INTERIM BUSINESS REPORT
2011
December 1, 2010 to May 31, 2011

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
We wish to express our deepest gratitude to
our shareholders for the exceptional support
that they have always extended to us.
We also wish to extend our utmost sympathies to the victims of the Great East
Japan Earthquake and to offer our heartfelt
prayers for the most expeditious of recoveries in the disaster-stricken areas.
We hereby report the interim results for
the NACHI-FUJIKOSHI Group for the period
from December 1, 2010 to May 31, 2011.

Business Environment
The business environment surrounding the
N ACHI - FUJIKO SHI Group during theinterim period under review saw production
cutbacks by automobile manufacturers aswell as weak overall demand as the result of
the Great E ast Japan E ar thquake that
occurred on March 11 this year. However,
economic recovery has steadily gained asolid foothold overall, as evidenced byincreasingly clear signs of a turnaround in
the consumer and industrial machinery
markets against the backdrop of the robust
expansion of the emerging economies.

Business Progress and Results
Given this environment, the NACHI FUJIKOSHI Group moved for ward withinitiatives to cultivate new markets and revit alize ex is ting one s by playing to thestrengths generated by the Group’ s position in the machining, robotics, functionalparts and materials businesses.
As a result, sales for the interim period
under review totaled 78.9 billion yen, up
28.3% over the same interim period of theprevious fiscal year. Of this, sales in theJapanese market reached 47.5 billion yen,
up 24.1% over the same interim period of
the previous fiscal year, while overseas

1

sales totaled 31.3 billion yen, up 35.3%.
In terms of profitability, although affectedby such factors as surging material costs
and deteriorating export margins due to theappreciation of the yen, efforts to curb overall costs including continued efforts to promote cost cut ting as well as improved
capacit y utilization as the result of there c over y in s ale s and manu facturing
enabled us to secure 7.1 billion yen in operating profits, 2.3 times higher than in thesame interim period of the previous fiscal
year, 6.3 billion yen in ordinary profits, 2.8
times higher, and 5.1 billion yen in net
income, also 2.8 times higher.
We wish to forego the payment of interim
dividends for this interim period.

Future Initiatives
As for the outlook moving forward, we believethat the gradual recovery will continue,
driven by the emerging economies. However,concerns such as further rises in material
costs and decline in the profitability of exports
as the result of the appreciation of the yenlead to continued expectations of an uncertain future.
The NACHI-FUJIKOSHI Group will endeavor
to cultivate new markets in the emerging
economies as well as the energy andinfrastructure segments, where long-term
growth is anticipated. The company will also
move forward with reinforcement of researchand development and thoroughgoing improvement and continuous cost reduction in allareas of manufacturing and sales. By thesemeans, the company will develop a stableprofit structure and work to improve businessresults.
I would like to express my sincerest
appreciation to all of our shareholders fortheir continued support and understanding.

President andRepresentative Director

August 2011

RESULTS OF OPERATIONS (Consolidated)
Sales by Market

Sales by Business Segment
Special Steels/
Industrial Furnaces
and Others Cutting Tools
16%
9%
Hydraulic
Machine Tools/
Equipment
Precision Machinery
19%
¥78.9
10%
BillionRobots7%

Bearings
39%

Overseas Sales

Energy/Infrastructure
17%

Machinery/
Retail36%

Net Sales (¥ billions)

America25%¥78.9
BillionAutomotive
47%

Asia, Oceania,
andthe Middle East
63%

¥31.3
BillionEurope12%

Operating Income (¥ billions)■Interim■Full-year■Interim■Full-year

204.8

15.5
134.8
107.5

104.8

9.5
8.2

78.9
55.4

61.5
3.0

7.1

30

(1.7)
(3.2)
2008

2009

2010

2011

2008

2009

2010

2011

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TOPICS
Accelerating Development of Emerging Economy Markets
We at NACHI-FUJIKOSHI are working to expand our presence in fast-growing China and India byexpanding our sales and service coverage and enhancing production capacity there.

Net Sales in Emerging Nations
We will aim to increase the percentage of net sales inemerging economies from 26% in fiscal year 2010 toover 35% in fiscal year 2013.
■Emerging Economies■North America

Net Sales(￥100
million)

Expanding Our Presence in the Chinese
MarketWe undertook a massive expansion of our
local staff in order to develop the Chinese
market. We established new sales
operations in Shenyang and Chongqing in
addition to existing operations in Shanghai,
and reinforced our business development, technical and servicing capacities. We are also cultivating local customers in the automobile, machine
tools, construction machinery and other sectors.

2000
Outlook

1000

0Emerging
Economies
251
365
(23%)
(18%)
08

NACHI MOTHERSON PRECISION LIMITED (India)
We established a manufacturing subsidiary for precision tools and began
operations there in June, 2011, in order to fully develop our tools, machine
tools and other machining businesses in India’s rapidly modernizing industrial
market. We are working to develop new local customers in addition to subsidiaries and affiliates of Japanese businesses and other existing customers.

3■Western Europe■JapanShowroom(India)

09

356
(26%)
10

485
(29%)

Emerging
Economies
Net Sales
Over 35%

2011

2013

Aggressively Introducing New Products
We are working to pursue further opportunities in the automobile and industrial machinery sectors and todevelop our business in the energy and infrastructure sectors by developing and releasing new products.
Press Tending Robot
High speed transfer is achieved through thelightweight and highly rigid design of the robot
and control technologies such as cutting edge
motor drive and vibration suppression control. We
are expanding sales of the press tending robot
mainly in the emerging economy markets, where
there is a growing need for automation.

