Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	732,842	733,192	0.0	-
Operating income	32,361	44,417	(27.1)	-
Ordinary income	30,310	42,004	(27.8)	-
Current net income	15,739	28,514	(44.8)	-
Automotive Business Division
Sales	490,545	444,585	10.3	1)
Operating income	24,992	22,637	10.4	-

Factors
1) Sales in the Automotive Sector
-Strong demand in the automotive sector drove sales of automotive bearings and parts higher.

<Japan>
-Sales increased in Japan, thanks to the recovery in new-vehicle production volumes after the Great East Japan Earthquake and the increase in sales created by eco-car sales incentive programs.
<Americas>
-Sales increased year-on-year due to higher volumes of new-vehicle sales by Japanese OEMs, driving sales of electric power steering systems higher.
<Europe>
-Sales were lower year-on-year due the economic slowdown in the region.
<China>
-Even though vehicle sales in China overall increased due to the growing automotive market in the country, the Company's sales were negatively affected by the drop in market share of Japanese-brand vehicles.
<Thailand>
-New-vehicles sales rose year-on-year, driven by sales-incentive programs, while sales of automotive bearings and electric power steering systems increased.

Recent Development Outside Japan

<China>
Company Invested in the MOS Group
- The Company announced on February 4 that it would form a capital alliance with Ningbo MOS Group Corporation of China (headquarters: Zhenhai, Ningbo, Zhejiang). After signing a contract based on the agreement, the Company will purchase 25 percent of all MOS shares for more than 1 billion yen. The Company already obtained a 10 percent share in the Group's automotive bearing supplier in September last year, while establishing a collaborative relationship with the Chinese company in supplying products to the Chinese market. By stepping up capital ties with the MOS Group, the Company is intending to develop a closer relationship with the Chinese company in terms of manufacturing and marketing in China. (From an article in the Nikkan Jidosha Shimbun on Feb. 5, 2013)

Launches Low-cost Products in Emerging Markets, Using Materials Procured Locally
- The Company will step up its initiatives to introduce to the emerging markets low-cost products made from locally sourced materials. The company has already begun employing steel materials made by Chinese manufactures in both cones and cups of tapered roller bearings it is producing in China for transmission suppliers. Prior to this move, the Company had conducted a series of survey on local materials by collaborating with Chinese steel suppliers so as to assist them in improving their production processes and quality control systems. This has made possible for the Chinese steel manufacturers to achieve the same level of product quality offered by the Company's suppliers in Japan, while contributing to a 20 percent reduction in bearing prices at the Company. These cost saving efforts are intended to support the Company's customers that are increasing their local production volumes in China. Expecting further growth in demand for bearings in the global market, the company is poised to further enhance its local supply system. (From an article in the Nikkan Jidosha Shimbun on Dec. 22, 2012)

Company Invested in China-based Bearing Manufacturer
- The Company announced that it will make an investment in a Chinese bearing manufacturer, Gongzhuling Bearing Co., Ltd in Jilin Province, a subsidiary of Ningbo MOS Group Corporation. The Company will acquire a 10 percent stake in Gongzhuling Bearing by spending millions of yen to purchase new shares through a third-party allocation. Gongzhuling Bearing is a supplier of automotive bearings to a wide range of customers, including the FAW Group, Dongfeng Motor Corporation and the China National Heavy Duty Truck Group, primarily for trucks and commercial vehicles. The Chinese bearing company generated about 4 billion yen in sales in 2011. (From an article in the Nikkan Jidosha Shimbun on April 17, 2012)

Awards

-Rane Group announced that Rane NSK Steering Systems Limited (RNSSL) in India received Certificate from Maruti Suzuki for "Sincere Efforts and Superior Performance in the field of Focused Cost Down", for the year 2011-12. (From a press release issued in July, 2012)

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	10,432	10,373	10,515
Automotive Business Division	6,681	6,455	6,497

R&D Structure

-With core R&D operations conducted in the technical centers in Japan, the Company has six technical centers in Japan, two in North America, three in Europe, and three in Asia, conducting R&D activities at 14 centers in total.

