BUSINESS REPORT
2011
December 1, 2010 to November 30, 2011

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
I trust that all is well for our value dshareholders.I wish to express my heartfelt sympathy for the victims of the Great
East Japan Earthquake.
I am pleased to report the results for
the NACHI-FUJIKOSHI Group for the
fiscal year ended November 30, 2011
(from December 1, 2010 to November 30,2011).

Business Environment
The NACHI-FUJIKOSHI Group faced achallenging business environment overall
during the fiscal year due to such factors
as the impact of the Great East Japan
Earthquake and the floods in Thailand,and soaring yen exchange rates and theglobal economic slowdown touched off by
the financial and debt crises in Europe.

Business Progress and Results
Given this environment, the NACHIFUJIKOSHI Group moved forward with the
expansion of its business, focusing on theemerging economies, by playing to thestrengths generated by its position in themachining, robotics, functional parts, andmaterials businesses that enables it topropose a wide range of solutions to its
customers.
As a result, sales for the fiscal year
totaled 166.0 billion yen, up 23.3% overthe previous fiscal year. Of this, sales in
the Japanese market reached 101.9 billion
yen, up 21.1% over the previous fiscal
year, while overseas sales totaled 64.1
billion yen, up 26.6%.
In terms of prof it abilit y, althoughaffected by such factors as deteriorating
export margins due to the appreciation of
the yen and surging material costs, efforts

1

to curb overall costs including continued
efforts to promote cost cutting in addition
to improved capacity utilization as theresult of the increase in sales and manufacturing enabled us to secure 14.6 billion
yen in operating profits , up 77.6% overthe previous fiscal year, and 12.9 billion
yen in ordinary profits, up 98.7% over theprevious fiscal year.
In addition to this, accounting for
impairment loss, loss from investment
securities revaluation and other extraordinary losses, as well as corporate tax andother such items, brought net income forthe fiscal year to 10.0 billion yen, up
80.1% over the previous fiscal year.

subjected to an on site inspection by theJapan Fair Trade Commission with regard
to ball bearings transactions due to allegations of Antimonopoly Act violations.
This NACHI EUROPE GmbH, a subsidiary of this company, was also subjected to
an investigation in November by the European Commission with regard to EU competition law concerning ball bearings.
This company shall, while receiving
advice from experts, cooperate fully with
the inspection and investigation conducted by the authorities.
I would like to express my sincerest
appreciation to all of our shareholders fortheir continued support and understanding.

Cash Dividends
With regard to the fiscal year-end dividend,since the NACHI-FUJIKOSHI Group wasable to secure meaningful profits, thegroup is expressing its appreciation for the
support of its shareholders and is paying 6
yen in dividends per share, up 2 yen fromthe previous fiscal year.

Future Initiatives
As for the outlook moving forward, a difficult situation is expected, where the financial and debt problems in Europe will
worsen, sending ripples throughout the
global economy. Japanese manufacturing
should also be deeply impacted throughthe appreciation of the yen and lower
sales prices due to increased competition.
The Group shall strive to further improve
our business results and to establish astable foundation for profits in order toachieve the objectives of its Long-term
Vision and its Mid-term Business Plan.
Finally, in July 2011, this company was

President andRepresentative Director

February 2012

RESULTS OF OPERATIONS (Consolidated)
Sales by Market

Sales by Business Segment
Special Steels/
Industrial Furnaces
and Others
Cutting Tools
9%16%
HydraulicEquipment
19%

Machine Tools/
Precision Machinery¥166.012%BillionRobots6%

Bearings
38%

Net Sales (¥ billions)

Overseas Sales

Energy/Infrastructure
17%

America
Automotive
47%¥166.0BillionMachinery/
Retail36%

Operating Income (¥ billions)166.0

Asia, Oceania,¥ 64.1
andthe Middle East Billion
62%

25%
Europe13%

Net profits for Fiscal Year (¥ billions)

14.6

10.0

134.8
107.5
5.5

8.2

(3.2)
2009

2010

2011

2009

(7.4)
2010

2011

2009

2010

2011

2

TOPICS
Permeating emerging economies with the NACHI brand
The group is expanding its business presence in China, India, ASEAN, Latin America and other emerging
markets by expanding its sales and services operations and beefing up its production capacities there.

