Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2011
<Under Japanese GAAP>

July 30, 2010
These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

Nagase & Co., Ltd.
Stock exchange listing: Tokyo, Osaka (First Sections)
Code number: 8012
(http://www.nagase.co.jp)
Representative:
Hiroshi Nagase, Representative Director and President
Contact:
Masanori Furukawa, Manager, Corporate Accounting Division
Filing of Quarterly Report (scheduled): August 12, 2010
Supplementary documents or quarterly financial results: No
Quarterly investors’ meeting: No(Note: Amounts have been rounded down to the nearest million yen.)

1． Consolidated Results for the First Quarter of the Fiscal Year Ending March 31, 2011 (April 1, 2010 toJune 30, 2010)(1) Consolidated Operating Results(Percentages represent changes compared with same period of the previous fiscalyear.)
For the first quarter
ended
June 30, 2010
June 30, 2009

Net sales
Millions ofyen
161,896
131,520%23.1(29.9)

Earningsper shareYen

For the first quarter ended
June 30, 2010
June 30, 2009

Operating income
Millions of%
yen
5,611
248.6
1,609(65.6)

Ordinary income
Millions of%
yen
6,425
209.9
2,072(61.6)

Net income
Millions of%
yen
3,430
244.0
997(68.1)

Earnings per share(diluted)
Yen——

26.69
7.76

(2) Consolidated Financial Position
Total assets

Net assets

Net worth ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

June 30, 2010

366,380

202,14053.1

1,514.05

March 31, 2010

368,088202,75353.1

1,519.61(Reference) Equity capital: As of June 30, 2010: ¥194,628millionAs of March 31, 2010: ¥195,344 million)

2. Dividends
Dividends per share(Record date)

1Q

Interim

3Q

Fiscal Year-End

AnnualFor the year ending

YenYen

Yen

Yen

Yen

March 31, 2010

—March 31, 2011
March31,2011(estimate)

—

7.00

—

9.00

16.00

9.00

—

9.00

18.00

Note: Revisions to projected dividends during the three months ended June 30, 2010: No－1－

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2011
(April 1, 2010 to March 31, 2011)(Percentages represent changes compared with the corresponding periods of the previous fiscal year as applicable)
Net salesThe first half of fiscal
2010
Fiscal 2010
(Full fiscal year)

Operating income

Ordinary income

Earningsper share

Net income

Millions ofyen%Millions ofyen%Millions ofyen% Millions ofyen%

323,000

14.8

7,500

42.5

8,000

38.0

4,600

48.6

35.78

647,000

7.1

15,00014.3

16,200

10.1

9,500

26.0

73.90

Yen

Note: Revisions to projected consolidated results during the three months ended June 30, 2010: No
4. Other (For details, please see “2. Others” on page 4.)(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes
in the scope of consolidation): NoneNew: — (Company name:)

Excluded: — (Company name:)(2) Application of simplified accounting methods or special accounting methods for preparation of quarterly
financial statements: No(3) Changes in accounting principles, procedures and presentation methods in connection with the preparation ofconsolidated financial statements(Recorded under “Changes in significant items considered fundamental to the preparation of consolidatedfinancial statements.”)i.
Changes in accordance with revisions to accounting and other standards: Yesii.

Changes in items other than (i) above: No(4) Number of shares issued and outstanding (common stock)i. Number of shares issued and outstanding as of the fiscal period end (including treasury stock)
As of June 30, 2010:
138,408,285 shares
As of March 31, 2010:
138,408,285 shares
ii. Number of treasury stock as of the fiscal period end
As of June 30, 2010:
9,860,125 shares
As of March 31, 2010:
9,859,357 sharesiii. Average number of shares during the period:
Three months ended June 30, 2010:
128,548,463 shares
Three months ended June 30, 2009:
128,560,758 shares
Indication of quarterly review procedure implementation status
This quarterly earnings report is exempt from the quarterly review procedure based upon the Financial Instruments
and Exchange Act. Furthermore, quarterly consolidated financial statements wereundergoing 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“Qualitative Information on Projected Consolidated Results” in the “Qualitative Information and FinancialStatements” on page 4.

－2－1. Qualitative Information and Financial Statements(1) Qualitative Information and Overview of Consolidated Business Resultsa. General Summary of Results
During the period under review, the Japanese economy was on a recovery track, spurred by robust demand in Asian
countries, most notably China.
Reflecting these circumstances, domestic sales for the first quarter rose 17.2 percent compared with the corresponding
period of the previous fiscal year to ¥97.05 billion and overseas sales surged 33.2 percent to ¥64.84 billion. Total netsales for the period under review became ¥161.89 billion, up 23.1 percent year on year.
On the earnings front, operating income jumped 248.6 percent to ¥5.61 billion and ordinary income surged 209.9
percent to ¥6.42 billion due to the increased net sales. As a result, net income for the first quarter of the fiscal year
under review soared 244.0 percent to ¥3.43 billion.

