Highlights FY2007 (ended Mar. 2008)

Financial Overview

(in million JPY)	FY2007	FY2006	Rate of change (%)	Factors
Overall
Sales	322,411	312,875	3.1	Sales of brakes and paper products were brisk.
Operating income	12,033	11,551	4.2	An increase in profit generated by the brake business offset a drop in profit from textile and other businesses.
Ordinary income	18,916	17,282	9.5	Profit from equity associates increased due to robust business performance by Continental Automotive Corporation (a joint venture manufacturing ABS) and strong sales by Japan Radio Co., Ltd., in which the Company raised equity in fiscal 2007.
Net income	12,289	15,107	(18.7)	Net income was down because of a decline in the gain on sale of investments in securities and once-off depreciation of an unamortized amount outstanding for goodwill in New Japan Radio Co., Ltd.
Automotive Brakes
Sales	66,397	61,764	7.5	Brakes: The Company received new orders and recorded an increase in sales of automotive brakes due to a rise in domestic auto production for export to emerging countries and oil-producing nations, as well as strong global production by Japanese and Korean automakers. ABS: Sales of ABS declined as the Company transferred business to its joint venture, Continental Automotive Corporation.
Operating income	8,871	7,009	26.6	Brakes: Operating income increased as negative factors such as soaring materials prices were offset by a decline in costs, as relocation to a Toyota Plant was completed and income at its U.S. subsidiary improved.  ABS: Cost-cutting initiatives contributed to an increase in operating income.
Electronics Business
Sales	76,474	76,067	0.5	Sales and profit both increased thanks to favorable business performance at its subsidiaries: New Japan Radio Co., Ltd. and Ueda Japan Radio Co., Ltd.
Operating income	1,103	1,041	6.0

Corporate divestiture

The Company will become a holding company on April 1, 2009, separating five business segments including textiles, brakes, paper products, chemicals and electronics, to further reinforce its diversified operations. Nisshinbo Brake will take over the rights and obligations of the brake business. The Company will change its name to Nisshinbo Holdings. New Japan Radio Co., Ltd. will continue to be a leading company in the electronics business. 

R&D Structure

-R&D centers

Business Division	Facility	Location
Automotive Brakes	Research and Development Center (in Tatebayashi Plant)	Gunma Pref., Japan
Electronics	New Japan Radio Co., Ltd.	-
Chemicals	Central Laboratory	Chiba Pref., Japan

R&D Expense

(in million JPY)	FY2007	FY2006	FY2005
Overall	12,479	12,244	9,607
Automotive Brakes	3,791	3,702	3,511
Electronics	6,452	6,414	3,352
Chemicals	1,209	369	391

R&D achievements (FY2007)

Business	Details
Automotive Brakes	Friction materials: -The Company is working to develop value-added products with improved safety as well as improved sound and vibration performance. -The Company is focusing on environmentally-friendly product development, such as R&D of green materials using non-harmful substances and initiatives to comply with the European Chemicals Agency's new REACH regulations.  -Seeking to bolster its competitive edge, the Company reinforced support systems for development activities conducted by its foreign subsidiaries. It also promoted cost reduction initiatives by aligning development, manufacturing and production technology.  Automotive brakes: -In order to win more orders in its global business, the Company strengthened support of development for subsidiaries outside Japan and is promoting cooperation with technical tie-up partners outside Japan. -The Company is working to reduce costs during the development phase by using standardized parts and improving efficiency of development operations.
Electronics	- Development of audio digital signal processors (DSP) is ongoing, targeting the car audio market.
Chemicals	-The Company is promoting commercialization of separators for fuel cells mounted on automobiles.  -The Company developed high-power electric double layer capacitor. In collaboration with Japan Radio Co., Ltd. and Nagano Japan Radio Co., Ltd., the Company is promoting development that will allow mounting on automobiles.

Technical tie-up

In 2000 the Company and Continental Teves of Germany established a joint venture to develop and commercialize next-generation brake systems such as ABS, traction control systems (TCS) and electronic stability controls (ESC). 

Major technology introduction agreements (as of March 31, 2008)

Company (Country)	Contract details	Contract term
TMD Friction Holding GmbH (Germany)	Know-how on manufacturing technology and material composition for brake linings and disc pads. Also assistance in sales activities. (cross-licensing contract)	10 years from Nov. 1991 (yearly automatic extension after Nov. 2001)
TRW Automotive Inc. (UK)	Know-how on design and manufacturing technology for drum brake assemblies, brake valves and their components for automobiles.  Also assistance in sales activities. (cross-licensing contract)	Nov. 1995 to Oct. 2006 (*1)
Meritor Heavy Vehicle Braking Systems (UK) Limited. (UK)	Know-how on design and manufacturing technology for disc brake assemblies, drum brake assemblies and their  components	Nov. 2003 to Nov. 2008

*1: Renewal of the terms of the agreement is under negotiation because the agreement expired.

Major licensing agreements (as of March 31, 2008)

Company (Country)	Contract details	Contract term
Rane Brake Linings Limited (India)	Know-how on manufacturing technology, material composition, and technical information on manufacturing facilities for brake linings, disc pads and clutch facings manufacturing.	5 years from Jan. 2005
TMD Friction Holding GmbH (Germany)	Know-how on manufacturing technology and material composition for brake linings and disc pad manufacturing. Also assistance in sales activities. (cross-licensing contract)	10 years from Nov. 1991 (yearly automatic extension after Nov. 2001)
Heng Tong Auto Parts Inc. (Taiwan)	Know-how on manufacturing technology, material composition, and technical information on manufacturing facilities for brake linings and disc pads. Also, guidance on factory construction for licensed products.	5 years from Dec. 2005
Heng Tong Auto Parts Inc. (Taiwan)	Know-how on design and manufacturing technology for disc brakes and their components.	Dec. 2002 to Jun. 2007 (*1)
TRW Automotive Inc. (UK)	Know-how on design and manufacturing technology for drum brake assemblies, brake valves and their components for commercial vehicles. Also assistance in sales activities. (cross-licensing contract)	Nov.1995 to Oct. 2006 (*1)

*1: Renewal of the terms of the agreement is under negotiation because the agreement expired.

Capital Expenditure

(in million JPY)	FY2007	FY2006	FY2005
Overall	24,279	17,077	16,548
Automotive Brakes	5,221	4,546	5,177
Electronics Division	4,847	3,592	-

Capital investment (FY2007)

Division	Details
Automotive Brakes	-Invested mainly in friction materials manufacturing facilities at its Tatebayashi Plant and Saeron Automotive Corporation of Korea.
Electronics	-A large part of this investment was made by its consolidated subsidiary, New Japan Radio Co., Ltd., for its semiconductor manufacturing facilities.

Plan for new facilities

Company/plant name (Location)	Business/ Details of the facility	Planned investment amount (millions of yen)	Start	Expected to be complete in:	Increase of manufacturing capacity after completion
The Company Chiba Plant (Chiba Pref., Japan)	Chemicals/ capacitor manufacturing facilities	1,180	Nov. 2006	Mar. 2009	50,000 cells/month
New Japan Radio Co., Ltd. Kawagoe Plant (Saitama Pref., Japan)	Electronics/electronic parts manufacturing facilities	2,122	Oct. 2007	Mar. 2009	-