Consolidated Financial Statements for the Fiscal Year Ended March 31, 2012 (Based on J-GAAP)May 15, 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 Annual General Meeting of Shareholders: June 22, 2012
Scheduled Commencement Date of Dividend Payout: June 25, 2012
Scheduled date of filing Annual Securities Report: June 22, 2012
Financial Results Presentation Materials: Yes
Explanatory Meeting on Financial Results for FY ended March 31, 2012 : Yes (For Institutional Investors and Analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2012 (April 1, 2011 – March 31, 2012)(1) Consolidated results of operations (full-year)(Percentages represent year-over-year changes)
Net sales
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen%
Million yen%
FY 201231,83254.0
251(58.3)
266(54.4)
1,356
49.4
FY 2011
20,675
—
602
—
584
—
907
—
(Note) Comprehensive income (million yen): FY 2012: 1,154 (32.7%)
FY 2011: 870 (—%)
Diluted net income per
share
yen
yen
13,552.23
12,741.57
9,119.08
8,599.09
Equity in earnings of affiliates (million yen):

Ratio of ordinary income
to total assets
%
%
49.4
2.0
42.3
7.9
FY2012: —FY2011: —Net income per share

FY 2012FY 2011(Reference)

Return on equity

Ratio of operating
income to net sales
%
0.8
2.9

(Note 1) Consolidated financial statements were first prepared previous consolidated fiscal year. Changes compared with the fiscal year 2010 are therefore not stated.
(Note 2) Return on equity and ratio of ordinary income to total assets for the fiscal year ended March 31, 2011 are calculated using shareholder’s equity and total assets at the end of
period.

(2) Consolidated financial position
Total assets
Million yen
FY 201218,709FY 2011
7,362(Reference) Shareholders’ equity (million yen):

Net assets
Million yen
5,839
2,169
FY 2012: 3,343

Equity ratio

Net assets per share

%
17.9
29.2
FY 2011: 2,147(3) Consolidated cash flow position
Cash flows from operating Cash flows from investing Cash flows from financing
activities
activities
activities
Million yen
Million yen
Million yen
FY 2012596
667
949
FY 2011
671
(196)
349

Yen
32,707.18
21,571.54

Cash and cash equivalents at end of
periodMillion yen
3,873
1,712

2. Dividends
1Q-endInterimYen
FY 2011
FY 2012FY 2013(forecasts)

Dividends per share
3Q-endYearendYen

Annual

—
—

Yen
0.00
0.00

—
—

Yen
2,000.00
400.00Yen
2,000.00
400.00—0.00—

300.00300.00

Dividend payout
Dividend on equity
ratio(consolidated)(consolidated)
Million yen
%
%
39
4.4
1.9
40
3.0
1.5

Total dividends(annual)

6.5

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
1H (six months)
Full year

Million yen
19,00045,000

%
72.6
41.4

Operating income

Ordinary income

Million yen
360
1,000

Million yen
415
1,050

%
141.1
297.5

%
394.1
294.3

Net income
Million yen
190500

Net income per
share
%
Yen
(85.1)
1,758.36(63.1)
4,627.27

4. Others(1) Changes in significant subsidiaries during the fiscal year under review(changes in subsidiaries accompanying change in the scope of consolidation): Yes
New: 6 (Company name: TKR Corporation, Tohoku TKR Corporation, TKR MANUFACTURING(MALAYSIA) SDN. BHD., TKR PRECISION (MALAYSIA) SDN. BHD., TKR
HONG KONG LIMITED, TKR HUANAN ELECTRONICS (DONG GUAN) CO.,LTD.
Excluded: None (Company name:)(2) Changes in accounting principles, procedures and method of presentation
1) Changes caused by revision of accounting standards: Yes
2) Other changes:
None3) Changes in accounting estimates:
None4) Retroactive restatement:Yes(3) 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

FY 2012

108,055 shares

FY 2011

108,055 shares

FY 20125,815 shares

FY 20118,515 shares

FY 2012

100,074 shares

FY 2011

99,536 shares(Reference) Non-Consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2012 (April 1, 2011 – March 31, 2012)(1) Non-consolidated results of operations (full-year)(Percentages represent year-over-year changes)
Net sales
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen%
Million yen%
FY 2012
12,902
4.2
236(51.7)
216(54.8)
87(55.9)FY 2011
12,378
10.3
489
108.5
479
108.3
199
(13.3)Net income per share