Product Development

Anti-Fretting Bearing
- The Company announced that it has developed a new anti-fretting bearing to be applied to motors for EGR (exhaust gas recirculation) systems and electronic throttle valves. Use of rolling bearings optimized the interior design, while introduction of newly engineered grease mitigated fretting fatigue. The low-viscosity grease with higher flow characteristics prevents lubrication problem even under continuous vibration, thereby contributing to a 50 percent reduction in fretting damage done to the bearing surface. (From an article in the Nikkan Jidosha Shimbun on Dec. 28, 2012)

High-Efficiency, Shell-Type Needle Bearing
-The Company announced on December 11 that it has developed a high-efficiency, shell-type needle bearing for automatic transmission application. The new product can replace slide bearings or standard, shell-type needle bearings used in oil pumps and planetary gears of automatic transmission systems. Compared with the conventional bearings, it offers improved wearing resistance weight saving characteristics, which contribute to upgrading fuel economy. In addition, the new bearing achieves the same level of quenching resistance as existing, standard shell-type bearings. The Company will soon launch marketing activities for this technology, looking to start delivery around 2015. Sales of the high-efficiency, shell-type needle bearings are expected to reach 1 billion yen by 2017. (From an article in the Nikkan Jidosha Shimbun on Dec. 12, 2012) 

High Efficiency Tapered Roller Bearing
-The Company announced on November 29 that it has developed high efficiency tapered roller bearings with friction loss reduced by nearly 30 percent. They are applied to automatic and manual transmissions, as well as differential gears. Special treatment on rollers has reduced friction loss. In addition, durability performance has been improved by roughly 50 percent and changes in the number and pattern of rollers have resulted in reduction in size and weight. New tapered roller bearings are offered in two types: one of the same size as conventional products and the other of the smaller size, which allows them to be used without modification of the parts design. The Company is aiming for generating 2 billion yen a year in sales of the fourth generation bearings in 2016. (From an article in the Nikkan Jidosha Shimbun on Nov. 30, 2012)

Highly Durable Needle Bearing
-The Company announced on November 12 that it has developed a highly durable needle bearing for planetary gears of automatic transmissions, hybrid transmissions, and belt CVTs. The product is smaller and lighter with longer product life, yet requiring no additional equipment in its production processes. This makes it easier for the Company to transfer its production lines to its facilities in emerging countries. The company expects sales of the new product to reach 1.2 billion yen by 2015. The new bearing was developed by optimizing the heat treatment processes, while utilizing the existing, standard type heat-treating furnaces. The durability level of the roller bearing was raised by 50 percent, and the pressure trace level by 15 percent. This led to a 12 percent reduction in width and 25 percent reduction in weight of the needle bearing. (From an article in the Nikkan Jidosha Shimbun on Nov. 13, 2012)

Clutch Pulley Unit
- The Company announced on November 12 that it has developed a new clutch pulley unit for alternators. The new clutch pulley improves performances to absorb revolution fluctuation, enabling quick engine start-ups even in cold climates. By controlling the squeaking noise coming from the alternator belts, the company was able to extend the lifecycle of the belt, while preventing unpleasant vibration and noise from entering the cabin. The Company is looking to boost its market share with the new product, aiming to increase its yearly sales to 2.4 billion yen by 2016. The clutch pulley uses newly developed grease that constrains slipping, providing high clutch transmission even under temperatures as low as minus 40 degrees Celsius. Also, its wedge shape structure minimizes heating of the roller inside the pulley. In addition to offering quick engine start-up under extremely cold weather and excellent grease performance under heat, the clutch pulley is three times as durable as existing products in terms of clutch service life. (From an article in the Nikkan Jidosha Shimbun on Nov. 13, 2012)

