Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2010
January 29, 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): February 12, 2010
Start of distribution of dividends (scheduled):—(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, 2010 (April 1, 2009 toDecember 31, 2009)(1) Consolidated Operating Results (Percentages represent changes compared with the previous fiscal year.)Net sales
Operating income
Ordinary income
Net income
Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

440,545(23.4)

9,448(21.1)

10,447(21.8)

5,680

(5.6)

574,971–

11,968–13,361

–

6,018

–

Nine months ended Dec. 31, 2009
Nine months ended Dec. 31, 2008

Earningspershare

Earnings pershare (diluted)

Yen

Yen

44.18

–46.81

46.81

Nine months ended Dec. 31, 2009
Nine months ended Dec. 31, 2008

(2) Consolidated Financial Position
Total assets

Net assets

Millions of yen

Net worth ratio

Net assets per share%

Millions of yen

Yen

As of December 31, 2009
371,218
199,72151.9
1,497.94
As of March 31, 2009
340,968
191,93154.1
1,435.88(Reference) Equity capital: As of December 31, 2009: ¥192,526 million (As of March 31, 2009: ¥184,599 million)2.

Dividends(Record date)

1Q

InterimYen

Dividends per share
3Q

Fiscal Year-End

Yen

Yen

Yen——

8.00

16.00

7.00

14.00

Yen

Fiscal 2008
—8.00
Fiscal 2009—
7.00
Fiscal 2010 (est.)
Note: Revisions to projected dividends during the nine months ended December 31, 2009: No

3.

AnnualProjected Consolidated Results for the Fiscal Year Ending March 31, 2010
(April 1, 2009 to March 31, 2010)(Percentages represent changes compared with the previous fiscal year, as applicable)

Net sales
Full year

Operating income

Ordinary income

Earningspershare

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

575,000(19.6)

10,000(20.1)

11,000(15.7)

6,000%

(3.3)

Yen

46.67

Note: Revisions to projected consolidated results during the nine months ended December 31, 2009: No

4. Other(1) Changes in major subsidiaries during the period (changes in specified subsidiaries due to changes in thescope of consolidation): None(2)

Use of simplified accounting methods or special accounting methods for preparation of quarterly financial
statements: No－1－(3)Changes in accounting principles, procedures, presentation methods, etc., in connection with thepreparation of consolidated financial statements(Recorded under “Changes in important items considered fundamental to the preparation of the quarterly
consolidated financial statements.”)i.
Changes in accordance with revisions to accounting and other standards: Noii.
Changes in items other than (i) above: Yes
See “4. Other” of “Qualitative Information and Financial Statements” on page 4.

(4)Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasurystock)
Nine months ended Dec. 31, 2009:
138,408,285 sharesYear ended March 31, 2009:
138,408,285 sharesii.
Number of treasury stock as of the fiscal period end
Nine months ended Dec. 31, 2009:
9,880,699 sharesYear ended March 31, 2009:
9,846,589 sharesiii.
Average number of shares during the period:
Nine months ended Dec. 31, 2009:
128,554,478 shares
Nine months ended Dec. 31, 2008:
128,574,556 shares

Notes: Cautionary Remark Regarding Forward-Looking Statements
Statements made in this document with respect to projected results and other statements that are not of historical fact areforward-looking statements based on the assumptions, projections and plans of the Company as of the date of this report.
Readers are advised that actual results may differ materially from projections due to risks and uncertainties arising from avariety of factors, including shifts in global economic and competitive conditions, foreign currency exchange rates andinterest rates.

－2－

1. Business Performance(1) Analysis of Business Performancea. General Summary of Results
During the nine months ended December 31, 2009, despite some industries showing signs of recovery due to thepromotion of inventory adjustments and the implementation of a series of economic-stimulus measures, economicconditions in Japan remained severe. This is primarily attributable to sluggish corporate earnings, subdued capital
investment and worsening employment conditions.
Against this backdrop, domestic sales for the nine-month period fell 16.9 percent compared with the corresponding
period of the previous fiscal year to ¥265.52 billion, and overseas sales decreased 31.4 percent to ¥175.01 billion, fortotal net sales of ¥440.54 billion, a 23.4 percent decrease.
On the earnings front, operating income dropped 21.1 percent year on year to ¥9.44 billion, and ordinary income fell
21.8 percent to ¥10.44 billion due to a substantial drop in sales, despite the Company’s efforts to reduce selling,general and administrative expenses. As a result, net income for the third quarter dipped 5.6 percent to ¥5.68 billion.
This was attributable to a year-on-year loss on valuation of investment securities of ¥1.91 billion recorded as anextraordinary loss.

