BUSINESS REPORT
2010
December 1, 2009 to November 30, 2010

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
I trust that all is well for our valued shareholders.
I am pleased to report the results for the
NACHI-FUJIKOSHI Group for the fiscal year
ended November 30, 2010 (from December 1, 2009 to November 30, 2010).

Business Environment

and 6.4 billion yen in ordinary income.
Extraordinary gains and losses such as
gains on sales of investment securities andlosses on sales of fixed assets, as well as
corporate tax and other such items, brought
net income for the fiscal year to 5.5 billion
yen.

The business environment surrounding the
NACHI-FUJIKOSHI Group during the fiscal
year showed a gradual recovery with therobust economies of emerging nations as
the backdrop, as evidenced by the turnaround in the auto industry and the increasingly clear signs of the recovery in industrial
machinery and consumer markets.

Cash Dividends

Business Progress and Results

Future Initiatives

Given this environment, the NACHIFUJIKOSHI Group moved forward withinitiatives to cultivate new markets and revitalize existing ones by playing to thestrength generated by the Group’ s positionin the machining, robotics, functional parts,and material businesses.
As a result, sales for the fiscal year
totaled 134.8 billion yen, up 25.3% over theprevious fiscal year. Of this, sales in theJapan market were 84.1 billion yen, up
20.0% over the previous fiscal year, while
overseas sales totaled 50.6 billion yen, up
35.2%.
In terms of profitability, although affectedby such factors as deteriorating export margins due to the appreciation of the yen anddeclining sales prices, improved capacity
utilization as the result of the recovery insales and manufacturing as well as efforts
to curb overall costs including a fundamental review of cost structures enabled us tosecure 8.2 billion yen in operating profits

As for the outlook moving forward, we
believe that the global market will be driven
by continued high economic growth in China
and other emerging nations. However,concerns about declining sales prices due toincreasing competition and rising costs as
the result of the appreciation of the yen,rising oil and other natural resource prices
lead to expectations of an uncertain future.
In the future, the NACHI-FUJIKOSHI
Group will endeavor to cultivate emerging
markets as well as the energy and infrastructure segments, where long-term growth isanticipated. The company will also move
forward with thoroughgoing improvement
and cost reduction focused on manufacturing, sales, and research and development.
By these means, the company will develop astable profit structure and work to improvebusiness results.
I would like to express my sincerest
appreciation to all of our shareholders fortheir continued support and understanding.

1

With regard to the fiscal year’s-end dividend,since the NACHI-FUJIKOSHI Group wasable to record more profit than initiallyforecast, the group is expressing its appreciation for the support of its shareholders
and paying 4 yen in dividends per share, up
2.5 yen from the previous fiscal year.

President andRepresentative Director

February 2011

RESULTS OF OPERATIONS (Consolidated)
Sales by Market

Sales by Business Segment
Special Steels/
Industrial Furnaces
and Others Cutting Tools
16%
8%
Hydraulic
Machine Tools/
Equipment
Precision Machinery
18%
9%¥134.8
RobotsBillion5%

Overseas Sales

Energy/Infrastructure
15%

Machinery/
Retail34%

Automotive
51%¥134.8Billion

Asia, Oceania,
andthe Middle East
60%

America28%¥50.6
BillionEurope12%

Bearings
44%

Net Sales (¥ billions)Operating Income (¥ billions)

204.8

Overseas Sales (¥ billions)
65.5

15.5

50.6
134.8
107.5

37.4

8.2

(3.2)
2008

2009

2010

2008

2009

2010

2008

2009

2010

2

TOPICS
Expanding into Emerging Markets
NACHI-FUJIKOSHI places its main emphasis on emerging nations—China, India and other nations in
ASEAN, the Middle East, South America, and elsewhere. NACHI-FUJIKOSHI is expanding its presence
there by expanding its sales and service coverage and enhancing production capacity.
Nachi (Shanghai)
Precision Tools Co., Ltd.
(Shanghai, China)
We enhanced our local
production structure forhydraulic equipment tocapitalize on growing
demand for construction machinery andmachine tools.

Nachi (Shanghai) Co., Ltd. (Shanghai, China)
Nachi (Shanghai) Precision Tools Co., Ltd. (Shanghai, China)
In order to meet demand from Japanese and local manufacturers, ourGroup undertook a massive expansion of its sales force and reinforced
its technical and business development capacities. Our Group also
expanded its bearing manufacturing capacity in Shanghai and
Dongguan in order to keep pace with the increase in demand forautomobiles.

Construction Machinery
Demand for small construction machinery grows as theinfrastructure development
continues to move forward.
Our Group is responding to theincrease in demand from local
manufacturers for traction
motors and rotation motors.

Industrial Machinery
Robot Business Center (Shanghai, China)
In March 2010, our Group established the Robot
Business Center (Shanghai). The Center will help
introduce and expand the use of robots as part of themodernization and automation of production lines in
the Chinese market.