Grease Lubrication Ball Bearing for High-Speed Motors
-The Company announced on September 26 that it has developed a grease lubrication ball bearing for high-speed motors used on electric vehicles (EVs) and hybrid vehicles (HVs). The new ball bearing is capable of supporting motors that rotate at speeds 80 percent faster than conventional motors. The company says it will soon start to propose the new bearing to automakers. The company's engineers developed the advanced bearing by making improvements to the grease and the retainer, which also led to extending the product lifecycle of the bearing. The capability of supporting small, high-speed motors will contribute to expanding the travel range of electrified vehicles. The Company aims to increase its yearly sales of bearings for EVs and HVs, including the newly developed ball bearings, to over 800 million yen by 2017. (From an article in the Nikkan Jidosha Shimbun on Sep. 27, 2012) 

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	48,025	54,619	41,294
Automotive Business Division	31,936	29,892	21,099

-The Company invested even more than it did the previous fiscal year on capital investments in the automotive business, in which demand is predicted to grow even further.
-In its bearing business, the Company spent to upgrade and increase facilities producing hub-unit bearings, needle bearings, tapered bearings, and ball bearings, as follows.

• Hub-unit bearings: plants in the U.K., China, and Thailand
• Tapered bearings: plant in Korea (first time capital investment)
• Needle bearings: plants in Japan, China, Korea

-In its automotive-parts business, the Company spent to upgrade and increase plants in Japan, the U.S.A., and China to respond to the growing demand for electric-power-steering systems.

New Plants

<Mexico>
-On January 8, the Company announced that it will establish a wholly owned subsidiary NSK Bearings Manufacturing Mexico S.A. de C.V., which will be involved in production and sale of automotive bearings and other components in Guanajuato, Mexico. The new company will start operations in the spring of 2014, expecting to achieve sales of around 7 billion yen by 2016. The production facility is slated to be set up within this month with a capital of USD 5 million (approximately 440 million yen). A plant of approx. 13,000 square meters will be built on the premises of approx. 100,000 square meters in the first phase of the construction plan. The Company is going to invest around USD 70 million (6 billion yen) in this project. (From an article in the Nikkan Jidosha Shimbun on Jan. 9, 2013)

<China>
-The Company held a ceremony to mark the opening of two plants in Shenyang, Liaoning Province, China on May 28. One of the two plants manufactures precision products like ball screws and the other manufactures large roller bearings for industrial machinery. The Company expressed a determination to enhance activities for expanding operations of industrial machinery in China at the gathering attended by dignitaries and officials of the Chinese central government, Shenyang City as well as local customers from Japanese, U.S. and European companies. The two subsidiaries that held the inaugural ceremony are Shenyang NSK Precision Co., Ltd., which commenced production in February 2010, and Shenyang NSK Co., Ltd., which commenced production in January 2012. (From an article in the Nikkan Jidosha Shimbun on May 30, 2012)

Planned Capital Investments for the Automotive Parts Related Business

(As of Mar. 31, 2013)