Diluted net income per shareYen
878.502,003.13

FY 2012FY 2011(2) Non-consolidated financial position
Total assets
Million yen
FY 20126,562
FY 2011
4,255
Reference: Shareholders’ equity (million yen):

Yen
825.95
1,888.91
Net assets
Million yen
1,572
1,498
FY 2012: 1,553

Equity ratio
%
23.7
34.7
FY 2011: 1,476

Net assets per share
Yen
15,195.13
14,834.13

2. Forecasts for the Fiscal Year Ending March 31, 2013 (April 1, 2012 – March 31, 2013)

1H (six months)
Full year

Net sales
Million yen
7,000
15,000

%
12.8
16.3

Ordinary income
Million yen
%
130
(1.2)
480
121.3

(Percentages represent year-over-year changes)
Net income
Net income per share
Million yen
%
Yen
70
6.1
647.82250
184.4
2,313.64* Implementation of audit proceduresThis summary of financial statements is not subject to audit procedures pursuant to the Financial Instruments and Exchange Act. At the time of
disclosure of this summary of financial statements, the audit procedures of financial statements pursuant to the FIEA are not 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 based on 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 “Analysis regarding results of operations” on page 2 of the Attachment to the summary of consolidated financial
statement.
(How to obtain Financial Results Presentation Materials)
Explanatory meeting for institutional investors and analysts is scheduled to be held on May 21, 2012. Financial results presentation materials
are published on the same day on TDnet.
(Stock split)
On April 1, 2011, the Company instituted a 5-for-1 stock split of common shares. The net income per share and diluted net income per share
are calculated assuming that the stock split was carried out the beginning of the previous consolidated fiscal year.

Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2012
(Based on J-GAAP)

1. Results of Operations(1) Analysis regarding results of operations
During the consolidated fiscal year under review, global economy remained unable to completely dispel the concerns of national
default risks in European region such as in Greece. The extent of economic damage brought about by the debt issues in Europe isstill unclear, and it is difficult to deny the possibility that the debt issues in Europe may lead to an economic crisis worse than the
Lehman shock.
Meanwhile, Japanese economy has experienced a worst trade deficit in history due to a decrease in imports because of the Great
East Japan Earthquake and strong yen, as well as increased crude oil import due to operation suspension of nuclear power plants.
Future of Japanese economy remains unclear; Japan’s GDP has fallen behind China, it has been unable to find a way to departfrom the deflationary economy, and aging society combined with falling population adds to the burden of social security cost on
national finances. In addition to the uncertainties toward European economic crisis, manufacturing industry, which is Japan’s key
industry, struggles from so-called sixfold difficulty which includes strong yen, high corporate tax rates, and delay in tradeliberalization, and is destined to transition into increasingly severe business environment.
Under these conditions, order situation in some part of our industry shows a recovery trend as production at manufacturers
regains calmness after the turmoil from the Great East Japan Earthquake. However, impacts from last year’s natural disasters
have provided manufacturers an opportunity to review their production system in a medium- and long-term standpoint. Somemanufacturers have started considering overseas transfer at a speed far beyond the industry expectation. Moreover, although themarket volume is in balanced contraction, recruitment continues to be an issue, and even leading manufacturers with competitive
advantage have a difficulty securing enough employees to satisfy their clients’ demand. Therefore, costs for securing humanresources such as recruitment cost are on the rise.
Occasioned by these circumstances, nms Group (the Company and its consolidated subsidiaries) has formulated a new 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:- IS operations: Raise the competitive strength of the Group’s core business, and develop overseas market- MS operations: Pursue high-margined business models, expand domestic operations, and make preparations to enter overseas
market- GE operations: Pursue synergies between operations, recognizing that such operations are indispensable for the “neo EMS”
- EMS operations: Aim for greater group manufacturing prowess and re-establish a business platform for domestic and overseas
operations
The Great East Japan Earthquake and Thailand floods, both occurring during the consolidated fiscal year under review, have
impacted the Group’s earnings to a large extent. The Group has been seeking to expand group manufacturing bases both
domestically and internationally and results for TKR Corporation ("TKR Group") along with the SHIMA Electronic Industry Co.,
Ltd. (“SHIMA Group”) were more notably impacted than expected. In spite of this, downturn in results was minimized, as theGroup has frequently been nominated as a service provider by Group clients whose production shifted into higher gear after thenatural disasters.
As a result, in the consolidated fiscal year under review, sales revenue increased 54.0 percent on the year to 31,832 million yen,
but operating income declined 58.3 percent to 251 million yen and ordinary income fell 54.4 percent to 266 million yen. Net
income for the period totaled 1,356 million yen (+49.4 % on the year).
Segment results developed as follows.
[1] Inline Solutions (IS) operations
The Group’s manufacturing clients had been gradually recovering from the tremendous damages from the Great East Japan
Earthquake, steadily rebuilding production systems such as repairing physical damage to plant and equipment, restructuring
supply chains, and adjusting production operations to deal with electric power shortages. In addition, in an effort to minimize
the damages from Thailand floods that occurred during the third quarter of consolidated fiscal year under review, themanufacturers have reached a situation urging them to form supply chains from global perspective and to establish
internationally diversified manufacturing bases in a mid-and-long term standpoint.
Under these circumstances, domestic IS operations are recovering smoothly while minimizing the impact of the earthquake,based on trust and reputation earned from manufacturing clients. As a result, enrollment has reached its highest since theLehman Brothers’ fall. This is attributed to the Group’s competitive advantage in manufacturing, which was highly evaluatedin comparison to competitors because the Group owns in-house factories where it is able to promote contracting services, aswell as EMS subsidiaries that offer services such as substrate mounting and product assembly in Japan and overseas.
On the other hand, 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, has enabled it to achieve perfect discrimination, and aggressive sales and marketing activities were
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Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2012
(Based on J-GAAP)

