Consolidated Financial Statements for the First Half of Fiscal Year Ending March 31, 2013
(Six Months Ended September 30, 2012) (Based on J-GAAP)
November 14, 2012
Company Name : Nippon Manufacturing Service Corporation.
Listing : JASDAQ (Osaka Securities Exchange)
Stock Code: 2162
URL : http://www.n-ms.co.jp/
Representative: Fumiaki Ono,
President and CEO
Contact: Norihiko Suehiro, Director and CFO
Tel: +81-3-5333-1711
Scheduled Date of Filing Quarterly Securities Report: November 14, 2012
Scheduled Commencement Date of Dividend Payout: —First Half Financial Results Presentation Materials: Yes
Explanatory Meeting on First Half Financial Results: Yes (For Institutional Investors and Analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2013 (April 1, 2012 – September 30, 2012)(1) Consolidated results of operations (six months)(Percentages represent year-over-year changes)
Net sales
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen% Million yen%
19,438
76.6
471
215.9
461
449.0
200
(84.3)
1H FY 2013
11,00622.5
149(46.0)
83(68.3)
1,273
66.5
1H FY 2012
(Note) Comprehensive income (million yen): 1H FY 2013: 344 (-70.9%)
1H FY 2012: 1,184 (62.1%)
Net income per share

Diluted net income per share

Yen
1,961.27
12,796.05

1H FY 2013
1H FY 2012

Yen
1,884.79
11,951.19(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen
1H FY 2013
19,342
6,144
FY 201218,7095,839
Reference: Shareholders’ equity (million yen): 1H FY 2013: 3,473
FY 2012: 3,343

%
18.0
17.9

2. Dividends
1Q-endInterimYen

FY 2012FY 2013
FY 2013(forecasts)

Yen
0.00
0.00

—
—

Annual dividends
3Q-endYen—

0.00

Yearend—AnnualYen
400.00Yen
400.00300.00300.00Note: Revision of the latest released dividend forecast: None

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2013 (April 1, 2012 – March 31, 2013)(Percentages represent year-over-year changes)

Net sales
Full year

Million yen
45,000%41.4

Operating income

Ordinary income

Million yen
1,000Million yen
1,050

%
297.5

Note: Revision of the latest released business performance forecast: None

%
294.3

Net income
Million yen
500

Net income per
share
%
Yen
(63.1)
4,627.27

4. Others(1) Changes in significant subsidiaries during the consolidated cumulative period (six months) under review(changes in subsidiaries accompanying change in the scope of consolidation): None
New:
None (Company name:)
Excluded: None (Company name:)(2) Application of accounting procedures specific to creation of quarterly consolidated financial statements: Yes(Note)For details, refer to "2. Summary (Other) Information: (2) Application of accounting procedures specific to creation of quarterly
consolidated financial statements on page 4 of the Attachment.

(3) Change of accounting policies; change and/or restatement of accounting estimates
1) Change of accounting policies caused by revision of accounting standards:
2) Change of accounting policies other than stated in (1):3) Change of accounting estimates:
4) Retroactive restatement:

Yes
None
Yes
None

(Note)For details, refer to "2. Summary (Other) Information: (3) Change of accounting policies; change and/or restatement of accounting
estimates" on page 5 of the Attachment.

(4) Number of shares issued and outstanding (shares of common stock)1) Number of shares outstanding (including
treasury stock) at end of period
2) Number of treasury stock at end of period
3) Average number of shares outstanding
during the period

