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2011 FACTS AND FIGURES

VIEWS: 15 PAGES: 21

  • pg 1
									2011
MESSAGE FROM THE PRESIDENT




                                                                   President Naoyuki Kotake

                                    Industry in Japan requires the creation of new growth strategies
                                 to incorporate developing markets of emerging countries into its
                                 mechanism, while driving the expansion of the Japanese
                                 economy. In such a period of change, Nitto Kohki designs growth
                                 strategies based on its strengths in technology and makes constant
                                 unflagging efforts to develop and expand its business as a manu-
                                 facturing company. In accordance with our corporate philosophy,
                                 “Innovation insures our company’s progress and prosperity,” we
                                 promote innovation (creative changes) in technology, marketing
                                 and human resource development, securing sustainable growth.
                                    We are currently active in four distinct business sectors: (1) The
                                 production and marketing of over 25,000 types of couplings
                                 (trademark: “CUPLA”); (2) “Atra” drill processing tools for steel
                                 products, “Jet Chisel” welding spatter removal tools, “Delvo”
                                 electric screwdrivers and other outstanding machine tools; (3)
                                 linear pumps and other types of pumps and their applications; and
                                 (4) door-closers and other building hardware. Each of our
                                 products enjoys a high level of brand power around the world, and
                                 the company remains a leading manufacturer in couplers and other
                                 niche markets.
                                     Nitto Kohki also positively supports the environment, and the
                                 head office as well as domestic and international affiliates has
                                 already been ISO14001 certified. Along with the green procure-
                                 ment of materials, parts and components, the company serves as
                                 the driving force of the evolution of eco-friendly applications as
                                 illustrated by couplings for fuel cells and wind generators, in
                                 addition to Delvo electric screwdrivers that do not generate dust
                                 particles. Also with the aging of society in view, the company has
                                 a comprehensive lineup of products such as pumps and their
                                 applications for medical and health equipment and door closers
                                 for sliding doors suitable for welfare institutions and hospitals.
                                     With management based on "product development that addresses
                                 today’s needs" and "highly trustworthy and reliable technology,"
                                 our enterprises and products enjoy high customer satisfaction.
                                 Along with this, the quality of the marketing services we provide
                                 each and every customer through Nitto-kai, our national sales and
                                 marketing organization, have garnered us the highest reputation in
                                 the machine tools world for customer satisfaction.
                                     Nitto Kohki is committed to enhancing its corporate value by
                                 aggressively addressing the challenge of better corporate gover-
                                 nance that strengthens the company’s social contribution and
                                 trust.




                             1
      Mobilizing Creative Product
   Development to Raise the Caliber of
            Corporate Value




CONTENTS
           FINANCIAL HIGHLIGHTS                                      3
           MARKET TRENDS                                             4
           BUSINESS OUTLINE AND REVIEW OF OPERATIONS                 5
           R&D, PRODUCTION, SALES AND OVERSEAS ACTIVITIES            7
           CONSOLIDATED BALANCE SHEETS                               9
           NON-CONSOLIDATED BALANCE SHEETS                          11
           CONSOLIDATED AND NON-CONSOLIDATED STATEMENTS OF INCOME   13
           CONSOLIDATED STATEMENTS OF CASH FLOWS                    14
           PROFITABILITY AND STABILITY                              15
           PRODUCTIVITY                                             16
           PER SHARE DATA                                           17
           OPERATIONAL CHART                                        18
           CORPORATE DATA                                           19




                              2
                                               FINANCIAL HIGHLIGHTS




Net Sales                           Operating Income and                                                             Total Assets and Net
(Consolidated)                      Ordinary Income                      Net Income and Net                          Assets (Consolidated)
                                    (Consolidated)                       Income to Net Sales
                                                                         (Consolidated)
       ¥100 Million                         ¥100 Million                             ¥100 Million                            ¥100 Million
                                                                                                             %
350                                  60                                  40                                 20       500


300
                                     50
                                                                                                                     400
                                                                         30                                 15
250
                                     40
                                                                                                                     300
200

                                     30                                  20                                 10

150
                                                                                                                     200
                                     20
100
                                                                         10                                 5
                                                                                                                     100
                                     10
 50



  0                                   0                                   0                                 0          0
      07   08   09    10   11             07   08     09   10   11              07     08   09   10   11                     07   08    09      10   11

                                                Operating Income                            Net Income                            Total Assets
                                                Ordinary Income                Net Income to Net Sales                            Net Assets




       Consolidated                                                                                                                            ¥ Million