FLEX-hand
The FLEX-hand is capable of flexible handlingworkpieces in a wide range of types andshapes. The FLEX-hand helps to automatetransfer processes and reduce manpower.

AC Servo Motor Drive
Energy Saving Hydraulic Unit
“Power Fit”
Electricity consumption is reduced by
80% by adopting an energy conserving function that reduces rotation of
the hydraulic pump to the absolutely
necessary minimum by optimallycontrolling the cylinder rotation speed
and force of the press.

Opened Mobile Movies Website
You can see NACHI robots in action in a wide rangeof working environments on your smartphones andother mobile phones.
Precautionary Statement
Large packet transmission charges may be incurred by accessing
mobile movies. We recommend that you select “flat rate packet
services” and similar payment systems before you access our website.

Vacuum Degreasing System
The New “Clean Master J” Series
A massive improvement in cleaning performance has
been achieved by equipping the system with four cleaning
functions—jet, spray, shower, and vapor—that enable theuser to choose the optimal cleaning method for a wide
variety of parts and components in automobile, industrial
machinery and electric machinery sectors.

4

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(¥ millions)Interim 2011(as of May 31, 2011)Item(as of May 31, 2010)ASSETS:Interim 2011

Interim 2010(as of May 31, 2011)(as of May 31, 2010)

LIABILITIES:Current assets

88,664

83,708Current liabilities

73,91272,011

Notes and accounts payable

32,62424,434

Short-term bank loans

24,03739,466

Other

17,2508,110Long-term liabilities

48,082

53,984

Bonds and long-term debt

35,05941,103

3,943

Allowance for retirement benefits

6,827

6,674

Other

6,195

6,206

121,994

125,996

Cash and cash equivalents

21,921

29,419Notes and accounts receivable

33,61825,995Inventories

29,067

24,349

4,055

Other

Fixed assets

92,652

94,242

Property, plant and equipment

77,33879,398

Buildings and structures

28,88230,813

Shareholders’ equity

61,58253,870Machinery and equipment

34,56435,320Common stock

16,074

16,074

7,348

Additional paid-in capital

11,56011,560Retained earnings

34,136

26,415

7,321

Land

6,570

Other

5,916

316

342

Investments and advances

14,997

14,501

Total assets

181,317

177,951

Intangible fixed assets

Consolidated Statements of Income
Item

5(¥ millions)Interim 2010(¥ millions)Interim 2011

Interim 2010

December 1, 2010
-May 31, 2011

December 1, 2009
-May 31, 2010

Net sales

78,91861,513Operating income

7,175

3,059

Ordinary income

6,348

2,271

Extraordinary income

53

19

Extraordinary losses
Income before income taxes
and minority interests
Net income

144

44

6,256

2,246

5,129

1,820

Total liabilities

NET ASSETS:

(189)

(180)

Revaluations and translation adjustments(4,941)(4,342)

Minority interests

2,681

2,426

Total net assets

59,322

51,954

Total liabilities and net assets

181,317

177,951

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 in cash
and cash equivalents
Cash and cash equivalents
at beginning of the year
Cash and cash equivalents
at end of interim of the year

Interim 2011(¥ millions)Interim 2010

December 1, 2010
-May 31, 2011

December 1, 2009
-May 31, 2010

7,394

12,282(4,143)(3,965)(211)(7,405)

3,135

1,049

18,75628,262

21,891

29,311SHAREHOLDER INFORMATION (As of May 31, 2011)
Number of Shares Issued:
Number of Shareholders:Major Shareholders:

249,193,436
30,882
Number of shares Shareholding ratio
held (thousand)(%)

Shareholders

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

16,746
13,182
12,60312,081
11,888

6.72
5.29
5.06
4.85
4.77

Breakdown of Shareholders
ForeignInvestors
17,515,000
shares
(7.0%)
Individuals
64,785,000
shares
(26.0%)
Securities
Companies
2,381,000
shares
(1.0%)

Stock
Ownership
Associations
35,250,000
shares
(14.1%)
Financial
Institutions
83,976,000
shares(33.7%)

Other JapaneseCorporations
45,284,000
shares (18.2%)

DIRECTORS AND AUDITORS (As of August, 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 August, 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 May 31, 2011)
Foundation:
Capital:Number of Employees:
Major Products:
Machining business
RobotsComponents
Materials business
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
5,601 (Consolidated) 2,615 (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

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 (Germany) NACHI SINGAPORE PRIVATE LIMITEDNACHI (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 105-8574, 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.

The cover photograph captures an image of a NACHIFUJIKOSHI large diameter helical broach, which isused for machining internal automobile transmission gears.
The broach features a continuous helical cutting lip thatenables it to achieve high speed, high precision machiningof inner gears.
This helps to make shifting gears in automobiles a seamlessexperience.
Pursuing the ultimate in gear machining, NACHIFUJIKOSHI has created a high precision cutting lip thatis worthy of a beautiful work of art.
Technology pushed to its limits becomes art.
NACHI-FUJIKOSHI endeavors to create art in the worldof manufacturing.