BUSINESS REPORT
2013
December 1, 2012 to November 30, 2013

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
I hope you are in the best of spirits as ourvalued shareholders.
I am pleased to report the NACHI-FUJIKOSHI Group’s business overview for the fiscal
year ended November 2013 (from December
1, 2012 to November 30, 2013).

Business Environment
The NACHI-FUJIKOSHI Group faced a continued strong sense of economic stagnation
throughout the fiscal year. In the first half,
the demand in the automotive and industrial
machinery sector, our main business, declined
due to economic adjustment in emerging
countries including China. However, in thesecond half, following the recovery in emerging markets and the growth in the North
American market, the demand has been on
the upward trend, showing a strong sign thatthe economy has bottomed out and started
recovering.

Business Progress and Results
Within such an environment, the NACHI-FUJI
KOSHI Group has made an effort to expand
its business by proposing a wide range ofsolutions to its customers, making full use of
its strengths as a comprehensive machinery
manufacturer combining tools, machine tools,
robots, bearings, hydraulic equipment, andspecial steel businesses.
In addition, our efforts extended to findnew customers, mainly local clients in othercountries, deploy new products, and expand
the existing product range. As a result, sales
reached 175.6 billion yen, up 2.0% over theprevious period. Of this, sales in the Japanese market were 105.7 billion yen, down
4.1% from the previous period, while overseas sales totaled 69.9 billion yen, up 12.9%.
Looking at each business sector, in themachinery tool business, in addition to capturing domestic and overseas demand in theautomotive, aircraft and industrial machinery
sectors, the deployment of new products
such as tools and robots was successful,achieving total industrial tool sales of 63.8
billion yen, up 2.3% over the previous period.
In the parts business, following the recovery
of demand in the automotive and construction machinery sectors, total parts sales were
98.2 billion yen, up 2.8%. The sales in othersectors were 13.6 billion yen, down 4.8%,
due to the influence of the delay in adjusting
the distribution stock.
In terms of profitability, although there wasan influence from the decline of operation
capacity, the fall of sales prices, and theincrease in raw material costs during the first
half, the prospect of profit in export was
improved thanks to the correction in thevalue of the yen, and the effective “total costdown” approach, such as efforts to improve
productivity. This resulted in 12.3 billion yen
in operating income (16.0% increase fromthe previous period), 11.6 billion yen in ordinary income (28.4% increase), and 6.7 billion
yen in net income for this period (46.3%
increase).

The Group will continue to advance reforms
in each section such as sales and services,
production and procurement, and researchand development, while having our base in
the North American /emerging markets where
growth for the mid- and long-term is expected.
By doing this, we will work on the expansionof merchandise and product range, thecreation of new business opportunities, theimprovement of processes, and fundamental
cost reform.
By these means, the company will work
to improve business results and secure astable profit structure.
In anticipation of the realization of theGroup's long-term vision, we have formulated
a new three-year mid-term business plan that
ends in the 2016 fiscal year, and started its
implementation. We shall strive to further
improve our management practices and business performances.
I would like to express my sincerest appreciation to all of our shareholders for theircontinued support and understanding.

Dividends
With regard to the fiscal year-end dividend,
taking into account the earning situation andfuture business development, it has been
decided that 6 yen in dividends would be
paid per share, which is the same amount as
the previous fiscal year.

Future Initiatives
As for the future outlook, the demand in theautomotive, construction machinery, andaircraft sectors is expected to expand centering on the North American and emerging
markets. It is also expected that economic
recover y will advance in the industrial
machinery /commercial sector.

President and Representative Director

February 2014

RESULTS OF OPERATIONS (Consolidated)
Composition of Sales
MarketBusiness Segment
Special Steels/
Industrial Furnaces
and Others Cutting Tools
8%16%
Hydraulic
Machine Tools/
Equipment
Precision Machinery
19%¥175.6
13%
BillionOverseas

Energy/Infrastructure
19%

Machinery/
Retail28%

Robots7%
Bearings
37%¥175.6
BillionAutomotive
53%

Asia, Oceania,And
the Middle East
58%

America29%¥69.9
BillionEurope13%

Trend in Business Results
Net Sales (¥ billions)Operating Income (¥ billions)
175.6

Net Income (¥ billions)
10.0

14.6

172.2
12.3

166.0
10.6

6.7

4.5

FY

2011

2012

2013

FY

2011

2012

2013

FY

2011

2012

2013

TOPICS
Formulation of Mid-term Business Plan 2016
In anticipation of the realization of our Long-term Vision 2020, we have set up a new milestone, the mid-termbusiness plan covering up to the fiscal year 2016, and have started its implementation. The Group shall strive
to make an all-out effort to further improve our management practices and business performances.
Long-term Vision 2020