Net sales trends in emerging economies.
The group shall increase the share of emerge economies
in total sales to more than 35% in fiscal year 2013.
Net Sales(￥100
million)

2000■Emerging Economies■North America
2048■Western Europe■Japan2100

Traveling motor

1660

MQL
Power Cell

1348
1075
1000

0

Expansion in the China market
Emerging
Economies
365
251
(18%)
(23%)
08

09

356
(26%)

471
(28%)

Emerging
Economies
Net Sales(Over 35%)

10

2011

2013

3

The group newly established sales operations in Beijing and Guangzhou in addition to Shanghai, Shenyang and Chongqing with the aimof developing local customers in China, and expanded sales andservice operations by significantly increasing the local staff. The
intent is to take in the strong demand in the automobile, machine
tool and construction machinery sectors.

■The India market■The ASEAN market

NACHI MOTHERSON PRECISION LIMITED (India)

NACHI INDUSTRIES PTE (Singapore)

The group launched full-scale operations for the manufacture
and resharpening of precision tools in the India market. The
group is also developing customers in the local automobile
and two-wheel vehicle and industrial machinery sectors
through the sale of tools and machine tools.

Crankshaft processing

DrillsThe group increased its production capacity by a wide margin by
expanding drill production lines in its Singapore and Philippine
factories in order to meet increasing demand in the ASEAN and East
Asia markets.

Developing markets by expanding business features
The group is undertaking the development of new markets and revitalization of existing ones by expanding
its business features and product lineups through the development of new products and improvement ofexisting ones.
Worldwide simultaneous launch of the hyperspeed“SRA” robot
The SRA robot achieves both low weight and highrigidity. Combined with the latest control technology, it dramatically shortens welding process cycle
time for automobile bodies. This results in a
dramatic improvement of productivity in automobile
manufacture.

CFRP processing drills“Crystal Diamond-coated Drill”
The Nikkan
Kogyo Shimbun
Best 10 New
Products Prizereceived

The Crystal Diamond-coated Drill,with its newly developed coating
highly resistant to wear and abrasion,
attains a lifespan three times longer
than existing products. It helps raise
productivity in aircraft manufacture.

Increasing production capacity
The group shall respond to increasing demand in aircraft and power
generation equipment by expanding processing lines dedicated to
Fir tree forms broaches.

High-precisionball bearings

High-precision bearings factory(Toyama Plant)

The group reinforced manufacturing capacity forhigh-precision ball bearings, which are used for machine
tools and injection molding machines, robots, semiconductor manufacturing equipment and the like.

Fir tree forms Broaches

Fir tree forms broach factory (Toyama Plant)

4

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(¥ millions)2011

as of November 30,
2011

Item

as of November 30,
2010

ASSETS:

2011

2010

as of November 30,
2011

as of November 30,
2010

Current liabilities

75,37773,869Notes and accounts payable

36,75828,952

Short-term bank loans

25,21634,755

LIABILITIES:Current assets

89,44378,468Cash and cash equivalents

13,11818,868Notes and accounts receivable

38,19230,861

Other

13,403

10,161Long-term liabilities

43,45642,153Inventories

32,79025,473

Bonds and long-term debt

30,55629,241

Other

5,342

3,265

Allowance for retirement benefits

6,553

7,107

Other

6,346

5,804

118,834

116,022

Fixed assets

90,347

92,047

Property, plant and equipment

76,23577,057

Buildings and structures

27,93929,482

Shareholders’ equity

67,66457,455

Machinery and equipment

34,55034,044

Common stock

16,074

16,074

Land

7,022

7,315

Additional paid-in capital

11,56011,560Retained earnings

40,21830,001

(189)

(181)

Revaluations and translation adjustments(9,465)(5,461)

Minority interests

2,758

2,500

Total net assets

60,95754,493

Total liabilities and net assets

179,791

170,516

Other

6,722

6,215

391

308

Intangible fixed assets
Investments and advances

13,72014,681

Total assets

179,791

170,516

Consolidated Statements of Income
Item(¥ millions)

2011

2010

as of November 30,
2011

as of November 30,
2010

Net sales

166,023

134,807

Operating income

14,643

8,245

Ordinary income

12,913

6,499

45

1,201

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

5(¥ millions)

