Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	325,555	242,409	34.2	-
Operating income	19,842	3,569	455.9	-
Ordinary income	25,268	9,548	164.6	-
Net income	11,184	1,896	489.8	-
Automotive Brakes
Sales	46,118	41,045	12.3	- Sales of brake parts increased in the first half of the year thanks to a rise in demand buoyed by the government’s eco-car incentive schemes and subsidy programs. Despite a drop in revenue from the recoil reduction following the termination of the eco-car incentive scheme, and the impact of the Great East Japan Earthquake, which caused production stoppages at automakers, overall sales and profit climbed year-on-year supported by stable exports throughout the term.
Operating income	5,090	3,879	31.2
Electronics Business
Sales	112,820	51,699	118.2	- Sales and profit at the electronics business grew significantly year-on-year due to the company’ adding JRC Nihon Musen and Nagano Japan Radio Co., Ltd. to its consolidated financial statement from the fourth quarter as a result of acquiring JRC Nihon Musen through a takeover bid.
Operating income	6,183	(2,654)	-
ChemicalsBusiness
Sales	7,283	6,308	15.4	-
Operating income	(294)	(512)	-	-
Precision equipment
Sales	32,020	24,907	28.5	- Sales and profit at the automotive precision parts business increased thanks to a recovery in demand and a reduction in cost.
Operating income	1,413	(526)

Acquisitions

-The Company announced that it will transform its equity method affiliate, Japan Radio Co., Ltd. into its subsidiary by raising its current 34.02 percent equity to over 50 percent by takeover bid by the end of this year. Through reinforced capital relationship between the two companies, Nisshinbo intends to establish a firm business structure combining expertise in mechatronics technology owned by Nisshinbo and electronics technology owned by Japan Radio in order to enhance operations in the area of energy. In addition to products highlighted in the mid-term business plan, such as solar battery manufacturing equipment, separators for fuel cells and electric double-layer capacitors for hybrids and electric vehicles, Nisshinbo will prioritize on next generation technologies like the smart grid, aiming to create early synergy effects. (From an article in the Nikkan Jidosha Shimbun on November. 10, 2010)

Joint Venture

-The Company announced on July 23 that Nisshinbo Brake Inc., its wholly owned brake production subsidiary, and Saeron Automotive Corporation (a listed company on the Korea Stock Exchange), will establish a 50-50 joint-venture company in the suburbs of Shanghai, China to manufacture and sell automotive friction materials. The Group has been working on increasing its capacity at Saeron Automotive Beijing Corporation (SABC), Saeron's existing subsidiary in China. In response to fast growing automotive market in China, however, it has decided to set up a new facility to meet growing demand in the local market. The new company, Nisshinbo Saeron Automotive Co., Ltd. (tentative name), is scheduled to be formed in September with a registered capital of 1,080 million yen. Nisshinbo and Saeron are now discussing the details of the joint venture business. (From an article in the Nikkan Jidosha Shimbun on Jul. 27， 2010)

Outlook for FY2010

(in millions of JPY)

	FY2011 (Forecast)	FY2010 (Actual)
Sales	405,000	325,555
-Automotive Brakes	46,500	46,118
-Electronics	194,600	112,820
-Chemicals	7,800	7,283
- Precision equipment	31,900	32,020
Operating income	14,000	19,842
Ordinary income	18,000	25,268
Net income	12,000	11,184

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	11,608	8,817	11,932
Automotive Brakes	2,948	2,915	3,755
Electronics	7,025	4,538	6,095
Chemicals	352	455	980
	299	151	-

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

The automotive brake division will work on developing new product and technologies based on the following strategies:
1. Implementing global business strategy based on a target of localizing production operations
2. Developing differentiated products with high cost competitiveness
3. Realigning development activities in line with the technical directions
4. Establishing stable and well-consolidated business
5. Developing effective framework for corporate risk management
6. Training personnel with a global view

Major Technology Introduction Agreements

(As of Mar. 31, 2011)

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, 2011)

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. 2010
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.	3 years from Dec. 2010
Heng Tong Auto Parts Inc. (Taiwan)	Know-how on design and manufacturing technology for drum brakes and related components.	3 years from 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

<Friction Materials>
- In the area of friction materials, which are major products contributing to vehicle safety, the Company aims to ensure a high level of safety, reduce noise and vibration to meet customers demand, and develop environmentally friendly materials that meet restrictions on copper use.  

-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 JRC Nihon Musen Group>
Each of the Group's business segments, including the marine device division, the communication equipment division, and the solutions and special equipment division, is conducting comprehensive R&D activities covering from mid- to long-term basic studies to new technologies connected to its business line.

<The New Japan Radio Group>
The Group is carrying out comprehensive research activities, including planning, designing and studies on production engineering for semiconductor products and microwave components, which are used in radars, satellite communication systems, and ground communication systems. 

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.

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

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	12,800	13,027	16,872
Automotive Brakes	936	1,031	N.A.
Electronics	3,419	N.A.	2,843
Chemicals	N.A.	945	1,380

Automotive Brakes
- The Company invested mainly in increasing its capacity to produce friction materials at Saeron Automotive Corporation and Saeron Automotive Beijing Corporation, which are its consolidated subsidiaries.

Plan for New Facilities (automotive related)

(As of Mar. 31, 2011)

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	1,584	Dec. 2010	Mar. 2012	-