epoxy resins, Epoxy resin curers, Combustion retardants for synthetic chemicals business materials resins, UV-curing type resins, Polyimide/polyamide resins, Advanced chemicals Electronic Components for LCD displays, LCD projector components, materials Components for X-ray analysis systems, Functional films, Resins for optical disks, Sealants for LCD displays, Functional colors, Colors for inkjet printers Catalysts Catalysts for the production of acrylic acid and methacrylic acid, Plant licensing business Color chemicals Disperse dyes, Cationic dyes, Acidic dyes, Reactive dyes, Direct dyes, Sulfur dyes, Fluorescent dyes, Functional chemicals for textiles and paper, Special dyes for non-textile applications Pharmaceuticals Pharmaceuticals Anti-cancer agents, Neurological agents, Circulatory system agents, business Digestive system agents, Metabolic agents, Antibiotics, Anti-inflammatory analgesic agents, Radiopharmaceuticals, Medical devices, Pharmaceutical API and intermediates, Food and food additives, Preservatives for food quality, Veterinary pharmaceuticals, Animal feedstuffs and feedstuff additives, Diagnostics Safety systems Safety systems Airbag inflators, Micro gas generators for seatbelt pretensioners, business Squibs Other businesses Others Insecticides, Herbicides, Fungicides, Acaricide, Public hygiene insecticides, Soil disinfectant, Animal repellents, Biological pesticides, Real estate business This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―10―
  • 13. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011b. Information by geographic segmentFirst three quarters of the previous consolidated fiscal year (June 1, 2009–February 28, 2010) Japan Other regions Total Eliminations Consolidated and corporate Millions of yen Sales (1) Sales to third parties 90,011 13,865 103,876 – 103,876 (2) Intersegment sales and transfers 4,223 4,155 8,378 (8,378) – Total 94,234 18,020 112,254 (8,378) 103,876 Operating income 14,940 561 15,501 (3,802) 11,699 Note 1: The country and region segments are based on geographic proximity. 2: Primary countries and regions in segments other than “Japan” Other regions: USA, Czech Republic, Hong Kong, Chinac. Overseas salesFirst three quarters of the previous consolidated fiscal year (June 1, 2009–February 28, 2010)) Asia Other regions TotalI. Overseas sales (millions of yen) 21,493 13,134 34,628II. Consolidated sales (millions of yen) – – 103,876III. Percentage of consolidated sales occupied by overseas sales 20.7 12.6 33.3 Note 1: The country and region segments are based on geographic proximity. 2: Primary countries and regions in each segment (1) Asia: China, Hong Kong, Taiwan (2) Other regions: USA, Germany 3: Overseas sales are the sales by Nippon Kayaku and its consolidated subsidiaries in countries and regions outside of Japan.Segment information(Additional information)The “Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”(ASBJ statements No. 17, March 27, 2009) and “Guidance on Accounting Disclosures about Standard forDisclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20, March 21, 2008)have applied since the first quarter of the current consolidated fiscal year.[1] Summary of reportable segmentsThe reportable segments of the Nippon Kayaku Group are structural units of the Group for which separate financialinformation can be acquired. These segments are subject to be examined periodically by the Board of Directors inorder to evaluate business results and make decisions on the allocation of business resources. Groups are established by product for the reportable segments within the Nippon Kayaku Group. Each groupdevelops comprehensive domestic and overseas strategies for the products it handles, and introduces businessactivities accordingly. Therefore, the Nippon Kayaku Group primarily consists of product- and service-specific segments that are basedon business divisions. “Functional chemicals business,” “pharmaceuticals business,” and “safety systems business”are three reportable segments. This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―11―
  • 14. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for Third Quarter of the Fiscal Year Ending May 31, 2011 The types of primary products and services provided by the reportable segments are shown in the table below. Reportable segment Sales segment Primary products Functional Functional Epoxy resins, Epoxy resin curers, Combustion retardants for synthetic chemicals business materials resins, UV-curing type resins, Polyimide/polyamide resins, Advanced chemicals Electronic Components for LCD displays, LCD projector components, materials Components for X-ray analysis systems, Functional films, Resins for optical disks, Sealants for LCD displays, Resist for MEMS, Functional colors, Colors for inkjet printers, Thermal developers Catalysts Catalysts for the production of acrylic acid and methacrylic acid, Plant licensing business Color chemicals Disperse dyes, Cationic dyes, Acidic dyes, Reactive dyes, Direct dyes, Sulfur dyes, Fluorescent dyes, Functional chemicals for textiles and paper, Special dyes for non-textile applications Pharmaceuticals Pharmaceuticals Anti-cancer agents, Neurological agents, Circulatory system agents, business Digestive system agents, Vitamin compounds and other metabolic agents, Radiopharmaceuticals, Chemotherapeutics, Anti-inflammatory analgesic agents, In vitro diagnostic pharmaceuticals, Medical devices, Pharmaceutical API and intermediates, Food and food additives, Preservatives for food quality Safety systems Safety systems Airbag inflators, Micro gas generators for seatbelt pretensioners, Squibs business[2] Information on sales and income (loss) by reportable segmentFirst three quarters of the current consolidated fiscal year (June 1, 2010–February 28, 2011) Reportable segment Adjust- Consoli- Others Functional Pharma- Safety Total ments dated (Note 1) chemicals ceuticals systems Total (Note 2) (Note 3) business business business Millions of yen Sales Sales to third parties 53,219 36,959 13,906 104,084 6,935 111,020 – 111,020 Intersegment sales 24 22 – 47 20 68 (68) - and transfers Total 53,244 36,981 13,906 104,132 6,956 111,089 (68) 111,020 Segment income 9,034 7,706 1,007 17,747 1,835 19,583 (3,712) 15,870Note 1: “Others” indicates business segments that are not included in the reportable segments, including the agrochemicals business and real estate business.Note 2: The -3,712 million yen adjustment to segment income includes a 13 million yen elimination of intersegment transactions and -3,726 million yen corporate expense not allocated to the reportable segments. The corporate expense is mainly a general and administrative expense that is not attributed to the reportable segments.Note 3: Adjustments to segment income are made along with operating income from the quarterly consolidated profit and loss statement.(6) Notes in case of significant changes in the amount of shareholders’ equity No items to report This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―12―

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