Consolidated Financial Statements for the Fiscal Year Ended March 31, 2011 (Based on J-GAAP)May 13, 2011
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 28, 2011
Scheduled Commencement Date of Dividend Payout: June 29, 2011
Scheduled date of filing Annual Securities Report: June 28, 2011
Financial Results Presentation Materials: Yes
Explanatory Meeting on Financial Results for FY ended March 31, 2011 : 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, 2011 (April 1, 2010 – March 31, 2011)(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 2011
20,675
—
602
—
584
—
907
—
FY 2010
—
—
—
—
—
—
—
—
(Note) Comprehensive income (million yen): FY 2011: 870 (—%) FY 2010: — (—%)
Ratio of ordinary income
to total assets
%
%
42.3
7.9
—
—
FY2011: —FY2010: —Diluted net income per
share
yen
yen
45,595.87
42,997.49——
Equity in earnings of affiliates (million yen):

Return on equity

Net income per share

FY 2011
FY 2010(Reference)%

Ratio of operating
income to net sales

%
2.9

—

(Note 1) Since this fiscal year is the first fiscal year that consolidated financial statements have been created, figures for the fiscal year ended March 31, 2010 and changes compared withthe fiscal year 2010 are not stated.
(Note 2) Return on equity and ratio of ordinary income to total assets are calculated using shareholder’s equity and total assets at the end of period.

(2) Consolidated financial position
Total assets
Million yen
FY 20117,362
FY 2010—(Reference) Shareholders’ equity (million yen):

Net assets
Million yen
2,169—
FY 2011: 2,147

Equity ratio—
FY 2010: —%29.2

Net assets per share—

Yen
107,857.71(Note) Since this fiscal year is the first fiscal year that consolidated financial statements have been created, figures for the fiscal year ended March 31, 2010 are not stated.

(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 2011
671
(196)
349
FY 2010———

Cash and cash equivalents at end of
periodMillion yen
1,712—(Note) Since this fiscal year is the first fiscal year that consolidated financial statements have been created, figures for the fiscal year ended March 31, 2010 are not stated.

2. Dividends
1Q-endInterimYen
FY 2010
FY 2011
FY 2012(forecasts)

Dividends per share
3Q-endYearendYen

Annual

—
—

Yen
0.00
0.00

—
—

Yen
500.002,000.00

Yen
500.002,000.00

—

0.00

—

300.00300.00

Dividend payout
Dividend on equity
ratio(consolidated)(consolidated)
Million yen
%
%
9
—
—
39
4.4
1.9

Total dividends(annual)8.1(Note 1) Since this fiscal year is the first fiscal year that consolidated financial statements have been created, figures for the fiscal year ended March 31, 2010 are figures listed in the
non-consolidated financial statements.
(Note 2) Since this fiscal year is the first fiscal year that consolidated financial statements have been created, dividend payout ratio and dividend on equity for the fiscal year ended March
31, 2010 are not stated.

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2012 (April 1, 2011 – March 31, 2012)(Percentages represent year-over-year changes)

Net sales
1H (six months)
Full year

Million yen
11,50024,500

%
28.0
18.5

Operating income

Ordinary income

Million yen
65
650

Million yen
60
630

%
(76.5)
7.8%(77.4)
7.9

Net income
Million yen
15370

Net income per
share
%
Yen
(98.0)
150.69(59.2)
3,717.10

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: 3 (Company name: SHIMA Electronic Industry Co., Ltd.
SHIMA Electronic Industry (H.K.) Co., Ltd.
Shima Electronic Industry (Malaysia) Sdn. Bhd.)
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:
None(Note)

Items to be disclosed in “Changes in Significant accounting policies in the preparation of financial statements.”(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 2011

21,611 shares

FY 2010

21,608 shares

FY 2011

1,703 shares

FY 2010

1,703 shares

FY 2011

19,907 shares

FY 2010

20,006 shares(Reference) Non-Consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2011 (April 1, 2010 – March 31, 2011)(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 2011
12,378
10.3
489
108.5
479
108.3
199
(13.3)FY 2010
11,224(24.3)
234
27.5
230
32.4
230
—
Net income per share

