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

January 31, 2011
These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

NAGASE & CO., LTD.
Stock exchange listing: Tokyo, Osaka (First Sections)
Code number: 8012
(http://www.nagase.co.jp)
Representative:
Hiroshi Nagase, Representative Director and President
Contact:
Masanori Furukawa, Manager, Corporate Accounting Division
Filing of Quarterly Report (scheduled): February 10, 2011
Start of distribution of dividends (scheduled):—
Supplementary documents or quarterly financial results: No
Quarterly investors’ meeting: No(Note: Amounts have been rounded down to the nearest million yen.)

1． Consolidated Results for the Third Quarter of the Fiscal Year Ending March 31, 2011
(April 1, 2010 to December 31, 2010)(1) Consolidated Operating Results (Percentages represent changes compared with same period of the previous fiscal year.)Net sales
For the third quarter
ended
December 31, 2010
December 31, 2009

Operating income

Millions of yen%499,316
440,545

For the third quarterended
December 31, 2010
December 31, 2009

Millions of yen

13.3(23.4)

Ordinary income%

15,548
9,448

Millions of yen

64.6(21.1)

Earnings
per share

Earnings per share(diluted)

Yen

Yen

Net income%

17,01910,447

Millions of yen

62.9(21.8)%

10,502
5,680

84.9
(5.6)

——

81.70
44.18

(2) Consolidated Financial Position
Total assets

Net assets

Net worth ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

December 31, 2010

387,713207,868

March 31, 2010

368,088202,753(Reference) Equity capital: As of December 31, 2010: ¥200,220 million

51.6

1,557.95

53.1

1,519.61

As of March 31, 2010: ¥195,344 million

2. Dividends
Dividends per share(Record date)

1Q

Interim

For the year ending

Yen

3Q

Yen

Yen

March 31, 2010

—

7.00

—

March 31, 2011
March 31, 2011
(estimate)

—

9.00

—

Fiscal Year-End

Annual

Yen

Yen
9.00

16.00

9.00

18.00

Note: Revisions to projected dividends during the three months ended December 31, 2010: No

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 previous fiscal year)
Net sales
Millions of yen

Fiscal 2010
(Full fiscal year)

655,000

Operating income%
8.5

Millions of yen
18,000%37.1

Ordinary income
Millions of yen
19,600Net income% Millions of yen
33.2

12,000Note: Revisions to projected consolidated results during the three months ended December 31, 2010: No－1－%
59.2

Earnings
per shareYen
93.35

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): None
New: — (Company name:)

Excluded: — (Company name:)(2) Application of simplified accounting methods or special accounting methods to the preparation of quarterly
financial statements: No(3) Changes in accounting principles, procedures and presentation methods in connection with the preparationof consolidated 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 December 31, 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 December 31, 2010:
9,892,916 shares
As of March 31, 2010:
9,859,357 sharesiii. Average number of shares during the period:
Nine months ended December 31, 2010:
128,541,498 shares
Nine months ended December 31, 2009:
128,554,478 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 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“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 remained steady owing to the positive effect of thegovernment’s economic policies and active demand in Asia, primarily in China. This occurred despite the significant
impact of the strong yen.
Reflecting these circumstances, domestic sales for the third quarter rose 11.2 percent compared with thecorresponding period of the previous fiscal year to ¥295.18 billion and overseas sales increased 16.6 percent to¥204.12 billion. Total net sales for the period under review were ¥499.31 billion, up 13.3 percent year on year.
On the earnings front, operating income jumped 64.6 percent to ¥15.54 billion and ordinary income increased 62.9
percent to ¥17.01 billion due to the increase in net sales. As a result, net income for the third quarter of the fiscal yearunder review surged 84.9 percent year on year to ¥10.50 billion.
b. Segment Summary[Chemicals]

Sales: ¥190.02 billion, a 9.6 percent increase from the same period of the previous fiscal year

Such factors as a recovery in demand in the chemicals industry overall affected Nagase’s chemical businesses acrossthe board. Reflecting this, sales improvements were recorded by the performance chemicals business, which handles
coating materials, urethane materials, plastic raw materials and additives; the colors and imaging business, whichhandles dyestuffs, pigments, digital print processing materials, functional dyes and other products related to color; andthe speciality chemicals business, which handles a wide range of materials such as surfactants, industrial oil solutions,organic synthesis materials and sealants, which have applications related to fluorochemicals and are used by thesemiconductor industry. Overseas, sales in other regions increased despite decreased printing-related sales in South
China. Consequently, overall sales in this segment rose.
[Plastics]