Outline of the Mid-term Business Plan 2016
Business plan

“Challenge to become a growing company,
towards a manufacturing company
that fulfills its dream.”
400.0(¥ billions)

Business performance targets
in the fiscal year 2016

250.0

Net Sales
204.8
172.2

175.6

1. Deep cultivation of growth markets
2. Creation of new products and new business
3. Enhance and train associates. Net Sales. Operating Income
Operating profit margin. Net Income

205.0

FY

¥250.0 billion¥25 billion
10%¥16 billion

Deep Cultivation of Growth Markets
In addition to the domestic and western markets, we will focus our investment of management resources on
emerging markets including China, ASEAN, and India, in order to establish our business base in the growing
markets that are expected to expand over the long term.

Expansion of our business base in China
Our core base for business in China started full-scale
operations in February 2013, and local production ofrobots, hydraulic equipments, car control valves, andhigh precision tools has started.
NACHI (JIANGSU) INDUSTRIES CO., LTD.

Full-scale local production in India
In July 2013, local production of bearings
has started in the Indian market, where thedemand in the automotive and industrial
machinery sector is increasing.
NACHI KG TECHNOLOGY INDIA PTE. LTD.

Enhancement of our business basein the ASEAN / North American market
NACHI TECHNOLOGY(THAILAND) CO., LTD.

NACHI TECHNOLOGY INC.

We will enhance our production capacity ofbearings and tools, as the local demandhas been increasing.

Creation of new products and new businesses
We will deploy innovative new products and improved products into markets to create new demand andexpand our business.

Entering a new market
The World's Fastest Lightweight, Compact Robot MZ07
was launched simultaneously worldwide
We have deployed an easyto-handle and easy-to-installcompact robot into markets,
which plays an active role inany application in manufacturing.
Our focus will be placed not
only the traditional automotive / industrial machiner ysector but also the development of new markets such as
electrical / electronics, food,and chemistry sectors.

Wins the Grand Prize at the
Nikkei Sangyo Shimbun
Advertising Award
The newspaper advertisement of “MZ07” has
won the Grand Prize at
the Nikkei Sangyo Shimbun Advertising Award.

Expansion and improvement of products
Improved energy saving functions of hydraulic units
Power consumption is significantly reduced while maintaining the same size as previous products, in order to respondto the needs for saving energy in emerging countries.

Expansion of product range of industrial machinery bearings
Inverter drive hydraulic unit
“NSPi”

We will respond to various needs in the industrial machinery
market, such as improving load bearing and ensuring high rigidity.

Wins multiple awards
MZ07 won the Best 10
Ne w Pro duc t s Aw ard,
selected by Nikkan Kogyo
Shimbun.
A scene from the award ceremony

AQUA Drill EX FLAT series
won Grand Award at the“CHO” MONODZUKURI
Innovative Parts and Components Award, selectedby the MONODZUKURI
Nippon Conference andNikkan Kogyo Shimbun.

Bearings for supporting small ball screws“XY type”

AQUA Drill EX FLAT series

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(¥ millions)2013(¥ millions)

2012

Item

(as of November 30, 2013) (as of November 30, 2012)

2013

2012

(as of November 30, 2013) (as of November 30, 2012)

LIABILITIES:ASSETS:
Current assets

101,135

Current liabilities

79,292

66,154

Notes and accounts payable

38,91833,979Bonds and short-term bank loans

23,795

18,595

Other

16,57913,578Long-term liabilities

47,26355,802

Bonds and long-term debt

31,32842,1894,578

Allowance for retirement benefits

6,626

6,463

Other

9,308

7,149

126,556

121,956

Shareholders’ equity

75,96470,756

Common stock

16,074

16,074

Additional paid-in capital

11,561

11,561Retained earnings

48,52743,312

92,704

Cash and cash equivalents

18,591

15,901

Notes and accounts receivable

39,896

38,612Inventories

35,44833,611

Other

7,199

Fixed assets

106,780

94,476

Property, plant and equipment

82,35478,295

Buildings and structures

28,80327,018

Machinery and equipment

38,47235,774

Land
Other

7,108

7,103

7,970

8,399

716

448

Investments and advances

23,70915,732

Total assets

207,916

187,181

Intangible fixed assets

Consolidated Statements of Income
Item(¥ millions)

