Financial Overview

(in millions of JPY)

	FY2010 (ended Mar. 2011)	FY2009	Rate of Change (%)	Factors
Overall
Sales	456,198	404,143	12.9	-
Operating income	32,757	18,785	74.4	-
Ordinary income	33,407	17,631	89.5	-
Net income	19,420	10,290	88.7	-
Suspension Springs Division
Sales	92,695	78,699	17.8	Recovery of auto production in and outside Japan, and greater demand for trucks.
Profit	8,035	803	900.6
Seat Division
Sales	181,320	160,961	12.6	Recovery of auto production in and outside Japan.
Profit	12,502	8,429	48.3
Precision Parts Division
Sales	114,413	101,981	12.2	Recovery of auto production in and outside Japan, and strong demand for HDDs.
Profit	12,273	10,005	22.7

New Company

The Company will build a new plant for production of automobile seats at its subsidiary in Thailand, which is scheduled to be inaugurated in October 2011. With an investment of approx. 1.1 billion yen, a new facility with a floor space of 10,700 square meters will be constructed at a land area of 142,034 square meters. It plans to hire 211 employees as of 2012 and aims to achieve sales of about 6.2 billion yen as of 2012. The products will be delivered to local automakers, including Mitsubishi Motors (Thailand). (From an article in the Nikkan Jidosha Shimbun on November. 9, 2010)

Business Restructuring

The Company announced that Yokohama Kiko Co., Ltd., one of its consolidated subsidiaries, will spin off its spring business and transfer it to a new subsidiary. The separation and establishment of the new entity, which will be called Nippatsu Kiko Co., Ltd., will become effective on April 1, 2011. The new subsidiary will be owned 100 percent by NHK Spring, employing 167 people. NHK Spring says there will be no change in its capital amount after the spin-off. Yokohama Kiko currently manufactures and sells suspension springs for automobiles as well as various lighting products. The company believes separating the two different operations will allow the Group to achieve further growth in respective markets. (From an article in the Nikkan Jidosha Shimbun on February 9, 2011)

The Company intends to make its consolidated subsidiary Yokohama Kiko Co., Ltd. wholly owned, as of September 1, 2010. Yokohama Kiko, based in Isehara, Kanagawa Prefecture, engages in the manufacturing and sale of stabilizers and lighting equipment among others. (From a press release on May 11, 2010)

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

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	9,786	9,612	11,452
Rate of expenditure to sales (%)	2.1	2.4	2.6

R&D Structure

-812 research and development staff members as of March 31, 2011.

R&D Activities

Suspension Spring Division
-R&D Expenses: 1,477 million yen
-Major issues: To reduce the costs of coil springs and develop tapered coil springs. To improve the durability of stabilizers and address the issue of three-dimensional bending. To develop high-strength leaf springs.
-Major achievements: The Company succeeded in improving durability, ensuring quality, and further reducing prices.

Seat Division
-R&D Expenses: 3,483 million yen
-Major issues: (1) Reducing product weight: The Company worked to reduce product weight by using a new structural design for seat frames, applying high-tensile steel and improving and reducing the size of mechanical components. (2) Reducing costs: The Company worked to reduce costs through standardizing products and components and improving productivity such as by using a new method for welding.
-Major achievement: The Company won new orders for standard seat frames and completed seats for passenger vehicles.
-The Company also conducted research and development activities to improve the basic performance of car seats such as by reducing occupant fatigue and improving seating comfort.

Precision Parts Division
-R&D Expenses: 3,057 million yen
-The Company is developing precision springs based on new structural designs. These springs will be used in car transmissions, truck transmissions, and safety devices. It is also developing technology to create lighter weight precision springs that will improve fuel efficiency; and also motor parts, connector parts, and other products that respond to next-generation vehicles, by making use of technology in the field of high-precision stamped processing.