BUSINESS REPORT
2021
December 1, 2020 to November 30, 2021

Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude to our shareholders foryour continued support and patronage.
We report the results for the NACHI-FUJIKOSHI Group for the period
from December 1, 2020 to November 30, 2021.

Business Environment

The operating environment for the group during the current period has been
on a gradual recovery trend in general, as economic activity has continued
to normalize, and the economics of developed nations such as Japan andwestern countries have continued to recover. Nevertheless, the outlook
remains uncertain due to the re-expansion of COVID-19, the global shortageof semiconductors which has led to a decline in automotive manufacturing,
concerns over a slowdown in the economy of China, and so on.

Business Progress and Results

Under the circumstances, the NACHI-FUJIKOSHI Group has been
making full use of it s streng th as a comprehensive machiner y
manufacturer focused on the robotics business, and also encompassing
cutting tools, machine tools, bearings, hydraulic equipment, and special
steel businesses to realize the expansion of orders and sales bydeveloping new products and offering technical proposals that contributeto users’ manufacturing. We have also been working on the construction
and streamlining of our production systems so as to flexibly respond tofluctuations in demand, aiming to improve profit abilit y. We arefurthermore proceeding with structural reform across overall businesses
with a view to industrial structure changes in the medium to long term,
including decarbonization and the shift to EVs.
As a result, consolidated net sales in the current period reached 229.1
billion yen, an increase 14.0% year-on-year, due to the recovery indemand primarily in the automotive and construction machinery sectors,
as well as industrial machinery and sales sectors. This includes domestic
sales of 116.7 billion yen (increase 11.8% YoY) and overseas sales of112.3 billion yen (increase 16.3% YoY). In terms of profitability, we haveachieved overall cost reductions through measures implemented since lastyear, including improved productivity from automation and streamlined
operations, expanded in-sourcing of manufacturing, and savings on
selling, general and administrative expenses from improved operational
efficiency, while also improving capacity utilization through increased sales
and manufacturing. Hence, this term’s operating income, ordinary income,and the period net income at tribut able to the parent company
shareholders were 14.7 billion yen (2.1 times YoY), 14.4 billion yen (2.6times YoY), and 9.9 billion yen (4.1 times YoY) respectively.

Dividends

With regard to the fiscal year-end dividends, taking into account the
profit and the future business development, it has been decided that thedividends will be 100 yen per share.

Future Initiatives

Regarding the outlook for the business environment, while we still see
impact from the re-expansion of COVID-19 and the global shortage ofsemiconductors, demand in the automotive, industrial machinery,
construction machinery, and commercial sectors are all expected torecover y moderately. On the other hand, our group’ s busine s senvironment is changing drastically, including the acceleration of
initiatives for the adoption of EVs toward realizing a decarbonized society
in the automotive field, which is our company’s main area of business,and business reorganization. Furthermore it contains progress in thedigital transformation of manufacturing, and response towards socialand environmental challenges including the SDGs.
The NACHI-FUJIKOSHI Group will leverage its unique strengths
possessing diverse business, technological, and manufacturingknowhow, including those related to robotics, and will create new
business opportunities. We will strengthen all aspects of sales ands e r v i c e, m anu f ac t ur ing an d p ro curem ent , an d re s e arch an ddevelopment. We will catch market movements and needs to promotesales of products and services that cooperate and integrate technologies
of all our departments, and strive to further enhance our performance byimproving productivity from automation and streamlining. Furthermore,with the goal of achieving sustainable business growth, we will commit to
the challenges, such as the environment, society, and governance.
We would like to express our sincerest appreciation to all of ourshareholders and other stakeholders for their continued support.
February 2022

Chairman and
Representative Director

President andRepresentative Director

RESULTS OF OPERATIONS (Consolidated)
Composition of Sales
Business Segment

MarketSpecial Steels/ Cutting Tools
Industrial Furnaces
13%
and Others
Machine Tools
6%6%
HydraulicEquipment
Robots¥229.1
12%
31%
BillionRegionASEAN, etc.
13%

Energy/Infrastructure26%¥229.1
BillionChina
19%

Automotive
48%

Machinery/
Retail26%

Bearings
32%

Europe5%
Americas12%

Trend in Business Results
Net Sales (billion yen)

Japan
51%

¥229.1
BillionNet Income Attributable to
Owners of the Parent (billion yen)

Operating Income (billion yen)(250.0)249.0(11.0)

229.1
201.0

9.9

(17.0)
8.2

14.7

13.3

6.8
2.4

FY

2019

2020

2021

2022
(forecast)

FY

2019

2020

2021

2022
(forecast)

FY

2019

2020

2021

2022
(forecast)TOPICS
Towards Achieve Sustainable Growth
As the industrial structure changes drastically such as decarbonization and the shift to EVs, we will leverage ourtechnological strength in general manufacturing to develop proprietary new products targeting for growth sectors including
EVs and industrial machinery promote sales expansion all around the world.