2013

2012

(as of November 30, 2013) (as of November 30, 2012)

Total liabilities

NET ASSETS:

Treasury stock

△ 199

△ 192

Revaluations and translation adjustments

1,157△ 8,855

Minority interests

4,238

3,324

Total net assets

81,36065,224

Total liabilities and net assets

207,916

187,181

Consolidated Statements of Cash Flows
Item

2013

(¥ millions)2012(as of November 30,2013) (as of November 30,2012)

Net sales

175,697

172,259

Cash flows from operating activities

Operating income

12,338

10,63920,737

11,819Cash flows from investing activities

Ordinary income

11,6989,111△ 10,413△ 11,916

2,725

36

1,240

365

2,467

2,683

10,858

8,782

15,761

13,078

6,706

4,585

Cash 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

△ 9,188400

18,22915,761

Extraordinary income
Extraordinary losses
Income before income taxes
and minority interests
Net income

SHAREHOLDER INFORMATION (As of November 30, 2013)
Number of Shares Issued: 249,193,436
25,976
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratio is calculated after
subtracting treasury stock (595 thousand shares).

Breakdown of Shareholders

Individuals
48,881 thousand(19.6%)

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

Shareholders

NACHI WANEI Stockholding
Employees’ Stock Ownership Plan
Toyota Motor Corporation
Japan Trustee Services Bank, Ltd. (holder of trust units)
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

18,715
13,396
13,182
12,011
11,888

7.53
5.39
5.30
4.83
4.78

Stock
Ownership
Associations
38,807 thousand(15.6%)

ForeignInvestors
21,993 thousand(8.9%)

Securities
Companies
1,510 thousand(0.6%)

Financial
Institutions
90,883 thousand(36.6%)
Other JapaneseCorporations
46,522 thousand(18.7%)DIRECTORS AND AUDITORS (As of February 19, 2014)

CORPORATE OFFICERS

President andRepresentative Director

Corporate Officer

Hiroo Honma

Managing Director

Yukihiko Tanaka
Managing Director

Managing Director

Standing Corporate Auditor(As of February 19, 2014)

Kenji Susukida

Masayuki Kobayashi

Atsushi Saguchi*

Managing Director

DirectorStanding Corporate Auditor

Kiyoshi Meguro
Shinichi Urata

Kazuhito Yoshida

Katsumi Nishijima

Hiroshi Yamada

Managing Director

Director

Corporate Auditor

Isao Hori

Toru Inoue

Managing Director

Director

Noriyasu Shiba

Hidenori Hayashi

Managing Director

Director

Naoshi Katayama

Director

Hideo Oba*

Eiichi Fukushima*

Standing Corporate Auditor

Corporate Officer

Fumio Honda

Tetsu Furusawa
Nobuo Okada

Corporate Officer*Outside director or outside
corporate auditor.

Corporate Officer

Atsushi Umezawa
Corporate Officer

CORPORATE INFORMATION (As of November 30, 2013)
Foundation:
Capital:Number of Employees:
Major Products:
Machining business
RobotsComponents
Materials & Heat Treatment
Major Domestic Offices and Plants:
Toyama Head Office
Tokyo Head Office

Shigemi Tochitani

Corporate Officer

Hideaki Hara

Corporate Officer

Tadataka Hori
Corporate Officer

Shigeru Togashi
Corporate Officer

Hiroshi Goto

Corporate Officer

Masatoshi Akagawa

December 21, 1928
¥16 billion
2,767 (Group employees 6,072)
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
Sumitomo Nakanoshima Bldg. 5F, 3-2-18, Nakanoshima Kita-ku, Osaka 530-0005, Japan

Toyama 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 /Precision Machinery / Coating / Industrial Furnaces]
NACHI AMERICA INC. NACHI EUROPE GmbH NACHI SINGAPORE PTE. LTD.
NACHI TECHNOLOGY（THAILAND）
CO., LTD. NACHI (SHANGHAI) CO., LTD. NACHI (JIANGSU) INDUSTRIES CO., LTD.

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

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/ 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)
Transactions are handled by Sumitomo Mitsui Trust Bank,
Inquiries:(Any question may be
Limited and its branches nationwide and the head office of
forwarded to the competentJapan 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 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 the world's fastest lightweight,
compact robot MZ07.
Featuring the world's fastest moving function
realized by the lightweight and highly rigid bodyand unique control technology,
MZ07 dramatically improves productivity.