Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change (%)	Factors
Overall
Sales	242,409	286,166	(15.3)	-
Operating income	3,569	407	776.9	-
Ordinary income	9,548	7,150	33.5	-
Net income	1,896	(1,285)	-	-
Automotive Brakes
Sales	41,350	49,606	(16.6)	-Although domestic automobile sales rebounded in the second half of the year to a level in the same period of the previous year supported by tax incentives and subsidies for eco cars, exports remained sluggish and a decrease in domestic production led to a decline in sales of the Company. -Sales from overseas operations decreased except at the subsidiary in China where the market made a quick turnaround.
Operating income	3,879	3,467	11.9	-
Electronics Business
Sales	51,709	60,549	(14.6)	-
Operating income	(2,654)	(3,918)	-	-
ChemicalsBusiness
Sales	14,569	16,279	(10.5)	-
Operating income	(375)	(1,901)	-	-

Businesses Restructuring

-The Company announced that Nisshinbo Brake Inc. and Nisshinbo Brake Sales Co., Ltd. will merge on Apr. 1, 2010. Since Apr. 2009, when the Group adopted a holding-company form of organization, Nisshinbo Brake has been operating as a split-off unit of the Company. Nisshinbo Brake Sales, which is wholly owned by Nisshinbo Brake, has been functioning as a domestic sales division of the Group. Integrating production and sales units will allow the Companys' brake department to conduct business in a more agile manner and expedite decision-making processes. (From an article in the Nikkan Jidosha Shimbun on Oct. 31, 2009)

-The Company announced liquidation and merger of its subsidiaries in order to restructure its business. It will integrate its automobile brakes business in the U.S. into Nisshinbo Automotive Manufacturing Inc. (NAMI), its manufacturing plant in the U.S. Nisshinbo Automotive Corp. (NAC), which has sales, marketing and development functions, will transfer its operations to NAMI and will be liquidated. In Apr. 2009 NAC stopped production, which has been transferred to NAMI. The integration this time, therefore, will complete its reorganization into one U.S. corporation. Liquidation of NAC is scheduled for Dec. 31. In Japan, Nisshinbo Mechatronics Inc. and Nippon Kohbunshi Co., Ltd. will be merged on Mar. 1, 2010 with the former as a surviving company. (From an article in the Nikkan Jidosha Shimbun on Nov. 28, 2009)

Joint Venture

-The Company announced that it has entered into an agreement with Continental to expand operations of their joint venture company Continental Automotive Corporation (CAC) in Japan. Three divisions of the Continental Automotive Group, including airbag control units and automotive sensors, as well as plants in China and Korea will be integrated into CAC by Mar. 2010. This will allow CAC to function as a chassis and safety system supplier, and develop a structure that is capable of global supply. Integration of operations is expected to increase sales of CAC by 50 percent. (From an article in the Nikkan Jidosha Shimbun on Dec. 18, 2009)

>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)  

Outlook for FY2010

(in millions of JPY)

	FY2010 (Forecast)	FY2009 (Actual)	Rate of Change (%)
Sales	256,000	242,409	5.6
-Automotive Brakes	40,500	41,350	(2.1)
-Electronics	54,500	51,709	5.4
-Chemicals	14,500	14,569	(0.5)
Operating income	13,500	3,569	278.3
Ordinary income	19,000	9,548	99.0
Net income	11,000	1,896	480.2
Capital Expenditure	16,000	13,027	22.8
-Automotive Brakes	2,400	1,031	132.8
-Electronics	2,700	N.A.	-
-Chemicals	300	945	68.3

 

Medium-term Business Plan Covering the Three-year Period "Challenge 2012"

(in millions of JPY)

	FY2012 (Forecast)	FY2011 (Forecast)	FY2010 (Forecast)	FY2009 (Actual)
Sales	285,000	268,000	256,000	242,409
-Automotive Brakes	46,000	43,500	40,500	41,350
-Electronics	64,000	57,000	54,500	51,709
-Chemicals	17,500	16,000	14,500	14,569

