BUSINESS REPORT2015
December 1, 2014 to November 30, 2015

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude
to our shareholders for your continued support
and patronage.
I am pleased to report that the NACHI-FUJIKOSHI
Group’s business overview for the fiscal year
ended November 2015 (from December 1,2014 to November 30, 2015).

Business Environment
In terms of the business environment surrounding the NACHI-FUJIKOSHI Group during thisperiod under review, signs of a weak economy
were observed in some regions, including
uncertainty over the Japanese economy andthe slowdown in economic growth in emerging
economies such as China and the ASEAN
countries. Nonetheless, economic recovery
has continued at a moderate pace, supportedby the upswing in the economies of developed countries led by the United States,
coupled with a steady increase in automotive
production overseas.

Business Progress and Results
Given this environment, the NACHI-FUJIKOSHI
Group has been making full use of it sstrength as a comprehensive machinery
manufacturer encompassing cutting tools,
machine tools, robots, bearings, hydraulicequipment, and special steel businesses topromote initiatives to find new customers,
mainly new users in overseas countries, todeploy new products, and to expand its existing product range. As a result, sales in thecurrent consolidated fiscal year reached
218.5 billion yen, up 0.1% over the previousperiod. Of this, sales in the Japanese market

were 115.9 billion yen, down 2.2% over theprevious period, while overseas sales totaled
102.6 billion yen, up 2.9%.
In terms of profitability, with the success ofthe total cost reduction ef for t, such as
improvement of operation capacity and productivity, operating income totaled 18.9
billion yen, up 2.0% over the same period of
the previous fiscal year, ordinary income 17.3
billion, down 6.0%, and net income 11.5
billion yen, up 16.7%.

Dividends
The NACHI-FUJIKOSHI Group considers redistribution of profits to our shareholders as one of
the most important tasks, and our basic policy
is to provide stable dividends based on thecomprehensive consideration on consolidated
operating results and dividend payout ratio. Theinternal reserves will be allocated to the futurebusiness development and strengthening offinancial structure.
With regard to the fiscal year-end dividend,
based on the above policy and taking into
account the operating results of this fiscal
year, it has been decided that 10 yen in dividends would be paid per share, an increaseof 2 yen per share over the previous period,
to show our appreciation to the support fromour shareholders.

Future Initiatives
In terms of future outlook, although there aremixed prospects for economic developmentin emerging countries and a concern that theeconomy in Japan is slowing down, it isexpected that the demand in the automotive,

industrial machinery and aircraft sectors will
increase in the mid to long-term period in
advanced countries, mainly the North Americanand emerging markets including China, and that
this will contribute to steady growth in general.
The Group will place our focus on the volumezones inside and outside Japan to enhancesales/service framework and expand our merchandise and product range, while strengthening our procurement framework, and reducing
costs by innovation on the production line.
The company will work to improve operating
results and secure a stable profit structure.
I would like to express my sincerest appreciation to all of our shareholders for theircontinued support and understanding.

President andRepresentative Director

February 2016

RESULTS OF OPERATIONS (Consolidated)
Composition of Sales
Business Segment

MarketSpecial Steels/
Industrial Furnaces
and Others Cutting Tools
15%
8%
HydraulicEquipment
22%¥218.5
BillionOverseas

Energy/Infrastructure
21%

Machine Tools
9%
Robots10%

Machinery/
Retail28%

Bearings
36%

America
31%

Automotive
51%¥218.5
BillionAsia, Oceania,and others
58%¥102.6
BillionEurope11%

Trend in Business Results
Net Sales (¥ billions)
218.2

175.6

Operating Income (¥ billions)

Net Income (¥ billions)
11.5

218.5

18.9
18.5

(207.4)9.9(9.5)(18.0)
12.3

FY

2013

2014

2015

FY

2013

6.7

2014

2015

FY

2013

2014

2015

*The figure in parenthesis in 2014 shows the actual record reflecting the influence of the change of the fiscal term inour overseas subsidiaries (for two months from October to November 2013).