1H FY 2013

108,055 shares

FY 2012

108,055 shares

1H FY 2013

5,815 shares

FY 20125,815 shares

1H FY 2013

102,240 shares

1H FY 2012

99,543 shares* Implementation of quarterly review proceduresThis summary of quarterly financial statements is not subject to quarterly review procedures pursuant to the Financial
Instruments and Exchange Act. At the time of disclosure of this summary of quarterly financial statements, the review
procedures of quarterly financial statements pursuant to the FIEA were completed.
* Cautionary statement with respect to forward-looking statements
The forward-looking statements such as the forecasts for the business performance described in this document are basedon the judgments made by the Company in accordance with information currently available that is rational. For this reason,
actual results may differ from these forecasts due to a number of factors, including but not limited to the operating
environment. For the underlying assumptions and usage of earnings projections refer to the disclaimer in “(3) Qualitative
information concerning business performance forecast” under “1. Qualitative Information Concerning Financial Results of
the Quarter under Review” on page 4 of the Attachment.
(How to obtain Quarterly Financial Results Presentation Materials)
Quarterly financial results presentation materials are published on the same day on TDnet.

Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for First Half of Fiscal Year Ending March 31, 2013
(Six Months Ended September 30, 2012) (Based on J-GAAP)

1. Qualitative Information Concerning Financial Results of the Quarter under Review

Forward-looking information included in the text reflects the judgment of the nms Group (the Company and consolidated
subsidiaries) as of the end of the consolidated quarter under review.

(1) Qualitative information concerning consolidated operating results
In the period under review, the world economy is yet to grasp the trend of sovereign risks in Europe, while China, which has
been the driving force for world economy for the past several years, is experiencing slower economic growth, and the UnitedStates is still unable to turn around its economy toward recovery. Under these circumstances, world economy is feared toexperience unforeseeable damage in case the European debt crisis does become a reality.
Meanwhile, with regard to Japanese economy, territorial disputes with neighboring countries have become a concern. Especially,anti-Japanese demonstrations in China such as boycott of Japanese products, originating from nationalization of the Senkaku
Islands in Okinawa inflicted a serious blow to the export industry, including manufacturers. Furthermore, domestic economy isstill unable to halt its increasing debt or to find a way to depart from the deflationary economy, resulting in a stronger sense ofstagnation. Thus, Japanese economy in the period under review struggles from the uncertainties toward European economiccrisis as well as concern for decrease in exports to China, and manufacturing industry, which is Japan’s key industry,
significantly lacks global competitiveness in a harsh business environment such as strong yen.
Under these conditions, many manufactures in our industry are downscaling their domestic production bases and shifting themoverseas, making it more difficult to maintain and expand business as in the past. Great East Japan Earthquake and massive
flooding in Thailand last year urged manufactures to review their procurement, production and supply structures from BCP pointof view, and manufacturers began restructuring their production bases at a speed far beyond the industry expectation. In addition,
more manufactures are requesting to reduce their cost in domestic production, forcing our industry to control cost per hire,affecting considerably in recruiting activities and securing profitability. Additionally, increased anti-Japan sentiments in China
are expected to affect exports to China and manufacturing activity in China.
Occasioned by these developments, nms Group (the Company and its consolidated subsidiaries) has formulated a businessstrategy concept (“neo EMS”) under which the Group will promote business initiatives that address key issues of the Group’s
individual operations. The Group has been successful to a certain degree in regard to these efforts. Specific measures include thefollowing:- Inline Solutions (IS) operations: Raise the domestic competitive strength of the Group’s core business, and develop overseas
market- Customer Service (CS) operations: Pursue high-margined business models, expand domestic operations, and make preparations
to enter overseas market- Global Engineering (GE) operations: Pursue synergies between operations, recognizing that such operations are indispensablefor “neo EMS”
- Electronics Manufacturing Service (EMS) operations: Aim for greater group manufacturing prowess and re-establish a businessplatform for domestic and overseas operations
In the period under review, business environment was severe for nms Group who operates manufacturing outsourcing services
under “neo EMS” business strategy concept described above. Nevertheless, the Group was able to record strong results by
pursuing operational synergy between business segments.
As a result, consolidated sales for the first half increased 76.6% to 19,438 million yen, with operating income of 471 million yen(+215.9% on the year), ordinary income of 461 million yen (+449.0% on the year), and net income of 200 million yen (-84.3%
on the year).
Segment results developed as follows.
Note that from the first consolidated quarter, changes have been made in calculation of profit or loss of reportable segments. As
regards the comparisons made with the same quarter of the previous year that appear in the following financial result summaries
for each segment, the figures for the previous year have been reclassified to take account of the new segment decisions so as toenable direct comparison.
[1] Inline Solutions (IS) operations
Japanese manufacturers are restructuring their base strategies according to manufacturing functions from global perspective,
taking into account lessons learned from Great East Japan Earthquake and massive flooding in Thailand last year. All
manufacturing processes including material procurement activity, production activity (substrate mounting and productassembly), and supply activity are being reviewed strategically. The Group’s manufacturing clients are looking ahead to what
each place of procurement, production, and consumption should be, and are advocating establishment of internationallydiversified production bases through comprehensive consideration for severe business environment including strong yen, as wellas underlying country risks throughout the world such as in China.
-2 -Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for First Half of Fiscal Year Ending March 31, 2013
(Six Months Ended September 30, 2012) (Based on J-GAAP)