promoted in China and Vietnam respectively in full cooperation with Beijing Zhongji Zhonghe International Technical
Services Ltd. (“Zhongji Zhonghe”) and nms International Vietnam Company Limited. (“nms Vietnam”). This has led Zhongji
Zhonghe to launch a main office in Beijing along with two branch offices (in Wuxi and Shenzhen) already, and is now in fulloperation.
Based on the foregoing, for the consolidated fiscal year under review, the Group reported revenues of 9,352 million yen(+9.8 % on the year) with operating income of 901 million yen (-0.1 % on the year).
[2] Manufacturing Solution (MS) operations
With regard to MS operations (changed to “CS operations” since April 1, 2012), although there were impacts of theearthquake including physical damage to buildings, in May the Group was quick to implement transfers of operating bases
including the transfer of Iwate Factory, the main base, and worked toward a speedy resumption of operations. The result has
been better than expected, as performance in June recovered almost to the level before the earthquake. Meanwhile, however,there was no development of major new business with a potential of becoming a future pillar. In the consolidated fiscal year
under review, MS operations has pursued to further advance from the existing contracting business form, and has worked to
expand business by launching field services area which provides visit repair services, resulting in increased number ofmanufacturing clients and wider product range. Looking ahead, MS operations’ mission has been redefined so that theconcept of the operations covers not only the repair operations but also the customer service operations as a whole.
Moreover, in a manner similar to IS operations, MS operations also further strengthened the cooperation with Zhongji
Zhonghe who offers overseas human resource business, along with nms Vietnam, TKR Group who offers EMS operations,and SHIMA Group. 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.
As a result, the Group reported revenues of 2,903 million yen (−8.5 % on the year) with operating income of 477 million yen(−4.2 % on the year).
[3] Global Engineering (GE) operations
GE operations in the consolidated fiscal year under review, while maintaining domestic engineer dispatch services as a key
operation, experienced a difficulty in securing engineers in the market for Japanese engineers dispatch, which nms viewed asa business opportunity; working more closely with Beijing Rihua Caichuang International Technical Services Ltd. andZhongji 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
the creation of new contract-base design business by cooperating with TKR Group and SHIMA 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 627 million yen (−8.9 % on the year) with operating income of 56 million yen(+5.8 % on the year).
[4] Electronics Manufacturing Service (EMS) operations
EMS operations has developed its operations as a business centered on SHIMA Electronic Industry Co., Ltd, which joined theGroup in July 2010, and its subsidiaries in Hong Kong and Malaysia and the China based manufacturing service plant thatcaters to the Hong Kong subsidiary. In addition, due to the management integration of TKR Corporation by purchasing morethan half of its shares in July 2011, nms constructed the framework to promote EMS operations with SHIMA Group and TKRGroup.
Results for the consolidated fiscal year under review declined most strongly among the Group’s operations due to the direct
effects from disrupted global components procurement after the Great East Japan earthquake. Additionally, the massive
flooding in Thailand had an enormous impact again on supply chains dependent on Japanese manufacturers for component
procurement, resulting in severe deterioration. In spite of all-out efforts made throughout the period to improve performancethrough cost minimum operations and rigorous reviews implemented with regard to sales, marketing and technology in orderto obtain further synergies between group operations in the future, results for the consolidated fiscal year under review was
weak.
As a result, the Group reported revenues of 18,949 million yen (+128.4 % on the year) with operating income of 14 million
yen (-86.8% on the year).