Company Office (Location)	Equipment to be installed	Planned investment (million in JPY)	Start	Complete	Purpose
NSK Ltd. Ohtsu Plant (Shiga Pref., Japan)	Manufacturing facilities for automotive bearings and ball bearings for general use	1,451	Apr. 2012	Mar. 2014	Upgrading production infrastructure and streamlining operations
NSK Ltd. Ishibe Plant (Shiga Pref., Japan)	Manufacturing facilities for automotive bearings	1,336	Apr. 2012	Mar. 2014	Upgrading production infrastructure and streamlining operations
NSK Ltd. Saitama Plant (Saitama Pref., Japan)	Manufacturing facilities for automotive bearings	1,802	Apr. 2012	Mar. 2014	Upgrading production infrastructure and streamlining operations
NSK Steering Systems (Gunma Pref., Japan)	Manufacturing facilities for steering systems	3,189	Apr. 2012	Mar. 2013	Upgrading production infrastructure and streamlining operations
NSK Needle Bearing Co., Ltd. (Gunma Pref., Japan)	Manufacturing facilities for needle bearings	2,435	Apr. 2012	Mar. 2014	Upgrading production infrastructure and streamlining operations
NSK Corporation (Iowa, USA)	Manufacturing facilities for automotive bearings	2,224	Apr. 2012	Mar. 2014	Reorganizing production and streamlining operations
NSK Steeling Systems America. Inc. (Tennessee, USA)	Manufacturing facilities for steering systems	3,833	Apr. 2012	Mar. 2014	Increasing production capacity
NSK Bearings Manufacturing Mexico S.A. de C.V. (Guanajuato, Mexico)	Manufacturing facilities for automotive bearings	2,036	Apr. 2013	Mar. 2014	Building new production plant and increasing/upgrading production facilities
NSK Brazil Ltda. (Suzano, Brazil)	Manufacturing facilities for automotive bearings and ball bearings for general use	637	Apr. 2012	Mar. 2014	Upgrading production infrastructure and streamlining operations
NSK Bearings Europe Ltd. (Durham, UK)	Manufacturing facilities for automotive bearings and ball bearings for general use	3,331	Apr. 2012	Mar. 2014	Upgrading production infrastructure and streamlining operations
NSK Steering Systems Europe (Polska) Sp.Zo.o (Walbrzych, Poland)	Manufacturing facilities for steering systems	1,710	Apr. 2012	Mar. 2014	Increasing production capacity
NSK Bearings Manufacturing (Thailand) Co., Ltd. (Chonburi, Thailand)	Manufacturing facilities for automotive bearings	2,344	Apr. 2012	Mar. 2014	Increasing production capacity and streamlining operations
Siam NSK Steering Systems Co., Ltd. (Chachoengsao, Thailand)	Manufacturing facilities for steering systems	1,885	Apr. 2012	Mar. 2014	Increasing production capacity
Kunshan NSK Co., Ltd. (Kunshan, China)	Manufacturing facilities for automotive bearings and ball bearings for general use	2,924	Apr. 2012	Mar. 2014	Increasing production capacity and streamlining operations
Changshu NSK Needle Bearing Co., Ltd. (Changshu, China)	Manufacturing facilities for needle bearings	2,374	Apr. 2012	Mar. 2014	Increasing production capacity and streamlining operations
Zhangjiagang NSK Precision Machinery Co., Ltd. (Zhangjiagang, China)	Manufacturing facilities for automotive bearings and ball bearings for general use	1,751	Apr. 2012	Mar. 2014	Increasing production capacity and streamlining operations
Suzhou NSK Bearings Co., Ltd. (Suzhou, China)	Manufacturing facilities for automotive bearings	1,034	Apr. 2012	Mar. 2014	Increasing production capacity and streamlining operations
NSK Steering Systems Dongguan Co., Ltd. (Dongguan China)	Manufacturing facilities for steering systems	2,929	Apr. 2012	Mar. 2014	Increasing production capacity
NSK-Wanda Electric Power Assisted Steering Systems Co.,Ltd. (Hangzhou, China)	Manufacturing facilities for steering systems	4,243	Apr. 2012	Mar. 2014	Increasing production capacity
Hefei NSK Co., Ltd. (Hefei, China)	Manufacturing facilities for automotive bearings and ball bearings for general use	4,043	Apr. 2012	Mar. 2014	Increasing production capacity
NSK-Yagi Precision Forging (Zhangjiangang) Co., Ltd. (Zhangjiagang, China)	Manufacturing facilities for automotive bearings and ball bearings for general use	1,974	Apr. 2012	Mar. 2014	Increasing production capacity
NSK Korea Co., Ltd. (Changwon, Korea)	Manufacturing facilities for automotive bearings and ball bearings for general use	3,036	Apr. 2012	Mar. 2014	Reorganizing production and streamlining operations
NSK-ABC Bearings Ltd. (TamilNadu, India)	Manufacturing facilities for automotive bearings	790	Apr. 2012	Mar. 2014	Increasing capacity
Rane NSK Steering Systems Ltd. (TamilNadu, India)	Manufacturing facilities for steering systems	905	Apr. 2012	Mar. 2014	Increasing capacity