Yen
10,015.76
11,497.36

FY 2011
FY 2010(2) Non-consolidated financial position
Total assets
Million yen
FY 20114,255
FY 2010
3,117
Reference: Shareholders’ equity (million yen):

Diluted net income per shareYen
9,444.99
11,334.19

Net assets
Million yen
1,498
1,295
FY 2011: 1,476

Equity ratio

%
34.7
41.3
FY 2010: 1,286

Net assets per share

Yen
74,170.63
64,656.00

2. Forecasts for the Fiscal Year Ending March 31, 2012 (April 1, 2011 – March 31, 2012)

1H (six months)
Full year

Net sales
Million yen
5,600
13,000%(10.4)
5.0

Ordinary income
Million yen
%
(5)
—
480
0.0

(Percentages represent year-over-year changes)
Net income
Net income per share
Million yen
%
Yen
(45)
—
(452.08)250
25.4
2,511.55* 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
1. 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 1 of the Attachment to the summary of consolidated financial
statement.
2 On April 1, 2011, the Company will undertake a 5-for-1 stock split of common shares held by shareholders on March 31, 2011. The “netincome per share” appearing in “3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2012” and “(Reference) Non-Consolidated
Financial Results” were calculated taking into consideration this stock split.

Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2011
(Based on J-GAAP)

1. Results of Operations(1) Analysis regarding results of operations
During the fiscal year under review the Japanese economy continued to gradually recover due to economic growth in Asian
countries such as China, but economic conditions were thrown into uncertainty as a result of the unprecedented Great East Japan
Earthquake that hit right before the end of the fiscal year. The earthquake not only had an extensive and major impact itself but
also created a secondary disaster, the accidents at the nuclear power plant. Along with the appreciation of the yen, deflationarypressures, and the troubling financial condition of the Japanese government, which must be improved, these disasters have cast apall on future economic growth. Problems such as the destruction of social infrastructure in the Tohoku region, power shortages
due to troubles at the nuclear power plant, and damage caused by rumors have had a substantial negative impact on various
industries in Japan including the manufacturing industry, and economic conditions are extremely bleak with no sign of whenrelief efforts targeting victims of the disaster and reconstruction will be completed.
Under these conditions, within the industry, some manufacturers had experienced a firm recovery in earnings until theearthquake, and the dispatch of manufacturing workers and contract manufacturing services had been recovering even though theeconomic outlook had not been very strong. However, manufacturers and companies in this industry were faced with thechallenge of maintaining their system of domestic production. In particular, manufacturers are confronted with numerous
difficult problems including physical damage to plants and equipment, deterioration in logistics capabilities as a result of thedestruction of social infrastructure, partial disruption to the supply chain for parts and materials, damage from rumors related tovarious issues such radioactive contamination of parts due to accidents at the nuclear power plant, unstable production as a resultof power shortages, and maintaining employment when plants are closed.
Occasioned by these developments, 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:- Raise the competitive strength of Inline Solutions (IS) operations, the Group’s core business- Expand Manufacturing Solution (MS) operations, a business with growth potential- Improve business systems in Global Engineering (GE) operations, indispensable for the “neo EMS” one-stop service
concept- Establish a business platform for Electronics Manufacturing Service (EMS) operations, necessary for gaining greater
manufacturing prowess
The earthquake has had a major impact on the Group’s earnings. Although none of the Group’s employees, fortunately, were
injured, the Group has been saddled with greater-than-expected costs, including those related to damaged buildings andstructures, compensation paid to employees when plants were not operating, and transportation of relief goods to damaged areas.
The Group recorded 94 million yen in disaster related expenses under extraordinary losses.
Based on the foregoing, for the consolidated fiscal year under review, the Group reported revenues of 20,675 million yen,operating income of 602 million yen, ordinary income of 584 million yen, and net income of 907 million yen.
Segment results developed as follows.
[1] Inline Solutions (IS) operations
As our clients, manufacturers, faced a business environment in which the yen was appreciating and debate in the Diet
regarding revisions to the current Worker Dispatch Law was suspended, they had several options including closing theirdomestic manufacturing bases in preparation for a shift overseas, shifting to hiring irregular-contract employees on their own
account, or using contract manufacturing services provided by contractors with manufacturing prowess. However, the outlook
for their production systems remained unclear. The Great East Japan Earthquake that hit right before the end of the fiscal year
created numerous difficult problems for manufacturers, such as physical damage to plants and equipment, partial disruption to
the supply chain for parts and materials, unstable production as a result of power shortages, and maintaining employment
when plants are closed. This is an opportunity for manufacturers to review the ideal form of their production bases from a
global perspective.
Before the earthquake, the Group had made valuable propositions to existing and new clients and continues to proactively
engage in the contracting business. Moreover, in connection with a possible principle ban on manufacturing worker dispatch,
for almost ten years the Group has been continuously engaged in dispatching permanent employees of nms to which different
regulations apply, and created a framework enabling manufacturer clients to enter into manufacturing worker dispatch
agreements with the Group without having to worry about compliance matters. Manufacturers have been rating the nms
Group highly for its policy initiatives, business stance, solid track record, and specific propositions, etc., which has enabled
the Group to increase order receipts by some width. Based on the foregoing, revenues in the consolidated fiscal year under-2 -Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2011
(Based on J-GAAP)