Under these circumstances, for the period under review, domestic IS operations gained a high reputation from clients because incomparison to other companies, the Group possesses: overwhelmingly broad range of solution menus available in “neo EMS”
business development; an advantage in contract manufacturing thanks to its consistent commitment to manufacturing; and an
ability to make global proposals including overseas production, by having multiple overseas bases for EMS operations andoverseas staff dispatch. As a result of foregoing combined with aggressive marketing, enrollment has reached its highest since
the Lehman Brothers’ fall, continuing from the first consolidated quarter.
For manufacturing clients considering production transfer to overseas, the Group’s ability to offer services such as overseas
manufacturing outsourcing and contract manufacturing, not to mention the ability to meet the domestic outsourcing needs, hasenabled the Group to achieve perfect discrimination, and aggressive sales and marketing activities were promoted in China andVietnam respectively in full cooperation with Beijing Zhongji Zhonghe International Technical Services Ltd. (“Zhongji
Zhonghe”) and nms International Vietnam Company Limited. (“nms Vietnam”). At Zhongji Zhonghe, anti-Japanesedemonstrations originating from the Senkaku Islands issues made the Group to face another difficulty of operating business in
China. Nevertheless, Japanese-affiliated manufacturers have shown increased interest in high value-added manufacturing staff
dispatch and contract business offered by the Group, and while recognizing the risks for business environment, the Group is also
sensing great business opportunities.
Based on the foregoing, the Group reported revenues of 4,936 million yen (+12.0% on the year) with segment profit of 2 million
yen (-93.9% on the year).
[2] Customer Service (CS) operations
CS operations, despite of its small business size, is a unique and highly profitable business model not present with other humanresources companies, creating a differentiator in the industry. Especially in the Group’s “neo EMS” business development,
in-house factories serve multiple purposes as bases for CS operations, bases for adjusting supply and demand of humanresources, educational facilities to improve add-on values of human resources, and mother factories to the client bases that are
scattered as satellites. In-house factories have been proceeding with distribution of function with factories under EMS operations(SHIMA Group and TKR Group) which has become a Group subsidiary, and the Group is currently making a concerted effort topromote “neo EMS” strategy.
With such an important mission with regards to “neo EMS” strategy development, though, there has been no major developmentof new business in the period under review, and in today’s severe business environment, even the main repair business forhome-use video game equipment and mobile phones has been unable to secure growth as in the past. Nonetheless, with regard tofield services business which provides visit repair services, its launch has been smoothly underway since last period, and a neworganization for field service business was added to an existing organization for contracting business, resulting in a system
restructuring for promoting CS operations.
Also in the period under review, continuing from the previous period, CS operations further strengthened the cooperation with
Zhongji Zhonghe who offers overseas human resource business, and nms Vietnam, along with SHIMA Group and TKR Group
who offer EMS operations. In order to seek business opportunity potentials overseas, a feasibility study which includes
marketing review as well as business model review has been under way.
Based on the foregoing, the Group reported revenues of 1,258 million yen (-15.6% on the year) with segment profit of 56
million yen (-45.0% on the year).
[3] Global Engineering (GE) operations
In the period under review, continuing from the previous period, GE operations mainly focused on domestic engineer dispatch
services as a key operation. While experiencing a difficulty in securing Japanese engineers in the engineer dispatch market, nms
viewed it as a business opportunity; working more closely with Beijing Rihua Caichuang International Technical Services Ltd.
and Zhongji Zhonghe, two local affiliates in China, nms made further improvements to the Group’s unique business model ofdispatching Chinese engineers to Japanese manufacturers in China and met the needs of its clients.
In addition, GE operations has been practicing its business development as “neo EMS”, meaning that it has been focusing on thecreation of new contract-base design business by cooperating with SHIMA Group and TKR Group, which had been turned into
subsidiaries and offer EMS operations, while at the same time dispatching engineers from TKR Group and SHIMA Group to
meet the demand within the nms Group as production fluctuated.
As a result, the Group reported revenues of 313 million yen (+1.7 % on the year) with segment profit of 3 million yen(corresponding period in the previous year had segment loss of 3 million yen).
[4] Electronics Manufacturing Service (EMS) operations
EMS operations develops its business with SHIMA Group and TKR Group as its parent organization.
-3 -Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for First Half of Fiscal Year Ending March 31, 2013
(Six Months Ended September 30, 2012) (Based on J-GAAP)In the period under review, the goal of EMS operations was to display business synergy with the Group’s IS, CS and GE
