Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of change (%)	Factors
Overall
Sales	494,350	450,693	9.7	1)
Operating income	13,175	13,393	(1.6)	2)
Ordinary income	22,171	17,686	25.4	-
Net income	9,011	6,418	40.4	3)
Automotive Brakes
Sales	148,699	118,849	25.1	4)
Operating income	(1,813)	(4,301)	-
Electronics Business
Sales	187,742	175,307	7.1	-
Operating income	9,351	7,788	20.1
ChemicalsBusiness
Sales	8,810	8,150	8.1	-
Operating income	105	132	(20.5)	-
Precision equipment
Sales	28,655	24,520	16.9	-
Operating income	1,075	(146)	-

Factor
1)
-Sales increased year-on-year due to strong sales at the brake business by subsidiaries outside Japan, due to favorable currency translation of revenue generated outside Japan, and due to strong sales by the electronics business, solutions business, and semi-conductor business.

2)
-Since last year, when the Company posted a profit of JPY 5,541 million as a result of selling off huge real estate assets, it was able to recover JPY 4,509 million due to a recovery in business performance at TMD, a significant improvement in business results at its brake operations outside Japan, and higher income at its electronics business, i.e., Japan Radio Co., Ltd., in spite of sluggish performance buy the real-estate business this year.

3)
-Even though the Company posted an extraordinary loss of JPY 4,541 million that resulted from its investing to streamline operations at Japan Radio Co., Ltd., etc., it posted a profit due to lower corporate taxes that resulted from posting deferred tax assets of a subsidiary.

4)
-Both sales and profits were up year-on-year in Japan, thanks to a recovery in orders for products destined to China, and greater automobile sales that resulted from last-minute demand for new cars before the consumption tax increased in Japan.
-Outside Japan, the automotive markets were strong in the U.S.A. and Asia; sales at subsidiaries in Thailand, Korea, and China significantly increased; and profits at its US subsidiary increased.

-A recovery is occurring in its performance by sector, even though the Company reported a loss after posting an expense of JPY 9,171 million for goodwill depreciation expenses that resulted from acquiring the TMD Friction Group S.A. and for the amount that resulted when differences between European and Japanese accounting standards were adjusted.

Joint Venture

The Company announced that it will establish a joint venture with Continental Automotive Holding Co., Ltd. in Yangzhou, Jiangsu Province, China. Continental Automotive Holding is a Chinese subsidiary of German supplier Continental AG. A new joint venture, called temporarily Nisshinbo-Continental Precision Machining (Yangzhou) Co., Ltd., will manufacture and sell valve blocks, key component of electronic brake systems. It will be capitalized at CNY 200 million (JPY 3,200 million), of which 70.0 percent will be invested by Nisshinbo Holdings, and 30.0 percent will be provided by Continental Automotive Holding. A new company is planned to be established in December, 2013 and to commence its operation in January, 2015. (From a press release on November 6, 2013)

Mid-term Management Plan

-Performance objectives by the end of the fiscal year that ends in March 2018 are as follows.
Sales: JPY 600 billion
Operating income: JPY 40 billion
ROE: 9% or more

The Company launched Next 2015, a new mid-term management plan that covers three fiscal year starting from April 2013.

Performance objectives for the fiscal year that ends in 2016 are as follows:
Sales: JPY 550 billion
Operating income: JPY 24 billion

In order to achieve these objectives, the Company will implement the following.
-strengthen its global competiveness
-renew and grow the electronics business
-strengthen the brake business
-strengthen the profit structure of the textile, paper, precision instruments, and chemical products businesses

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

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ended Mar. 31, 2014 (Actual Results)	Rate of Change (%)
Sales	530,000	494,350	7.2
Operating income	18,000	13,175	36.6
Ordinary income	22,000	22,171	(0.8)
Net income	10,000	9,011	11.0
Sales by major business division
Automotive Brakes	165,000	148,699	11.0
Electronics	202,000	187,742	7.6
Chemicals	10,300	8,810	16.9
Precision equipment	31,500	28,655	9.9

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	19,630	17,912	16,285
Automotive Brakes	8,573	7,081	3,092
Electronics	9,018	8,774	11,357
Chemicals	580	479	107
Precision equipment	23	49	180

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>
-Develop environmentally low-impact products that ensure a high level of reliability as important safety products that comply with regulations on copper, etc.; focusing on meeting customer needs in terms of reducing noise and vibration.

-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.

-Focus on making products lighter in weight in order to improve fuel efficiency, commercialize technology that responds to environmental concerns, and commercialize new technology with a vision toward the future.

-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 New Japan Radio Group>
-Develop semi-conductors specialized for both consumer and commercial vehicles.

-The Company, has developed the NJW4132, a step-up switching regulator IC which can be synchronized with external clocks. The NJW4132 is suitable for use in step-up circuits for car AV devices and for OA and industrial equipment, as well as in power supply circuits for LEDs. The company has already started mass production. (From a press release on March 26, 2014)

<Nagano Japan Radio Group>
-In terms of information and communications devices, developed OS and BIOS packaging technology for the latest CPU boards; developed short-distance radio modules between 400-920MHz; and developed designs customized by use of microwave plasma torches.

-Development of elemental wireless power supplies, and fundamental research on technology to ensure high fastening reliability of coils for onboard use.

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>
-Raising performance level of electric double layer capacitors, and further developing business sectors such as construction equipment, car racing, etc.

Company-wide
<Functional materials for radios>
- In responding to the hydrogen age, conducting R&D activities on carbon-alloy catalysts and hydrogen storage carbon that are the most reliable in the world, as replacements for platinum catalysts.

Major Technology Licensing-in Agreements

(As of Mar. 31, 2014)

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, 2014)

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. 2013
Heng Tong Auto Parts Inc. (Taiwan)	Know-how on design and manufacturing technology for drum brakes and related components.	3 years from Jun. 2013

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	19,895	20,123	15,704
Automotive Brakes	N.A.	N.A.	1,008
Electronics	N.A.	N.A.	2,988
Precision equipment	N.A.	N.A.	1,106
Chemicals	N.A.	N.A.	N.A.

Automotive Brakes
-Capital investments:

• 3,800 million yen to add facilities for producing friction materials at TMD Friction GmbH and other subsidiaries.
• 2,651 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

-TheComapny announced that it will relocate and expand TMD Friction do Brazil S.A., its brake pad manufacturing subsidiary in Brazil. Approximately JPY 6.4 billion will be invested in the project to double the Group's sales in South America by 2020. The subsidiary that Nisshinbo purchased through the acquisition of the TMD Friction Group S.A. in 2011 holds the No.1 position in the brake friction materials market in Brazil. The plant is currently located in Indaiatuba in the state of Sao Paulo, where urbanization is accelerating. Nisshinbo has decided to move the plant to Salto in the same state to acquire a new site for the expansion. (From an article in the Nikkan Jidosha Shimbun on November 12, 2013)

Plan for New Facilities (automotive related)

(As of Mar. 31, 2014)

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
TMD Friction Do Brasil S.A.	Manufacture and sale of brake products	6,438	Feb. 2014	Dec. 2016	-
Nisshinbo Somboon Automotive Co., Ltd. (Second phase of investment)	Manufacture and sale of brake products	1,335	Apr. 2013	Jan. 2015	-