TOPICS
Promoting Overseas Sales Expansion
We will further enhance our local sales function and promote local production for local consumption, throughthe improvement and expansion of sales channels (bases) in the overseas market, the establishment of thenew technical center as well as the recruitment of local people for sales.

Operations in the North American market
Increasing local productionof bearings in Mexico
A new plant will star t operation inOctober 2016 in Mexico, where theautomobile industries have been integrated, to promote local production forlocal consumption.

Boosting production capacity forcutting tools and bearings
Further Cultivationof the Detroit 3(Detroit)

Production hub foraircraft and EMS

In order to aim for expansion in theautomotive and aircraft sectors, we will
strengthen production capacity forcut ting tools and bearings to takeadvantage of increasing demand.

(San Jose)(Atlanta)

Region with high demand forautomobiles, power generationand construction machinery
NACHI TECHNOLOGY MEXICO S.A. DE C.V.

Roller bearings forconstant velocity joints

Bearings fortransmissions

NACHI TOOL AMERICA INC.
NACHI TECHNOLOGY INC.
Large-diameter helical broaches

Technical Center (New)Sales Base (New)Sales Base (Existing)
Production BaseCarbide drills

Bearings for automobile
air conditioners

Expansion of Merchandise

EXS1 Series

Expansion of Spherical Roller Bearing
Product Line-up

Expansion of
Small Robot Market

To fulfill the high performance needs within theindustrial machinery sector, including speed
reducers and injection molding machines, we haveintroduced the world’s highest load bearing to ourproduct line-up.

With the aim of entering new businessfields such as food, pharmaceutical,
and cosmetics, we added the SCARA
robot to our small robot series to meetthe growing need for automation.

EZ03

Operations in ChinaCentral production base in China

Establishment ofNew Technical Centers
To t ake advant age of the incre asing
demand for robots, we have opened newtechnical centers along the coast of China,
in Shanghai, Guangzhou and Qingdao.
Various automated lines, from processing
to assembly, are being shown in order toappeal to customers in a pragmatic way,while striving to provide greater customer
satisfaction and increase sales orders.

NACHI (JIANGSU) INDUSTRIES CO., LTD.

Hydraulic equipment
for construction
machinery

Automotivehydraulics

Small robot
MZ04(Qingdao)(Shanghai)

Regions with high demand for automobiles,
and electric and electronic devices
Technical Center (New)Sales Base (New)Sales Base (Existing)
Production Base(Wuhan)Diagram of the new technical center(Guangzhou)

Fully integrated bearing production, from forging and turning, scheduled to start in Thailand
We will open a new forging and turning plant to provide pre-processes
for manufacturing in Thailand to develop an integrated local production system, as well as further strengthen cost competitiveness.
In addition, we will reduce costs globally by supplying forged andturned parts to our overseas plants for bearing manufacturing.
With an eye to a future increase in the number of product items,
this also leaves sufficient room for expansion.
NACHI FORGING TECHNOLOGY (THAILAND) CO.,LTD. (To be completed in September 2016)

4

FINANCIAL STATEMENTS
Consolidated Balance SheetsItem(¥ millions)(¥ millions)

2015

2014

Item

(as of November 30, 2015) (as of November 30, 2014)ASSETS:

2015

2014

(as of November 30, 2015)(as of November 30, 2014)

LIABILITIES:Current assets

126,695

127,328

Cash and cash equivalents

22,11623,932

Notes and accounts receivable48,584

49,906Inventories

45,87944,345

10,114

Other

9,144

Current liabilities

98,407103,331

Notes and accounts payable

41,98847,483

Bonds and short-term bank loans

37,82732,765

Other

18,591

23,082Long-term liabilities

60,39854,779Long-term debt

35,026

31,392

Allowance for retirement benefits

11,006

11,062Other

14,365

12,324

Total liabilities

158,805

158,111

Fixed assets

141,416

128,351

Property, plant and equipment

103,606

94,566

Buildings and structures

29,01729,422

Shareholders’ equity

93,911

83,188

Machinery and equipment

54,25546,190Common stock

16,074

16,074

Additional paid-in capital

11,65011,561Retained earnings

67,11856,970Treasury stock△ 932△ 1,418

Revaluations and translation adjustments

8,641

8,357

Minority interests

6,752

6,023

Total net assets

109,306

97,569Total liabilities and net assets

268,112

255,680

Land

8,152

7,845

Other

12,180

11,109Intangible fixed assets

1,051

932

Investments and advances

36,75832,852

Total assets

268,112

255,680

Consolidated Statements of Income(¥ millions)