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Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2012
(Based on J-GAAP)

As for the outlook for the coming fiscal year, the Group will continue to thoroughly pursue its strengths under the “neo EMS”
business strategy concept. As a numerical goal toward achieving the medium term management plan announced in December
2011, the Group forecasts that it will record 45,000 million yen in consolidate net sales, 1,000 million in consolidated
operating income, 1,050 million yen in consolidated ordinary income, and 500 million yen in consolidated net income.
Regarding EMS operations, SHIMA Electronic Industry (H.K) Co., Ltd. of SHIMA Electronic Industry Co., Ltd., asubsidiary, will make a change in accounting period ending in March 2013, and periodic accounting of profit and loss will be
for nine months (April – December).
For the IS operations, the Group will continually strive to precisely ascertain client trends in order to timely meet the needs ofmanufacturers and will actively propose contract manufacturing services making use of its abundant experience in the field.
In order to benefit from the many business opportunities when manufacturing bases are moved overseas from Japan, theGroup will fully launch labor dispatch services (manufacturing staff and engineer dispatch) in China and fully introduce “TheUKEOI (the global shift to contracting)” in Vietnam. By preparing wide-range solution options in Japan and overseas andprecisely meeting client needs, the Group professes to support Japanese manufacturing and to become a strategic partner ofclient manufacturers.
For the CS (formerly MS) operations, the Group will not only reexamine the business model applied to these operations,which have continued to generate sales growth until previous consolidated fiscal year even under difficult conditions, but also
reflect upon insufficiency of new businesses during the consolidated fiscal year under review, and continue to look for new
business opportunities. It is assumed that Japanese manufacturers will further examine moving their production bases locatedin Japan overseas, but the Group is aware that repair operations, which it is particularly strong in, will remain in Japan and,
therefore, will work to steadily expand these operations. In particular, the Group will set winning new projects as a primary
assignment, and will be engaging in aggressive marketing activities. The business has been developed centered on repair
operations where the work is completed at the Group’s bases, but since the consolidated fiscal year under review, the Groupis working to develop infrastructures to set field service (repair service to be done in the field, such as for white appliancesthat consumers cannot send to the Company) as its next business pillar, and will be making efforts to expand its service field.
For the GE operations, the Group will focus on maintaining sales and improving profitability in order to steadily expand thebusiness even without an increase in demand. In particular, efforts will be undertaken to make effective use of businessresources in order to generate greater synergies from the ES and GS operations that were merged previous consolidated fiscal
year. In addition, the Group will review and improve its nms course (educational program for Japanese language andproduction management) which is offered at colleges in China, so that engineer dispatches to manufactures in Japan will
increase. At the same time, the Group will cooperate with Zhongji Zhonghe in China in order to expand engineer dispatches
to Japanese manufacturers.
The EMS operations are centered on SHIMA Group, which joined the Group in the previous consolidated fiscal year, andTKR Group, whose management was integrated during the consolidated fiscal year under review. The strategy for thisbusiness during the next fiscal year is to form collaborations with other operations such as the IS operations (human resourcesbusiness), the core of the “neo EMS” business strategy concept, both domestically and internationally, and to give the greatest
priority to meeting the diverse needs of manufacturers. Particularly in China, the Group is aiming to promote businessintegrations with labor dispatch services (dispatches of manufacturing workers and engineers) promoted by Zhongji Zhonghein Huanan region, where TKR HUANAN ELECTRONICS (DONG GUAN) CO., LTD (Dong Guan EMS plant) of TKRGroup and SHIMA Group’s Shenzhen plant for processing and assembling with supplied materials are located, in order for an
early launch of “neo EMS” business model. In addition, the Group will aspire to increase orders from client manufacturers in
the IS operations, CS (formerly MS) operations, and GE operations both domestically and internationally, and will develop abusiness strategy to maximize inter-operational synergies at the Group level and vigorously undertake both sales andtechnology related activities.
(2) Analysis concerning financial position