Processing andRobot technologies

Elemental andindustrial technologies

Materials
and Coating
Technologies

Expanding Adoption to EVs... We will leverage our suite of general manufacturing technologies, including material technologies toincrease customer case studies

Develop potential demand of the industrial machinery sector... We will develop the potential demand of the prospective expansion market, suchas construction machinery and electrical and electric small parts.

1. Expanding Adoption to EVs
We will continue to develop parts, materials and production equipment and expand sales of our products for EVs. We will
also expand adoption our products to EV motors, reduction gears, electric compressors, and parts used in lock mechanisms.

Thin-walled deep groove ball bearing
for electric units

Skiving Multi-function Machine GMS100 (Released February,used for processing of EV and other component parts)

Actuator(Used in parking lock mechanisms)

2. Develop the potential demand of the industrial machinery sector
Expanding Sales of New Products
In response to automation needs, we will improve our lineup of small-size robots, and introduce the micro-drill
targeting small-bore drilling processing into the market. We are furthermore expanding sales of environmentallyfriendly products which have increasing needs corresponding to carbon neutrality.

SCARA robot and Compact robot (Extensive lineup
supporting the full customer manufacturing process)

AquaREVO Drills Micro (Used for small-bore drillingin the electrical machinery and electronics sectors)

Energy saving solenoid valve (Used inmachine tools, forging machines, etc.)

Strengthening our Manufacturing system
We will increase our production capacity of bearings for industrial machinery and hydraulic equipment for construction machinery in Japan and China, to creating a pillar of future revenue source. We will furthermore transfer
the production bases of standard radial bearings to Thailand to create a manufacturing system that can overcome
the global competition through integrated local production.

Ball screw support bearings

Hydraulic equipment for
construction machinery

NACHI (JIANGSU) INDUSTRIES CO.,LTD. (China) (Increased productionof hydraulic equipment in China)

New standard radial bearing
plant in Thailand(Operations started this spring)

Winner of the Ten Best New Products Award by Nikkan Kogyo Shimbun
Our assembly automation solution Robot Connector Insertion Application was
winner of the Ten Best New Products Award by Nikkan Kogyo Shimbun.
This achieved automation of the cable insertion process, a huge demand forelectrical and electric manufacturing.
The product was awarded for both its high-speed and high-accuracy support ofa variety of insertion tasks utilizing new visual control technology leveraging
our uniquely algorithm, and the convenience offered by its easy setup.
4

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(million yen)(million yen)

November 30, 2020 November 30, 2021

November 30, 2020 November 30, 2021

Item(for your reference)

ASSETS:(for your reference)

LIABILITIES:
137,960

159,258

Cash and cash equivalents

40,11841,771

Notes and accounts receivable

45,93855,100Inventories

48,151

57,381

Current assets

3,752

Other

5,005

Current liabilities

92,926

103,344

Notes and accounts payable

33,50947,826

Short-term loans

48,272

29,208Other

11,14426,309Long-term liabilities

75,87477,755Long-term debt

54,85256,266

Allowance for retirement benefits

10,148

9,754

Other

10,873

11,734

Total liabilities

168,800

181,100

Fixed assets

155,099

160,053

Property, plant and equipment

113,085

114,260

Buildings and structures

29,60329,254

Shareholders’ equity

113,302

119,427

Machinery and equipment

65,65063,811

Common stock

16,074

16,074

Additional paid-in capital

11,243

11,401

NET ASSETS:

Land

9,473

9,465

Retained earnings

88,12396,875

Other

8,358

11,728Treasury stock‒ 2,139‒ 4,924

Intangible fixed assets

2,828

2,861

Revaluations and translation adjustments

3,591

10,676

Investments and advances

39,18542,931

Non-controlling interests

7,366

8,107

Total net assets

124,259

138,211

Total assets

293,060

319,312

Total liabilities and net assets

293,060

319,312

Consolidated Statements of Income
Item

Net sales
Operating income
Ordinary income
Extraordinary income
Extraordinary losses
Income before income taxes
and minority interests
Net income attributable toowners of the parent(million yen)