review totaled 8,516 million yen.
[2] Manufacturing Solution (MS) operations
Starting last fiscal year, the Group rolled out a management policy that proposes highly profitable business initiatives byusing the Company’s in-house factories, and proactively worked on developing new business fields. During the consolidated
fiscal year under review, continuing on from the last fiscal year, repair operations for home-use game consoles and mobile
phones, etc., posted business growth amid a stable scope of operations and rising handling volumes. This expansion was
possible thanks to manufacturers’ trust in nms’s repair business operations for both home-use game consoles and mobile
phones. The earthquake has had various impacts, including physical damage to structures, but since the earthquake hit rightbefore the end of the fiscal year, the Group had already recorded 3,173 million yen in sales, making the fiscal year the 12
consecutive year of sales growth.
[3] Global Engineering (GE) operations
The Group’s Engineering Solution (ES) operations and Global Solution (GS) operations have historically been treated anddeveloped as distinct individual business models. However, business efficiency improvement measures implemented last
fiscal year to achieve organizational integration activated inter-operational synergies, which connected to the redefinition ofEngineering Solution (ES) operations and Global Solution (GS) operations, combining the two as Global Engineering (GE)
operations. In the consolidated fiscal year under review, to develop nms Group’s global contracting business (“The UKEOI”)
and to capitalize on the Groups contracting power overseas, the Group established a local subsidiary in Vietnam as the first
Vietnam-based business model of its kind and accelerated activities to acquire new customers. In addition, Beijing Zhongji
Zhonghe International Technical Services Ltd. (“Zhongji Zhonghe”), a new joint venture with a government-linked company,
was established in China and was the first foreign firm to obtain a license for labor dispatch (all forms of staff dispatch
including manufacturing staff and engineers) in China.
The earthquake had only a minor impact on this business compared to the IS business and MS business but it affected GE
business to some extent; therefore, the business recorded 689 million yen in sales.
[4] Electronics Manufacturing Service (EMS) operations
These operations constitute a new business centered on SHIMA Electronic Industry Co., Ltd, which joined the Group in July
2010, and its subsidiaries in Hong Kong and Malaysia and the China based manufacturing service plant that caters to theHong Kong subsidiary. In the consolidated fiscal year under review, sales, marketing, and technology aspects underwent
rigorous reviews for a restructuring of business strategies in order to activate inter-operational synergies at the Group level; atthe same time infrastructure for future business growth was put into place. In sales and marketing in particular, efforts
concentrated on the search for possible integration effects such as by commencing business with nms clients. Based on theforegoing, revenues for the consolidated fiscal year under review totaled 8,297 million yen.
Since this is the first fiscal year that consolidated financial statements are being created, there are no year-on-yearcomparisons.
As for the outlook for the coming fiscal year, it has been impossible to fully ascertain the impact of the Great East Japan
Earthquake, but the Group will continue to fully exercise its strengthens under the neo EMS business strategy concept andforecasts that it will record 24,500 million yen in consolidate net sales, 650 million in consolidate operating income, 630
million yen in consolidated ordinary income, and 370 million yen in consolidated net income.
For the IS business, the Group will continually strive to precisely ascertain client trends in order to timely meet the
post-earthquake needs of manufacturers 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, the Group will rapidly launch labor dispatch services (manufacturing staff and engineer dispatch) in
China and fully introduce “The UKEOI (the global shift to contracting)” in Vietnam. The Group will strengthen its footing asa strategic partner of Japanese manufacturers, the Group’s goal, by preparing a wide-range of solution options and precisely
meeting client needs.
For the MS business, the Group will not only reexamine the business model applied to these operations, which havecontinued to generate sales growth even under difficult conditions such as the collapse of Lehman Brothers and the Great East
Japan Earthquake, but also continue to look for new business opportunities. It is assumed that manufacturers will further
examine moving their production bases located in Japan overseas on account of the earthquake, 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 actively strive next year to win new projects and improve its know-how related todigital repair technology. The business has been developed centered on repair operations where the work is completed at theGroup’s worksites, but the Group is actively working to develop operations to handle repair work in the field, such as for-3 -Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2011
(Based on J-GAAP)