operations and to more powerfully promote “neo EMS”. A cross-sectional sales strategy organization, which was set up in April
2012 in order to vigorously promote sales toward key accounts by head office, has proved effective and the Group is able to gain
new orders. The Group is beginning to receive orders that extends to multiple operations, and EMS operations is starting to playa certain role as a mother factory for “neo EMS” within the Group, along with in-house factories, bases of CS operations. EMS
operation is gathering momentum to share important parts of Hitozukuri (employee development) and Monozukuri functions in“neo EMS” development.
EMS operations centers itself overseas rather than in Japan and is an essential business to the Group, who offers a broad rangeof solutions to various outsourcing needs of manufacturing clients, including overseas shift of domestic production bases. Albeit
minor, anti-Japanese demonstrations in China that occurred in the period under review did have an effect on EMS operations,which left the Group no choice but to recognize China’s country risks. Nevertheless, the Group also realized that developing
business as “neo EMS” in coalition with Zhongji Zhonghe enables the Group to meet the needs of Japanese-affiliatedmanufacturers that are moving into China.
As a result, the Group reported revenues of 12,929 million yen (+169.4 % on the year) with segment profit of 408 million yen(+5,182.8% on the year). Note that TKR Group was turned into subsidiary in July 2011. For comparison of corresponding period
in the previous year, financial results of TKR Group are not included in the prior consolidated cumulative period as the financial
results of TKR Group include the results before the date of acquisition.
Note that SHIMA Electronic Industry Co., Ltd and SHIMA Electronic Industry (H.K) Co., Ltd. have changed account closing
date from March 31 to December 31, and their results for the first quarter are reported in the beginning balance of retained
earnings. Results for the two companies, therefore, are not included in the consolidated results of operations for the first half.
(2) Qualitative information concerning financial position
Consolidated assets at the end of the period under review increased 632 million yen compared with the end of the prior fiscal
year to 19,342 million yen.
Current assets increased 727 million yen compared with the end of the prior fiscal year to 13,764 million yen. This was due totrade notes and accounts receivable, which increased 1,043 million yen, and marketable securities, which decreased 326 million
yen.
Fixed assets decreased 94 million yen compared with the end of the prior fiscal year to 5,578 million yen. This was due tointangible assets, which increased 150 million yen, and tangible assets and investments and other assets, which decreased 128
million yen and 116 million yen, respectively.
Consolidated liabilities increased 327 million yen compared with the end of the prior fiscal year to 13,197 million yen.
Current liabilities increased 954 million yen compared with the end of the prior fiscal year to 11,184 million yen. This was due
to trade notes and accounts payable and short-term loans payable, which increased 360 million yen and 428 million yen,respectively.
Long-term liabilities decreased 626 million yen compared with the end of the prior fiscal year to 2,013 million yen. This wasdue to long-term loans, which decreased 532 million yen.
Consolidated net assets increased 305 million yen compared with the end of the prior fiscal year to 6,144 million yen. This wasdue to retained earnings and minority shareholder's interest, which increased 159 million yen and 174 million yen, respectively.
(Cash flow)
Consolidated net cash and cash equivalents ("Cash") at the end of the period under review totaled 3,968 million yen (4,095
million yen at the same period in the previous year).
Cash flows and relevant factors in the period under review are as follows:[Cash flows from operating activities]
Cash provided in operating activities totaled 230 million yen (Cash used by operating activities totaled 295 million yen at thesame period in the previous year). Main factors were a 1,075 million yen increase in accounts receivables, a 429 million yen in
net income before taxes, a 247 million yen in depreciation and a 389 million yen increase in accounts payable.
[Cash flows from investing activities]
Cash provided by investing activities totaled 88 million yen (Cash provided in investing activities totaled 462 million yen at
the same period in the previous year). Main factors were a 221 million yen in proceeds from sales of tangible assets and a 171
million yen in payments for purchase of intangible assets.
[Cash flows from financing activities]
Cash used by financing activities totaled 227 million yen (Cash provided by financing activities totaled 2,229 million yen at
the same period in the previous year). Main factors were a 616 million yen in repayment of long-term loans and a 495 million
yen in net increase of short-term loans.
-4 -Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for First Half of Fiscal Year Ending March 31, 2013
(Six Months Ended September 30, 2012) (Based on J-GAAP)(3) Qualitative information concerning business performance forecast
The earning estimates for the consolidated fiscal year ending March 31, 2013 (full year) listed in “Consolidated Financial
Statements for the Fiscal Year Ended March 31, 2012 (Based on J-GAAP)” released on May 15, 2012, remain unchanged.
It should be noted that earnings estimates are based on the information available at the time of release and are subject to revisionin case earnings trends change due to events.