3

As the Chinese machine
tools market shifts up the
performance scale, ourGroup is working to expand
its sales of energy-efficienthydraulic units there.

New Product Releases
NACHI-FUJIKOSHI is developing new products and expanding its product lines in order to capitalize
on opportunities in the energy and infrastructure sectors.
Developing Robot Systems that Can
Adapt to Multiple Manufacturing Processes.

Hyper Dual SP and GP Hobs
Flex-handThis product performs well in a broad
range of areas including industrial
machinery, providing flexible responses
to changes in work requirements.

High Speed Seam Welding Robots
Our high speed seam welding
robot has achieved high speed
welding of up to 20 meters per
second. Our robot can meet theneeds of a wide variety of applications in industrial machinery ingeneral as well as welding automobile body parts.

Strengthening the Product Development Structure
For the development of new products, our Group is reviewing
the organizational and management structure of its researchand development activities in order to establish a process that
integrates the identification of new development opportunities, the development of basic technology and new products,
and the establishment of manufacturing technology.

This product contributes to enhancing
efficiency and productivity in processing lines for gears in the automobile
and industrial machinery sectors,
where there is growing demand, led by
the emerging nations.

Vibration Resistant Superhard End Mills“GSX MILL VL Series”
This product can be used in the aircraft
manufacturing sector and power generation and other energy infrastructure
sectors to handle the processing ofdifficult-to-machine materials and toachieve high-efficiency processing.

Superhard roughing end mill
“GSX MILL Roughing”
This product can be used to handledifficult-to-machine materials such as
stainless steel and heat-resistant metals
and makes possible a wide range of cutting
processes from grooving to pocket fluting.

4

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(¥ millions)

2010

2009

as of November 30,
2010

as of November 30,
2009

ASSETS:2009

as of November 30,
2010

as of November 30,
2009

Current liabilities

73,86969,501

Notes and accounts payable

28,952

18,147

Short-term bank loans

34,75543,061Item

LIABILITIES:Current assets

78,46880,802

Cash and cash equivalents

18,86828,373

Notes and accounts receivable

30,861

23,655

Other

10,161

8,292

Long-term liabilities

42,15357,219Inventories

25,47323,629Bonds and long-term debt

29,241

44,264

Other

3,265

5,143

Allowance for retirement benefits

7,107

6,339

Other

5,804

6,615

116,022

126,720

Shareholders’ equity

57,45552,426

Common stock

16,074

16,074

Additional paid-in capital

11,56011,561Retained earnings

30,001

24,967

(181)

(176)

Revaluations and translation adjustments(5,461)(5,232)

Minority interests

2,500

2,332

Total net assets

54,49349,527

Total liabilities and net assets

170,516

176,248

Fixed assets

92,047

95,445

Property, plant and equipment

77,057

81,072

Buildings and structures

29,482

31,211

Machinery and equipment

34,04435,380

Land

7,315

7,320

Other

6,215

7,159

308

391

Intangible fixed assets
Investments and advances

14,681

13,981

Total assets

170,516

176,248

Consolidated Statements of Income
Item(¥ millions)

2010

2009

for the year ended
November 30, 2010

for the year ended
November 30, 2009

134,807

107,586

Operating income

8,245(3,217)

Ordinary income

6,499(5,051)

Extraordinary income

1,201

740

283

1,351

7,417

(5,661)

5,562(7,449)Net sales

Extraordinary losses
Income before income taxes
and minority interests
Net income

5

2010

Total liabilities

NET ASSETS:

Treasury stock

Consolidated Statements of Cash Flows
Item

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents
at beginning of the year
Cash and cash equivalents
at end of the year2010(¥ millions)2009

for the year ended
November 30, 2010

for the year ended
November 30, 2009

20,803(6,008)(24,040)(2,161)(8,376)
26,493(9,506)

15,42828,262

12,83318,75628,262

SHAREHOLDER INFORMATION (As of November 30, 2010)
Number of Shares Issued:
Number of Shareholders:Major Shareholders:

249,193,436
33,505
Number of shares Shareholding ratio
held (thousand)(%)

Shareholders

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

16,186
13,182
12,492
11,888
8,659

6.49
5.29
5.01
4.77
3.47

Breakdown of Shareholders
ForeignInvestors
13,750,000
shares
(5.5%)
Individuals
76,122,000
shares(30.5%)
Securities
Companies
2,402,000
shares
(1.0%)

Stock
Ownership
Associations
34,320,000
shares(13.8%)
Financial
Institutions
77,864,000
shares(31.2%)

Other JapaneseCorporations
44,733,000
shares (18.0%)

DIRECTORS AND AUDITORS (As of February 23, 2011)