white appliances that consumers cannot send to the Company.
For the GE business, 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 businesses that were merged this fiscal year. In addition,
the Group will strive to ascertain customer trends and improve the quality of operation management to reduce the time that
potential dispatch workers have to wait for an assignment.
In the EMS business, the Group has generated new business centered on SHIMA Electronic Industry, which joined the Groupin the fiscal year under review, and its subsidiaries in Hong Kong and Malaysia and the China based manufacturing service
plant that caters to the Hong Kong subsidiary. The strategy for this business during the next fiscal year is to form
collaborations with other operations such as the IS business, the core of the neo EMS business strategy concept, and to givethe greatest priority to meeting the diverse needs of manufacturers. In particular, the Group is aiming to increase orders fromclient manufacturers in the IS business, MS business, and GE business and will develop a business strategy to maximize
inter-operational synergies at the Group level and vigorously undertake both sales and technology related activities.
(2) Analysis concerning financial position
1) Assets, liabilities and net assets
Consolidated assets at the end of the fiscal year under review totaled 7,362 million yen.
Current assets totaled 6,507 million yen, which included 3,226 million yen in trade notes and accounts receivable, and
1,371 million yen in cash and deposits.
Fixed assets totaled 854 million yen, which included 427 million yen in property, plant, and equipment, and 410 million
yen in investments and other assets.
Consolidated liabilities totaled 5,192 million yen.
Current liabilities totaled 4,232 million yen, which included 1,706 million yen in trade notes and accounts payable, and998 million yen in other accounts payable.
Long-term liabilities totaled 960 million yen, which included 910 million yen in long-term loans.
Consolidated net assets totaled 2,169 million yen, comprised of 500 million yen in legal capital, 216 million yen in capitalsurplus, and 1,511 million yen in retained earnings.
2) Cash flows
Consolidated cash and cash equivalents and the end of the fiscal year under review totaled 1,712 million yen.
Net cash provided by operating activities was a 671 million yen. Main factors were a 1,060 million yen in net income
before income taxes and a 592 million yen in goodwill expenses.
Net cash used in investing activities was a 196 million yen. Main factors were a 292 million yen in income from therepayment of time deposits and a 498 million yen in expenses for the acquisition of subsidiary stocks due to a change inthe scope of consolidation.
Net cash provided by financing activities was a 349 million yen. Main factors were a 1,400 million yen in income fromnew long-term loans and, among expenses, a 831 million in net repayment of short-term loans and a 209 million in
repayment of long-term loans.
(Reference) Cash flow related indicators

FY 2010
FY 2011
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.
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.
-4 -Nippon Manufacturing Service Corporation. (2162) /Consolidated Financial Results for Fiscal Year Ended March 31, 2011
(Based on J-GAAP)

Since this fiscal year is the first fiscal year that consolidated financial statements have been created, year-on-yearcomparisons are not provided.

(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 1,000 yen per share. After
that, taking into consideration the acquisition of the SHIMA Electronic Industry group and firm earnings generated by the nms
itself, the Group announced that it had revised its forecast for the year-end dividend to 2,000 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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