Sales: ¥167.26 billion, a 20.4 percent increase from the same period of the previous fiscal year

During the period under review, although domestic sales of functional film and sheet molding-related products fell,sales of materials for office automation equipment, consumer electronics and automotives grew substantially on theback of strong exports. Overseas sales of materials for office automation equipment, consumer electronics andautomotives increased significantly in all regions. As a result, overall sales in this segment noticeably improved.
[Electronics]

Sales: ¥103.56 billion, a 20.8 percent increase from the same period of the previous fiscal
year

Sales of display-related products, including LCD films and touch-panel components, grew substantially owing to anincrease in new commodity items. In addition, sales of precision abrasive materials for the hard disk andsemiconductor industries improved as did sales of chemicals used in manufacturing LCDs and semiconductors,
reflecting favorable demand. The epoxy business also grew substantially, owing to a recovery in applications related
to heavy electric machinery and strong demand for such mobile phones as smartphones. Despite sales in Southeast
Asia remaining on par with the previous year, overseas sales in all other regions showed considerable growth.
Consequently, overall sales in this segment increased drastically.
[Life Sciences]

Sales: ¥37.75 billion, a 9.1 percent decrease from the same period of the previous fiscal year

In the Life Sciences segment, sales of enzymes and fermentation products in the fine chemicals business remained
unchanged due to a delay in the results of related development projects. Sales in the pharmaceutical industry—whichmainly handles pharmaceutical intermediates—and living commodities—which include food additives—declined.
Sales in the Beauty Care products business, which handles cosmetics and health foods, remained the same as last year,
while overall sales decreased.
[Other]Sales: ¥0.70 billion, a 19.8 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 increased ¥19.62 billion to ¥387.71 billion during the period under review, in spite of such factors as adecrease in property, plant and equipment stemming mainly from the impact of depreciation and amortization, and afall in investment securities’ market value following a drop in share prices. This improvement was primarily
attributable to increases in notes and accounts receivable and inventories due to a growth of sales.
Total liabilities amounted to ¥179.84 billion, up ¥14.5 billion from the previous fiscal year-end mainly due toincreases in notes and accounts payable and short-term loans in the wake of a rise in purchases. This result occurred
despite such factors as a decrease in deferred tax liabilities.
Net assets rose ¥5.11 billion from the previous fiscal year-end to ¥207.86 billion primarily because of a rise inretained earnings. This increase took place in spite of such factors as a downturn of foreign currency translation
adjustments caused by the ongoing strength of the yen.
As a result, the net worth ratio fell 1.5 percentage points to 51.6 percent compared with the previous fiscal year-end’s
53.1 percent.
Cash FlowsNet cash provided by operating activities was ¥4.45 billion. This was mainly attributable to ¥16.98 billion in income
before income taxes and minority interests, which offset an increase in working capital due to a rise in notes andaccounts receivable and inventories stemming from sales expansion.
Net cash used in investing activities totaled ¥6.79 billion, reflecting such factors as purchases of property, plant andequipment.
Net cash provided by financing activities amounted to ¥2.24 billion due to an increase in short-term loans. Thisoccurred in spite of such factors as the payment of dividends.
Including a ¥0.96 billion decrease in exchange rate changes for cash and cash equivalents in the wake of currency rate
fluctuations, the balance of cash and cash equivalents as of December 31, 2010 was ¥41.98 billion, a decrease of¥0.82 billion from the end of the previous fiscal year.
(3) Qualitative Information on Projected Consolidated Results
The projected full-year consolidated results for fiscal 2011 announced on October 29, 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 has applied 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 consolidated operating income and ordinary income.
(ii) From the first quarter of the fiscal year ending March 31, 2011, Nagase has applied 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 consolidated operating income and ordinary income.
(iii) From the first quarter of the fiscal year ending March 31, 2011, Nagase has applied the “Accounting Standard forBusiness Combinations” (ASBJ Statement No. 21, December 26, 2008), “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22, December 26, 2008), “Partial Amendments to Accounting Standard－4－

for Research and Development Costs” (ASBJ Statement No. 23, December 26, 2008), “Revised Accounting Standardfor Business Divestitures” (ASBJ Statement No. 7, December 26, 2008), “Revised Accounting Standard for Equity
Method of Accounting for Investments” (ASBJ Statement No. 16, released December 26, 2008) and “RevisedGuidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures”(ASBJ Guidance No. 10, December 26, 2008).

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