1) Assets, liabilities and net assets
Consolidated assets at the end of the fiscal year under review increased 11,347 million yen compared with the end of theprior consolidated fiscal year to 18,709 million yen. This was mainly due to the management integration of TKRCorporation by purchasing more than half of its shares in July 2011.
Current assets increased 6,528 million yen compared with the end of the prior consolidated fiscal year to 13,036 million
yen. This was due to trade notes and accounts receivable, and cash and deposits, which increased 2,598 million yen and
2,519 million yen, respectively.
Fixed assets increased 4,818 million yen compared with the end of the prior consolidated fiscal year to 5,672 million yen.
This was due to property, plant, and equipment, and investments and other assets, which increased 3,608 million yen and912 million yen, respectively.
Consolidated liabilities increased 7,677 million yen compared with the end of the prior consolidated fiscal year to 12,870
million yen.
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Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2012
(Based on J-GAAP)

Current liabilities increased 5,996 million yen compared to the end of the prior consolidated fiscal year to 10,229 million
yen. This was due to short-term loans payable, and trade notes and accounts payable, which increased 3,534 million yen
and 1,753 million yen, respectively.
Long-term liabilities increased 1,680 million yen compared with the end of the prior consolidated fiscal year to 2,640
million yen. This was due to long-term loans and accrued employees’ retirement benefits, which increased 872 million
yen and 461 million yen, respectively.
Consolidated net assets increased 3,670 million yen compared with the end of the prior consolidated fiscal year to 5,839
million yen. This is due to retained earnings and minority shareholder's interest, which increased 1,316 million yen and
2,476 million yen, respectively.

2) Cash flows
Consolidated cash and cash equivalents and the end of the consolidated fiscal year under review increased 2,160 million
yen compared with the end of the prior consolidated fiscal year and totaled 3,873 million yen.
Net cash provided by operating activities was a 596 million yen (-11.1% on the year). Main factors were a 1,441 million
yen in net income before income taxes (+36.0% on the year) and a 1,140 million yen in goodwill expenses (+92.7% on theyear).
Net cash provided in investing activities was a 667 million yen (Cash used in investing activities totaled 196 million yen
at the same period in the previous year). Main factors were a 517 million yen in income from the acquisition of subsidiarystocks due to a change in the scope of consolidation (compared to a 498 million yen in expense at the same period in theprevious year), a 382 million yen in income from the repayment of time deposits (+30.7% on the year) and a 164 million
yen in expense from acquisition of tangible fixed assets (+398.7% on the year).
Net cash provided by financing activities was a 949 million yen (+171.7% on the year). Main factors were a 1,846 million
yen in net increase from short-term loans (compared to an 831 million yen in net repayment in the same period in theprevious year) and a 711 million in repayment of long-term loans (+239.0% on the year).
(Reference) Cash flow related indicators

FY 2011
FY 2012
Shareholders’ equity ratio (%)
29.2
Shareholders’ equity ratio based on market prices (%)
106.4
Interest-bearing debt to cash flow ratio (%)
2.5
Interest coverage ratio (times)
55.7
Shareholders’ equity ratio: Shareholders’ equity / Total assets
Shareholders’ equity ratio based on market prices: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest paid
(Notes) 1. Indicators are calculated using consolidated financial figures.
2. Market capitalization is calculated using the total number of issued shares minus treasury shares.

17.9
25.6
10.6
10.4

3. Cash flow refers to cash flow from operating activities.
4. Interest-bearing debt refers to all liabilities appearing on the balance sheet that interest is paid on. Interest paid
appearing in the statement of cash flows is used as interest paid.
5. Since fiscal year 2011 is the first fiscal year that consolidated financial statements have been created, cash flow
indicators for fiscal year 2010 and earlier are not given.

(3) Basic profit allocation policy, and dividends in the current and next fiscal years
The Group is aware that providing shareholders a return on their investment is an important business mission but also thinks that
it is vital to maintain sufficient internal reserves in preparation for developing a business strategy in order to realize long-term
corporate growth. The Group has a basic dividend policy of paying dividends while giving consideration to balancing
shareholders’ return and internal reserves. In addition, dividends are not the only way to provide shareholders with a return;another method is to conduct share buyback.
In accordance with the basic dividend policy given above, the Group set a medium-term target of generating a total shareholder
return of 20% through dividends and share buybacks and initially promised a year-end dividend of 300 yen per share. After that,taking into consideration the consolidation of TKR Corporation which resulted in a significant expansion in business scale, theGroup decided on a commemorative dividend and announced that it had revised its forecast for the year-end dividend to 400 yen
per share.
As for the dividend for the next fiscal year, the Group is comprehensively examining shareholder return, which includes several
elements including dividend and share buybacks, and is aiming to achieve its medium-term goal of a total shareholder return of
20% as we aimed to achieve this fiscal year.
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