b. Segment SummaryThe classification of business segments has been somewhat changed from the first quarter of the fiscal year underreview. Year-on-year figures have been calculated based on a reclassification of the previous business segments into
the new categories.
[Chemicals] Sales: ¥173.45 billion, a 20.0 percent decrease from the same period of the previous fiscal year
Despite an increase in domestic sales of the Nagase Group in connection with such items as LCDs, this segment wasimpacted by the ongoing decrease in demand throughout the overall chemicals industry that affected Nagase’s
chemical businesses across the board. Consequently, sales drops were recorded by the chemicals business, whichhandles coating materials, urethane materials, plastic raw materials and additives; the colors and imaging business,
which handles dyestuffs, pigments and other products related to color; and the specialty chemical business, whichhandles a wide range of organic synthesis materials such as surfactants, industrial oil solutions, silicone andfluorochemicals. Overall sales also fell as a result of weak overseas sales in Northeast Asia, Southeast Asia, North
America and Europe.
[Plastics] Sales: ¥138.94 billion, a 33.0 percent decrease from the same period of the previous fiscal year
During the period under review, despite an upswing in domestic sales of materials for precision instruments andelectronics as well as indications that demand for flat-screen televisions and automotive applications was beginning torecover in light of exports made to emerging nations, particularly China, sales of building and packaging
materials-related products remained sluggish. Overseas sales failed to reach average levels for the corresponding
period of the previous fiscal year in spite of a recovery trend in demand—which focused on automotiveproducts—while sales in all regions fell. As a result, overall sales in this segment plunged.
[Electronics] Sales: ¥85.74 billion, an 18.9 percent decrease from the same period of the previous fiscal year
Sales of chemicals for manufacturing LCDs increased slightly due to the launching of new products, while sales ofmaterials for LCD display films remained nearly unchanged compared to the corresponding period of the previous
fiscal year. At the same time, despite a recovery in sales of both precision abrasive materials for hard disks and siliconwafer applications, year-on-year sales fell. Sales stemming from the release of newly formulated epoxy resin products
for such devices as mobile phones were firm; however, overseas sales remained weak in all regions. Accordingly,
overall sales dropped, reflecting sluggish sales of products for the automobile and light electrical equipment markets.
[Life Sciences] Sales: ¥41.53 billion, a 5.0 percent decrease from the same period of the previous fiscal year
In the Life Sciences segment, sales of pharmaceutical raw materials and intermediates as well as agricultural raw
materials in the fine chemicals business and the beauty care products business, which handles cosmetics and healthfoods, dipped. Although strong sales were also reported by domestic manufacturers, overall sales in this segment
declined slightly.
[Other] Sales: ¥0.87 billion, a 27.3 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(1) Assets, Liabilities and Net Assets
Total assets increased ¥30.24 billion to ¥371.21 billion during the period under review, despite a decrease ininventories. This was mainly attributable to increased current prices of investment account securities stemming fromrises in both notes and accounts receivable and share prices as well as a rise in cash and time deposits due toaccumulated current assets on hand.
Total liabilities increased ¥22.45 billion from the end of the previous fiscal year to ¥171.49 billion due to such factors
as a rise in accounts payable and deferred tax liability. This occurred despite a decrease in short-term loans.
Net assets rose ¥7.79 billion to ¥199.72 billion due to the increase in net unrealized holding gain on securities.
As a result, the net worth ratio fell 2.2 percentage points from 54.1 percent to 51.9 percent.

(2) Cash FlowsNet cash provided by operating activities was ¥25.25 billion, due to decreases in working capital as well as net
income before income taxes and minority interests.
Net cash used in investing activities was ¥8.67 billion. This reflected such factors as purchases of property, plant andequipment and investment securities.
Net cash used in financing activities was ¥8.69 billion due to such factors as a reduction in short-term loans anddividend payments.
As a result, the balance of cash and cash equivalents as of December 31, 2009 was ¥43.64 billion, up ¥7.5 billion
from the end of the previous fiscal year.

3. Qualitative Information on Forecasted Consolidated Results
The projected full-year consolidated results for fiscal 2009 have not been revised from the projections announced onOctober 30, 2009.

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
No(3) Changes in Consolidated Accounting Rules, Procedures, Presentation Method, etc., for the Quarterly
Consolidated Financial Statements
a. The Company has been applying special quarterly accounting methods to determine income tax payments,
including calculations for some consolidated subsidiaries that use the estimated annual effective tax rate based on
the normal effective statutory tax rate. However, such accounting methods have been replaced from the period
under review with the basic accounting procedures used for the full year in order to ensure a more appropriate
calculation of quarterly tax expenditures. The impact of such changes on the Company’s financial performance isminor.
b. The classification of business segments has been partially changed from the first quarter of the fiscal year
under review.

－4－