Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of change (%)	Factors
Overall
Sales	450,693	379,340	18.8	-The addition of TMD Friction Group S.A. as a consolidated company contributed to higher sales.
Operating income	13,393	4,170	221.2	-
Ordinary income	17,686	8,680	103.8	-
Net income	6,418	9,415	(31.8)	-
Automotive Brakes
Sales	118,849	47,450	150.5	1)
Operating income	(4,301)	4,254	-
Electronics Business
Sales	175,307	169,906	3.2	-The return to profitability was due to the success of initiatives aimed at improving the business structure.
Operating income	7,788	(4,111)	-
ChemicalsBusiness
Sales	8,150	8,258	(1.3)	-
Operating income	132	373	(64.6)	-
Precision equipment
Sales	24,520	25,190	(2.7)	-
Operating income	(146)	(1,069)	-

Factor
1)
-Lower operating revenue and profit in Japan were due the end of government-sponsored, auto sales-incentive programs and the drop in orders of products destined for the Chinese market.

-Outside of Japan, sales were significantly higher year-on-year because of the contribution from TMD Friction Group S.A., which was added as a consolidated subsidiary. However, the Company's operating loss worsened year-on-year, due to the huge write-offs for depreciation costs involved with absorbing the TMD company name in line with the buy-out, the write-off of depreciation costs for intangible assets, the write off of R&D expenses, and adjustments needed to align the accounting differences between Europe and Japan.

Recent Development Outside Japan

Providing Support for TMD, Its European Subsidiary
-The Company is accelerating steps to prop up the business of TMD Friction Group S.A., a Luxembourg-based leading manufacturer of brake friction materials, which was consolidated into the Nisshinbo Group last November. Due to the stagnation in the European economy, sales of the TMD unit alone in the April-September 2012 period fell short of initial expectations with profits dropping sharply. Given a possible downward swing in its performance for the full year, TMD will undertake structural reforms promptly. It will review product portfolio at each business unit, reduce sales administrative expenses, and establish a new company to expand aftermarket business with an aim of increasing sales. In addition, the company will make further efforts to improve profitability by reviewing production structure while expanding the joint procurement of equipment and materials with Nisshinbo Brake Inc. (From an article in the Nikkan Jidosha Shimbun on Nov. 20, 2012)

New Business

Expanding Sales of Electric Double-layer Capacitors
- The Company will focus on expanding sales of its electric double layer capacitor targeting commercial production cars. At present, the company sells the capacitor primarily for industrial and building equipment with a small production volume. Although the capacitor has been used for racing cars, it has not been applied to mass production models yet. Nisshinbo will now focus on targeting hybrids, electric vehicles, and vehicles with a start/stop function, aiming to make profit in this business after three years in 2015. (From an article in the Nikkan Jidosha Shimbun on Nov. 14, 2012)

Procurement Activities

-Nisshinbo Brake Inc. (headquarters: Tokyo, Japan) is aiming to optimize its global procurement activities for brake friction materials and components by taking full advantage of related data accumulated at its group-wide operations. Having acquired TMD Friction Group S.A., Europe's leading friction materials supplier based in Luxembourg, last year, the company will integrate TMD Friction's global data into its own information resource to use it as a reference for sourcing high quality yet low cost materials. (From an article in the Nikkan Jidosha Shimbun on Oct. 2, 2012)

New Mid-term Management Plan

-On April 11, the Company announced its new "Next 2015" midterm business plan covering from FY2013 through FY2015. The company will focus on its business in the area of automotive brakes and electronics. Sales are expected to reach 550 billion yen, up 22 percent from the FY2012 level, and operating profit target is set at 24 billion yen, up 140 percent from FY2012. In addition, of more than 86 billion yen the company is planning to invest in plants and equipment for the next three years, it is going to spend as much as 70 percent for the brake division and the electronics division. Regarding its brake business, goodwill amortization expenses from the purchase of TMD Friction Group S.A. are likely to increase due to exchange rate fluctuations. The company, however, is poised to strengthen its business structure and improve profitability by accelerating its operational reorganization efforts. (From an article in the Nikkan Jidosha Shimbun on Apr. 13, 2013)

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

Outlook for FY ending Mar. 31, 2014

(in millions of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)
Sales	480,000	450,693
-Automotive Brakes	136,000	118,849
-Electronics	185,000	175,307
-Chemicals	10,000	8,150
-Precision equipment	29,000	24,520
Operating income	14,000	13,393
Ordinary income	16,000	17,686
Net income	1,000	6,418

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	17,912	16,285	11,608
Automotive Brakes	7,081	3,092	2,948
Electronics	8,774	11,357	7,025
Chemicals	479	107	352
Precision equipment	49	180	299

R&D Facilities

Automotive Brakes
Nisshinbo Brake Inc. Development Center and Testing Center	Gunma 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. Ensuring "Safety First"
2. Recovering from the Great East Japan Earthquake; reorganizing its business operating structure.
3. Advancing its global operating strategy
4. Developing/growing sales of products that offer differentiating features and that are also cost competitive.
5. Establishing a consolidated management structure
6. Effectively responding to operational risks
7. Developing international human resources

<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.

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.

Major Technology Licensing-in Agreements

(As of Mar. 31, 2013)

Company (Country)	Contract details	Contract term
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)

Major Technology Licensing-out Agreement

(As of Mar. 31, 2013)

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
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

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	20,123	15,704	12,800
Automotive Brakes	N.A.	1,008	936
Electronics	N.A.	2,988	3,419
Precision equipment	N.A.	1,106	N.A.
Chemicals	N.A.	N.A.	N.A.

Automotive Brakes

-Capital investments:

• 3,917 million yen to add facilities for producing friction materials at TMD Friction GmbH and other subsidiaries.
• 3,309 million yen to add new plants and facilities for producing friction materials at its consolidated subsidiary Nisshinbo Somboon Automotive Co., Ltd. and Nisshinbo Saeron (Changshu) Automotive Co., Ltd

Investments Outside Japan

-Nisshinbo Brake Inc., a group company Nisshinbo Holdings Inc., will increase its capacity to produce friction materials for brake products in China. Following an expansion at Saeron Automotive Beijing Co., Ltd. operated by its Korean subsidiary, Nisshinbo Brake will also build capacity at Nisshinbo Saeron Changshu Automotive Corporation, its new Chinese subsidiary opened on September 5. The Changshu facility plans to achieve production capacity of over 1.2 million units by 2014 to expand supply to Japanese and U.S. automakers' Chinese operations. In order to enhance the Group's global supply capacity further, Nisshinbo Brake is also mulling an additional investment project for TMD Friction, its group company based in Luxemburg. (From an article in the Nikkan Jidosha Shimbun on Sep. 26, 2012)

Plan for New Facilities (automotive related)

(As of Mar. 31, 2013)

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
Nisshinbo Somboon Automotive Co., Ltd. (First phase of investment)	Manufacture and sale of brake products	1,685	Apr. 2012	Apr. 2014	10% increase in production capacity
Nisshinbo Somboon Automotive Co., Ltd. (Second phase of investment)	Manufacture and sale of brake products	2,970	Apr. 2013	Jan. 2015	-
Nisshinbo Saeron (Changshu) Automotive Co., Ltd. (First part of second phase)	Facilities for anufacture friction materials	960	Nov. 2012	Dec. 2013	50% increase in production capacity