2010

734

283

12,223

7,417

10,016

5,562

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

2011(¥ millions)2010

as of November 30,
2011

as of November 30,
2010

12,825(8,383)(9,742)20,803(6,008)(24,040)(5,677)(9,506)18,75628,262

13,07818,756

SHAREHOLDER INFORMATION (As of November 30, 2011)
Number of Shares Issued: 249,193,436
Number of Shareholders:
30,441
Major Shareholders(top five): Note: Shareholding ratio is calculated after subtracting treasury stock (573,000 shares).
Number of shares Shareholding ratio
held (thousand)(%)

Shareholders

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

17,17013,24813,182
12,65011,888

6.91
5.33
5.30
5.09
4.78

Breakdown of Shareholders
ForeignInvestors
11,870,000
shares
(4.8%)
Individuals
61,878,000
shares(24.9%)
Securities
Companies
5,754,000
shares
(2.3%)DIRECTORS AND AUDITORS (As of February 21, 2012)
President andRepresentative Director

Hiroo Honma

Managing Director

Yukihiko Tanaka
Managing Director

Noriyasu Shiba
Managing Director

Makoto Sasaki

Managing Director

Naoshi Katayama

Stock
Ownership
Associations
35,856,000
shares
(14.4%)
Financial
Institutions
87,970,000
shares(35.4%)
Other JapaneseCorporations
45,292,000
shares (18.2%)

CORPORATE OFFICERS(As of February 21, 2012)Managing Director

Hideo Terakoshi
Managing Director

Keiichi Ogino
Director

Hideo Oba*
Director

Kenji Susukida
Director

Nobuo Segawa

Director

Nishiki Seto
Director

Sachio Tanaka

Standing Corporate Auditor

Hiroshi Yamada
Corporate Auditor

Eiichi Fukushima*

DirectorStanding Corporate Auditor
Standing Corporate Auditor

Corporate Officer

Corporate Officer

Isao Hori

Kazuhito Yoshida
Corporate Officer

Naoto Nakano

Katsumi Nishijima*Outside director or outside
corporate auditor.

Corporate Officer

Yasuo Hatakeyama

Kiyoshi Meguro
Corporate Officer

Masayuki Kobayashi

Atsushi Saguchi*

Corporate Officer

Toshio Sugiura

Corporate Officer

Shinichi Urata

Corporate Officer

Yusaburo Nomura
Corporate Officer

Satoshi Hamamoto
Corporate Officer

Hidenori Hayashi

CORPORATE INFORMATION (As of November 30, 2011)
Foundation:
Capital:Number of Employees:
Major Products:
Machining
RobotsComponents
Materials & Heat Treatment
Major Domestic Offices and Plants:
Toyama Head Office
Tokyo Head Office

December 21, 1928
¥16 billion
2,605 (Group employees 5,645)
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

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]

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

NACHI AMERICA INC. NACHI EUROPE GmbH (Germany)
NACHI (SHANGHAI) CO., LTD.

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

NACHI SINGAPORE PRIVATE LIMITED6

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:

Notice1)The Chuo Mitsui Trust and Banking Company, Ltd., thiscompany’s shareholders’ register custodian, will merge
with the Sumitomo Trust and Banking Co., Ltd. and the
Chuo Mitsui Asset Trust and Banking Company, Ltd. asof April 1, 2012 pending approval and authorizationfrom the relevant authorities and become the “Sumitomo Mitsui Trust Bank, Limited.” The actual executionof its custodian duties will begin on April 2 (Mon), 2012
since April 1 (Sun), 2012 is a holiday for the shareholders’ register custodian.

Shareholders’
1-4-1 Marunouchi, Chiyoda-ku,
Register Custodian/ Tokyo
Administrator for Sumitomo Mitsui Trust Bank, Ltd.
Special Accounts:
Mailing Address/
Phone Inquiries:

Sumitomo Mitsui Trust Bank, Ltd.
Stock Transfer Agency Department(There is no change in the address
and phone number.)2)Agency operations by Japan Securities Agents, Ltd. shallbe terminated as of the end of March 2012.

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 industrial robot, featured prominently
on automobile production lines and elsewhere.
The robot welds automobile bodies with a spot welding
gun mounted at its tip.
Lighter, harder, and faster, the robot helps to dramaticallyreduce process cycle time.
The slim and dynamic body is the outcome of the search for
perfection in functionality, components, and control.
Technology pushed to its limits becomes art.
NACHI-FUJIKOSHI endeavors to create art
in the world of manufacturing.