NET ASSETS:

Consolidated Statements of Cash Flows(¥ millions)

2015

2014

Net sales

218,535

218,225

Cash flows from operating activities

13,855

18,699Operating income

18,945

18,574

Cash flows from investing activities△ 22,017△ 19,159

Ordinary income

17,316

18,419Cash flows from financing activities
Net decrease in cash
and cash equivalents
Cash and cash equivalents
at beginning of the year
Cash and cash equivalents
at end of the year

6,777

4,416

△ 1,982

5,240

23,46918,22921,48723,469Item(Year ended November 30, 2015) (Year ended November 30, 2014)

Extraordinary income

1628

Extraordinary lossesIncome before income taxes
and minority interests
Net income

464

1,748

16,868

16,69911,593

9,934

Item2015

2014(Year ended November 30, 2015) (Year ended November 30, 2014)

SHAREHOLDER INFORMATION (As of November 30, 2015)
Number of Shares Issued: 249,193,436
24,285
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (645 thousand shares).

Breakdown of Shareholders

Number of shares Shareholding ratio
held (thousand)(%)

Shareholders

NACHI WANEI Stockholding
Employees’ Stock Ownership Plan
Toyota Motor Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Hokuriku Bank, Ltd.

19,392
13,186
13,182
11,8888,659

Stock
Ownership
Associations
39,454 thousand(15.9%)

ForeignInvestors
34,105 thousand(13.7%)

7.80
5.31
5.30
4.78
3.48

Individuals
45,876 thousand(18.5%)
Securities
Companies
3,384 thousand(1.3%)

FinancialInstitutions
80,306 thousand(32.3%)
Other JapaneseCorporations
45,421 thousand(18.3%)DIRECTORS AND AUDITORS (As of February 24, 2016)
President andRepresentative Director

Hiroo Honma

Managing Director

Kenji Susukida
Managing Director

Isao HoriManaging Director

Hidenori Hayashi
Managing Director

Masayuki Kobayashi
Director

Kazuo Tsukahara*

Director

Toru Inoue
Director

Tetsu Furusawa
Director

Tadataka Hori

Director

Shinichi Urata
Director

Yutaka Tsukamoto
Director

Masatoshi Akagawa

DirectorStanding Corporate Auditor

Akira Kunisaki

Masakazu Yamazaki*

Standing Corporate Auditor

Hiroshi Yamada

Corporate Auditor

Eiichi Fukushima*

Standing Corporate Auditor

Masashi Hori

*Outside director or outside
corporate auditor.

CORPORATE OFFICERS (As of February 24, 2016)
Hideaki Hara
Shigeru Togashi
Corporate Officer Yusaburou Nomura

Satoshi Hamamoto
Tetsuo Koshihama
Corporate Officer Tsutomu Kurosawa

Noboru Miura
Yukihiro Shoji
Corporate Officer Ryohei Nobetani

Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Noritsugu Sasaki

CORPORATE INFORMATION (As of November 30, 2015)
Foundation:
Capital:Number of Employees:
Major Products:
Machinery and tools business
Components business
Other business
Major Domestic Offices and Plants:
Toyama Head Office
Tokyo Head Office

December 21, 1928
¥16 billion
2,846 (Group employees 6,557)
Cutting Tools, Forming Tools, Cutting Saws, Machine Tools, Machining Systems, Robots, Robot Systems
Bearings, Hydraulic Equipment, Automotive Hydraulics, Seismic Isolation Systems
Special Steels, Coating, Industrial Furnaces
1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan
Shiodome Sumitomo Bldg. 17F, 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-0021, Japan