b. Segment Summary[Chemicals]

Sales: ¥64.11 billion, a 22.3 percent increase from the same period of the previous fiscal year

On the back of the economic recovery, increased demand throughout the overall chemicals industry affected Nagase’s
chemical businesses across the board. Reflecting this, substantial sales improvements were recorded by the chemicals
business, which handles coating materials, urethane materials, plastic raw materials and additives; the colors andimaging business, which handles dyestuffs, pigments and other products related to color; and the specialty chemicalbusiness, which handles a wide range of organic synthesis materials such as surfactants, industrial oil solutions,silicone and fluorochemicals.
[Plastics]

Sales: ¥52.79 billion, a 37.5 percent increase from the same period of the previous fiscal year

During the period under review, overseas sales in the business areas of Northeast Asia, Southeast Asia and North
America grew substantially. In Japan, there were rises in sales of materials for office automation equipment, consumer
electronics, automotives, functional film sheets and plastic molding-related products. As a result, overall sales in thissegment surged.
[Electronics]

Sales: ¥31.79 billion, a 21.1 percent increase from the same period of the previous fiscal year

Sales of display-related products, including LCD display films and touch-panel components, as well as sales ofprecision abrasive materials for hard disks and Silicon Wafers grew significantly during the period under review. Inaddition, sales of chemicals for manufacturing semiconductors and LCD panels increased, reflecting favorable
demand. Epoxy business also grew substantially, owing to applications related to automobiles getting on a recovery
track and robust demand for mobile phones. Furthermore, overseas sales showed considerable growth, resulting in adrastic increase in overall results.
[Life Sciences]

Sales: ¥12.95 billion, an 8.5 percent decrease from the same period of the previous fiscalyear

In the Life Sciences segment, sales of fermentation products in the fine chemicals business were on par with thecorresponding period of the previous fiscal year. Sales of pharmaceutical intermediates and agricultural raw materials,
however, decreased. Although sales in the Beauty Care products business, which handles cosmetics and health foods,remained strong, overall result in the Life Sciences segment declined.
[Other]Sales: ¥0.22 billion, a 22.5 percent decrease from the same period of the previous fiscal year

No specific items to report in this segment during the period under review－3－(2) Qualitative Information on Consolidated Financial Position
Assets, Liabilities and Net Assets
Total assets fell ¥1.70 billion to ¥366.38 billion during the period under review, in spite of an increase in notes andaccounts receivable and inventories due to growth of sales. This was mainly attributable to a decrease in the value ofinvestment securities due to a drop in share prices as well as a decrease in cash and cash equivalents due to increase
in working capitals.
Total liabilities amounted to ¥164.24 billion, down ¥1.09 billion from the previous fiscal year-end. Major factors
leading to this result include a decrease in allowances and deferred income taxes that outstripped an increase in
short-term loans.
Net assets declined ¥0.61 billion to ¥202.14 billion due to a decrease in net unrealized holding gain on investment
securities.
As a result, the net worth ratio remained on par with the previous fiscal year-end at 53.1 percent.
Cash FlowsNet cash provided by operating activities was ¥0.72 billion. This was mainly attributable to a ¥5.83 billion income
before income taxes and minority interests, which offset increase in working capitals due to an increase in notes andaccounts receivable and inventories stemming from sales expansion.
Net cash used in investing activities totaled ¥2.11 billion, reflecting such factors as purchases of property, plant andequipment.
Net cash used in financing activities amounted to ¥0.70 billion due to the payment of dividends, in spite ofincrease in short-term loans.

anIncluding ¥0.20 billion cash and cash equivalents recorded due to the inclusion of a subsidiary in consolidation,
the balance of cash and cash equivalents at June 30, 2010 was ¥41.10 billion, a decrease of ¥1.70 billion from the endof the previous fiscal year.
(3) Qualitative Information on Projected Consolidated Results
The projected full-year consolidated results for fiscal 2011 announced on April 28, 2010 have not been revised.

2. Others(1) Changes in Significant Consolidated Subsidiaries
No(2) Application of Accounting Methods for Quarterly Consolidated Financial Statements That Are Simplified
or ExtraordinaryNo(3) Outline of Changes in Significant Accounting Policies, Procedures and Presentation:(i) From the first quarter of the fiscal year ending March 31, 2011, Nagase applies the “Accounting Standard for
Equity Method of Accounting for Investments” (ASBJ Statement No. 16, March 10, 2008) and the “PracticalSolution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method”(ASBJ PITF No. 24, March 10, 2008).
This change has had no impact on the consolidated operating income and ordinary income.
(ii) From the first quarter of the fiscal year ending March 31, 2011, Nagase applies the “Accounting Standard for
Asset Retirement Obligation” (ASBJ Statement No. 18, March 31, 2008) and the “Guidance on Accounting Standard
for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008).
This change has had no impact on the consolidated operating income and ordinary income.

－4－