-The Company announced that the Company has mapped out its new medium-term business plan covering the three-year period through Mar. 2013. Under the new program called the "Challenge 2012", the Company will focus its management resources on environmental and energy businesses. It will work on establishing and nurturing new businesses, such as solar cells, fuel cells, electric double-layer capacitors, Carbodilite high-performance chemical products, and carbon catalysts. Its initiatives include expanding the brake business based on global business strategies. The sales target for fiscal year 2012 is 285 billion yen on a consolidated basis, which is an increase of 47 billion yen from the estimated sales for fiscal year 2009. In terms of profit, the company aims to generate 18 billion yen in operating income and 15 billion yen in net income, which is up 15 billion yen and 14 billion yen from the estimated figures for FY2009, respectively. (From an article in the Nikkan Jidosha Shimbun on Mar. 29, 2010)

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	8,817	11,932	12,479
Automotive Brakes	2,915	3,755	3,791
Electronics	4,538	6,095	6,452
Chemicals	455	980	1,209

R&D Facilities

Automotive Brakes
Development Center and Testing Center	Gunma Pref., Japan
Chemicals
Central Research Institute	Chiba Pref., Japan

R&D Activities

Automotive Brakes
<Friction Materials>
-The Company is conducting R&D activities to ensure high level safety as a critical-safety component by providing customers with satisfaction in NVH and in consideration of the global environmental needs.

-The Company is enhancing development assistance to its overseas subsidiaries and promoting cost reduction activities in close collaboration among functions of development, manufacturing and production engineering with the aim of strengthening its competitive edge.

<Automotive Brakes>
-In order to expand global business operations, the Company is not only reinforcing its development assistance to its overseas subsidiaries, but also promoting technological collaborations with overseas partners.

-The Company is intent on not only development of new technologies for the future, but also commercialization of environmental technologies.

-Through standardizing components and increasing efficiency in development activities, as well as taking cost reduction measures from early stages in development, the Company is working on strengthening its competitive edge.

Electronics
-The Company is expanding its LCD driver IC product lineup focused on products of higher quality for use on vehicles.

-Having completed development of an IC for digital control of the power source, the Company is developing products to expand its application range.

-In the area of semi-conductor processing, its core technology, the Company transferred production process of BCD (Bipoler-CMOS-DMOS) to UMC Japan. UMC is accelerating development of power devices and other ICs for use in vehicles.

Chemicals
<Fuel cells>
-The Company is conducting research and development activities to enhance performance of a fuel cell separator by taking advantage of features of carbon materials.

-The Company announced that it has confirmed the world's top-level electric power generating attributes of its carbon alloy catalysts when used as alternatives to platinum. The Company is carrying out the carbon alloy project based on a prospect that the material can replace platinum used as fuel cell catalysts. Compared with platinum catalysts, carbon alloy catalysts offer a 90 percent reduction in costs. Carbon alloy products also provide extended battery lifecycles, because they do not have corrosion behavior to other materials, which is seen in platinum-based catalysts. The Company will continue its development activities for improving the power generating levels, aiming to meet automakers' launch schedules for fuel-cell cars. Current voltage level is 0.67V at open-circuit voltage of 0.98V and 0.2 amperes per centimeter. Output density is 525 milliwatt per square centimeter. (From an article in the Nikkan Jidosha Shimbun on Apr. 2, 2009)

<Capacitors>
-The Company is improving durability performance of a dual electric layer capacitor.

Major Technology Introduction Agreements

(As of Mar. 31, 2010)

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)	Oct. 2009 to Oct. 2012
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 (yearly automatic extension after Nov. 2008)

Licensing of Technology from Other Companies

(As of Mar. 31, 2010)

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.	Jul. 2007 to Jun. 2010
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)	Oct. 2009 to Oct. 2012

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	13,027	16,872	24,279
Automotive Brakes	1,031	N.A.	5,221
Electronics	N.A.	2,843	4,847
Chemicals	945	1,380	N.A.

Automotive Brakes
-Nisshinbo Brake Inc., a consolidated subsidiary of the Company, invested in construction of the global information control system and other information technology-based projects.

Chemicals
-The Company made an investment in construction of facilities at the Chiba Plant for manufacturing fuel cell separators.

Plan for New Facilities (automotive related)

(As of Mar. 31, 2010)

Company/plant name (Location)	Details of the facility	Planned investment amount (millions of yen)	Start	Expected to be completed in:	Increase of manufacturing capacity after completion
New Japan Radio Co., Ltd. Kawagoe Plant (Saitama Pref., Japan)	Electronic parts manufacturing facilities	1,020	Mar. 2010	Mar. 2011	-