Tel:+81-76-423-5111+81-3-5568-5111

Eastern Japan Main BranchCentral Japan Main BranchWestern Japan Main Branch

Shiodome Sumitomo Bldg. 17F, 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-0021, JapanNachi Nagoya Bldg. 2-120-3, Takayashiro, Meitou-ku, Nagoya 465-0095, JapanSumitomo Nakanoshima Bldg. 5F, 3-2-18, Nakanoshima, Kita-ku, Osaka 530-0005, JapanToyama Plant

1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan[Cutting Tools / Machine Tools / Bearings / Robots]
3-1-1, Yoneda-machi, Toyama 931-8511, Japan [Special Steels] / 3-2-1, Nakada, Toyama 931-8453, Japan [Hydraulic Equipment]
176, Ogake, Namerikawa 936-0802, Japan [Hydraulic Equipment / Automotive Hydraulics / Coating / Industrial Furnaces]
NACHI AMERICA INC. (U.S.A.) NACHI EUROPE GmbH (Germany) NACHI (SHANGHAI) CO., LTD. (China)
NACHI (JIANGSU) INDUSTRIES CO., LTD. (China) NACHI SINGAPORE PTE. LTD. (Singapore)
NACHI TECHNOLOGY（THAILAND）
CO., LTD.

Higashi-Toyama Plant
Namerikawa Plant
Major Overseas Offices and Plants:

INVESTOR INFORMATION
Securities Code:Fiscal Year:
Ordinary General Meetingof Shareholders:Record Date:

6474
From Dec. 1 of each year to Nov. 30 of
the following year
February

Voting rights at General
Meeting of Shareholders November 30
Year-end dividend
November 30
Interim dividend
May 311,000 shares
Unit:
Shareholders’ Register Custodian/ 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, 100-8233, Japan
Administrator for Special Accounts: Sumitomo Mitsui Trust Bank, Limited
2-8-4, Izumi, Suginami-ku, Tokyo 168-0063, Japan
Administrative Office/
Sumitomo Mitsui Trust Bank, Limited
Mailing Address:
Stock Transfer Agency Department
Toll-free: 0120-782-031 (Toll-free in Japan)
Inquiries:
http://www.nachi-fujikoshi.co.jp/eng/
URL:

Notice regarding the Transfer of Dividends to the Shareholder’s AccountWe recommend transfer to the shareholder’s account as a safe, foolproof, andconvenient way to receive dividends.
Please choose from the following three methods for receiving dividends throughtransfer to the shareholder’s account.
Allocation by Proportion of Shares: Receiving dividends through accounts that theshareholder has with securities firms. (A shareholder who does not have anaccount at a securities firm may not use this method.)
Registration of a Single Account for Receiving Dividends: Receiving dividends for
all categories of stock that the shareholder owns through a single account thatthe shareholder has with banks, etc. (An account with the Japan Post Bank may
not be designated for this purpose.)
Designation by Specific Stock: Assigning an account that the shareholder has withbanks, etc. for each category of stock and receiving dividends through suchaccounts.

Procedures regarding Shares
1. Notification regarding Designation of the Method for Receiving Dividends; thePurchase of Additional Shares or Buyback of Holdings Less Than the Minimum
Trading Unit; Change of Address, Name, etc.; and Request for Stock Transfers
between Accounts
Please notify the securities company with which you have your account. For thoseshareholders who do not have an account with a securities company and who have
set up a special account instead, please notify Sumitomo Mitsui Trust Bank,
Limited which is the account administrator for special accounts.

2. Questions regarding Payments of Accrued Dividends and Other General Administrative Matters regarding Shares
Please contact Sumitomo Mitsui Trust Bank, Limited which administers theshareholders registry.

The Cover Photograph
The cover image is a bearing incorporated into
an industrial machine.
The world-class high load capacityand excellent impact performance enables
it to withstand harsh environments
and support a broad range of industries.