Year EndedYear Ended
November 30, 2020 November 30, 2021

Consolidated Statements of Cash Flows
Item(million yen)

Year EndedYear Ended
November 30, 2020 November 30, 2021

201,055

229,117

Cash flows from operating activities

19,25833,0806,850

14,718Cash flows from investing activities‒ 13,996‒ 14,172

5,508

14,457

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

13,858‒ 18,608

18,778

1,438

20,15738,93638,93640,374

30

400

677

247

4,861

14,610

2,458

9,993

SHAREHOLDER INFORMATION (As of November 30, 2021)
24,919,343
Number of Shares Issued:
18,395
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (810 thousand shares).

Breakdown of Shareholders
Foreign
Corporations
2,670 thousand(11.1%)
Individuals
4,433 thousand(18.4%)

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

Shareholders

NACHI WANEI Stockholding
The Master Trust Bank of Japan, Ltd. (trust accounts)
Employees’ Stock Ownership PlanMUFG Bank, Ltd.
Custody Bank of Japan, Ltd. (trust accounts)

2,380
2,130
1,445
1,188
869

9.87
8.84
6.00
4.93
3.61

Financial
Institutions
8,861 thousand(36.7%)

Other JapaneseCorporations
3,032 thousand(12.6%)

Securities Companies
417 thousand(1.7%)DIRECTORS AND AUDITORS (As of February 22, 2022)
Chairman and
Representative Director

Director

Hiroo Honma

Managing Director

Hideaki Hara

Kyo Kitayama

President andRepresentative Director

Director

Tetsuo Koshihama

Jun Sakamoto
Executive
Vice President

Hidenori Hayashi

Director

Tetsu Furusawa
Director

Director

Shuichi Hirose

Akira Kunisaki

Director

Kazuyoshi Ichikawa

Stock
Ownership
Associations
4,693 thousand(19.5%)

Director

Director

Director

Director

Yuichi Sawasaki
Tsutomu Kurosawa

Junichi Kodama*Standing Corporate Auditor

Masayuki Kobayashi

Standing Corporate Auditor

Yo Okabe*

Director

Masashi Hori

Standing Corporate Auditor

Hiroyuki Ushimaru

Masakazu Yamazaki*

Director

Corporate Auditor

Noboru Miura

Tokuhiro Matsunaga**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of November 30, 2021)
Foundation:
Capital:Number of Employees:
Major Products:
Machinery and tools business
Components business
Other business
Major Domestic Offices and Plants:
Head OfficeToyama Plant
Eastern Japan Main BranchCentral Japan Main BranchWestern Japan Main Branch
Higashi-Toyama Plant
Namerikawa Plant
Major Overseas Offices and Plants:

December 21, 1928
¥16 billion
3,266 (Group employees 7,205)
Cutting Tools, Forming Tools, Cutting Saws, Machine Tools, Machining Systems, Robots, Robotics Systems
Bearings, Hydraulic Equipment, Automotive Hydraulics
Special Steels, Coating, Industrial Furnaces
Shiodome Sumitomo Bldg. 17F, 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-0021, Japan
1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan(Cutting Tools / Machine Tools / Bearings / Robots)

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

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
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-FUJIKOSHI (CHINA) CO., LTD.
NACHI (JIANGSU) INDUSTRIES CO., LTD. (China) NACHI TECHNOLOGY（THAILAND）
CO., LTD. (Thailand)
NACHI SINGAPORE PTE. LTD. (Singapore)

INVESTOR INFORMATION
Securities Code:Fiscal Year:

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

Timing of Ordinary General
February
Meeting of Shareholders:Annual General Meeting of Shareholders on November 30
Record Date:
Year-end dividend on November 30
Interim dividend on May 31
100 shares
Unit:
Shareholder registry administrator/ 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)
Inquiry contact:
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, secure, 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 an
account 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 PhotographThis is the Robot Connector Insertion Application used in electrical and electronic parts
manufacturing. Offers high-speed and high-accuracy cable insertion for high-growth products inthe future such as smartphones, tablets andautomotive displays by new visual control
technology leveraging our proprietary algorithm.