CORPORATE OFFICERS

President andRepresentative Director

Managing Director

Director

Director

Corporate Officer

Corporate Officer

Hiroo Honma

Naoshi Katayama

Kenji Susukida

Masayuki Kobayashi

Toshio Sugiura

Yasuo Hatakeyama(As of February 23, 2011)

Managing Director

Managing Director

DirectorStanding Corporate Auditor

Corporate Officer

Corporate Officer

Yukihiko Tanaka

Hideo Terakoshi

Nobuo Segawa

Naoto Nakano

Kiyoshi Meguro

Isao HoriManaging Director

Managing Director

DirectorStanding Corporate Auditor

Corporate Officer

Corporate Officer

Noriyasu Shiba

Keiichi Ogino

Nishiki Seto

Atsushi Saguchi*

Kazuhito Yoshida

Yusaburo Nomura

Managing Director

Director

Director

Makoto Sasaki

Hideo Oba*

Sachio Tanaka

Corporate Auditor

Eiichi Fukushima**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of November 30, 2010)
Foundation:
Capital:Number of Employees:
Major Products:
Machining
RobotsComponents
Materials & Heat Treatment
Major Domestic Offices and Plants:
Toyama Head Office
Tokyo Head Office

Corporate Officer

Corporate Officer

Katsumi Nishijima

Satoshi Hamamoto

Corporate Officer

Corporate Officer

Shinichi Urata

Hidenori Hayashi

December 21, 1928
¥16 billion
5,491 (Consolidated) 2,618 (Non-consolidated)
Cutting Tools, Forming Tools, Cutting Saws, Machine Tools, Precision Machinery, Machining Systems
Robots, Robot Systems, Electronic Equipment
Bearings, Hydraulic Equipment, Automotive Hydraulics, Seismic Isolation Systems, Filtration 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, Japan
Nachi Nagoya Bldg., 2-120-3, Takayashiro, Meitou-ku, Nagoya 465-0095, Japan
Nachi Osaka Bldg., 2-3-7, Honjo-nishi, Higashi-Osaka 578-8522, Japan+81-3-5568-5280+81-52-769-6811+81-6-6748-2510

Toyama Plant

1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan+81-76-423-5111[Cutting Tools / Machine Tools / Bearings / Robots]+81-76-438-4411
3-1-1, Yoneda-machi, Toyama 931-8511, Japan [Special Steels]+81-76-438-8970
3-2-1, Nakada, Toyama 931-8453, Japan [Hydraulic Equipment]+81-76-471-2320
176, Ogake, Namerikawa 936-0802, Japan [Hydraulic Equipment / Automotive Hydraulics /Precision Machinery / Coating / Industrial Furnaces]
NACHI AMERICA INC. NACHI EUROPE GmbH (Germany) NACHI TECHNOLOGY (THAILAND) CO., LTD.
NACHI (SHANGHAI) CO., LTD.

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

6

INVESTOR INFORMATION
Securities Code:Fiscal Year:

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

Ordinary General Meeting of
February
Shareholders:Voting rights at General
Record Date:
Meeting of Shareholders November 30
Year-end dividend
November 30
Interim dividend
May 311,000 shares
Unit:
Shareholders’ Register Custodian/ 3-33-1, Shiba, Minato-ku, Tokyo, Japan
Administrator for Special Accounts: The Chuo Mitsui Trust and Banking Company, Ltd.
2-8-4, Izumi, Suginami-ku, Tokyo 168-0063, Japan
Administrative Office/
The Chuo Mitsui Trust and Banking Company, Ltd.
Mailing Address:
Stock Transfer Agency Department
Toll-free: 0120-78-2031 (Toll-free in Japan)
Inquiries:
Transactions are handled by Chuo Mitsui Trust and Banking(Any question may be
forwarded to the competent Co., Ltd. and its branches nationwide and the head office ofJapan Securities Agents, Ltd. and its branches nationwide.
department.)
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.
Designation by Specific Stock: Assigning an account that the shareholder has withbanks, etc. for each category of stock and receiving dividends through suchaccounts.
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.)
Allocation by Proportion of Shares: Receiving dividends through accounts that theshareholder has with securities firms. (A shareholder who does not have an
account at a securities firm may not use this method.)

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 Chuo Mitsui Trust and Banking Co.,
Ltd., which is the account administrator for special accounts.

2. Questions regarding Payments of Accrued Dividends and Other General Administrative Matters regarding Shares

Please contact Chuo Mitsui Trust and Banking Co., Ltd., which administers theshareholders registry.

Cover photography features screws used in injection
molding for automobile, electric and electronic, andsuper-precision parts.Our Group has kept pace withadvances in injection molding technology towards
ever higher speeds and pressures and has extended
service life by improving corrosion and abrasion
resistance. The pursuit of our own distinctive alloy
designing and melting technology leads to the creation ofparts that are not only high-function, but also
aesthetically pleasing.
Technology pushed to its limits becomes art.
NACHI-FUJIKOSHI endeavors to create art
in the world of manufacturing.