2. Summary (Other) Information(1) Changes in significant subsidiaries during the consolidated cumulative period under review
None.
Note that since the first quarter of the consolidated fiscal year, SHIMA Electronic Industry Co., Ltd and SHIMA Electronic
Industry (H.K) Co., Ltd. have changed account closing date from March 31 to December 31 in order to promote efficiency inoperations. Their results for the first quarter (January 1, 2012 to March 31, 2012) are reported in the beginning balance ofretained earnings.
(2) Application of accounting procedures specific to creation of quarterly consolidated financial statements(Application of accounting procedures specific to creation of quarterly consolidated financial statements)
For some of its consolidated subsidiaries, the effective tax rate expected to be imposed on pretax net income of the consolidated
fiscal year including the current period under review was estimated based on reasonable assumptions. Then, tax expenses for thecurrent period under review were calculated by multiplying the pretax net income for the quarter by the estimated effective tax
rate.
(3) Change of accounting policies; change and/or restatement of accounting estimates
Change of accounting policies(Change of depreciation method)
In accordance with the amendment of the Corporation Tax Law, effective from the consolidated first quarter of fiscal year
ending March 31, 2013, nms and its domestic consolidated subsidiaries have changed their depreciation method for those
property and equipment acquired on or after April 1, 2012.
The impact of this change on operating income, ordinary income and net income before income taxes and minority interests is
not significant compared to the former method.

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