                                 End of Fiscal Year                  2007/3             2008/3             2009/3          2010/3              2011/3

                                 Net Sales                           30,073             31,019             24,220          19,184              22,633
                                 Operating Income                     5,819              5,866              3,013             874               2,816
                                 Ordinary Income                      5,853              5,942              3,111           1,047               2,904
                                 Net Income                           3,061              3,535              1,722             602               1,596
                           (%)   Net Income to Net Sales (%)           10.2               11.4                 7.1             3.1                 7.1
                                 Total Assets                        45,561             46,037             41,047          41,411              44,220
                                 Net Assets                          38,294             38,472             36,187          36,394              37,058



       Non-Consolidated                                                                                                                        ¥ Million

                                 End of Fiscal Year                  2007/3             2008/3             2009/3          2010/3              2011/3

                                 Net Sales                           25,026             25,959             21,524          16,304              19,694
                                 Operating Income                     4,083              4,021              1,937             215               1,400
                                 Ordinary Income                      4,468              4,417              2,331             542               1,716
                                 Net Income                           2,332              2,706              1,371             393               1,010
                                 Net Income to Net Sales (%)             9.3              10.4                 6.4             2.4                 5.1
                                 Total Assets                        38,291             37,994             35,160          35,129              36,812
                                 Net Assets                          33,729             33,310             32,532          32,095              32,734




                                                                     3
                                                                  MARKET TRENDS



                                                                                                                                           Index of Industrial Production

                                                                                                                   120
                                                                                                                                                                          109
                                                                                                                   110
                                                                                                                            100           103
                                                                                                                   100
                                                                                                                                                              91
                                                                                                                    90                                 87


                                                                                                                    80
                                                                                                                             06            07          08     09             10
                                                                                                                                                                              (FY)
                                                                                                                    Source: Ministry of Economy, Trade and Industry


     Nitto Kohki belongs to the machinery industry in a broad sense, thus our performance is affected by factors
such as the Index of Industrial Production (a macroeconomic index) as well as variations in orders received for                      Orders Received for Machinery
machinery. However, since the users of our products belong to a diverse range of industries, it is difficult to
predict demand by comparing indices or fluctuations in specific industries.                                                                                           ¥ Trillion
                                                                                                                    15
     Demand for Cupla, one of our main products, is greatly influenced by trends in hydraulic and pneumatic
equipment production. According to the Japan Fluid Power Association, the shipment value for hydraulic                      11.6          11.3
equipment in fiscal 2010 was 349 billion yen, a significant increase (58.2%) compared with the preceding year.                                         9.7
                                                                                                                    10                                                       8.4
The reasons for this highly positive change include upward momentum toward the slow but steady recovery of                                                     7.7
the Japanese economy, and the continuing favorable conditions for construction machinery—comprising
approximately 40% of the demand for hydraulic equipment—caused by increased resource development                     5
throughout the world. Further recovery, focused on foreign consumption, is predicted for construction
machinery and machine tools in fiscal 2011, and shipment value is projected to amount to 394.9 billion
yen, an increase of 13.2% over the preceding year.                                                                   0
     The shipment value of pneumatic equipment was 311.7 billion yen in fiscal 2010, a significant increase of              06            07          08       09            10
58.1% compared with the preceding year. This resulted from the gentle yet constant recovery of the Japanese                                                                   (FY)
industrial world as a whole, influenced by demand from emerging nations. In fiscal 2011, the shipment value is      Private demand (excl. those for ships and from electric power
projected to amount to 324.9 billion yen, an increase of 4.2% over the preceding year, due to the steady            companies, with seasonal adjustments)
performance of exports including those for general machinery (one of our leading product types).
       Cupla is highly evaluated for its simple and reliable connection and disconnection mechanism, and in         Source: Cabinet Office
addition to hydraulic and pneumatic equipment, it is used on chemical, gas and coolant pipes.

                                                    Forecasted Demand for Hydraulic Equipment by Sector                                                               ¥ Million
                                                                                2010 result                          2011 forecast                             2014 forecast

                                                                            Change from previous                   Change from previous         Shipment     Change from previous
                                                              Shipment         fiscal year (%)       Shipment         fiscal year (%)                           fiscal year (%)

                           Construction machinery            133,612                 81.1            148,500                11.1                 188,190               8.7
                           Agricultural machinery              6,050                 16.0              6,200                 2.5                   6,240               0.8
                           Plastic-process machinery           5,550                 53.3              5,450                 1.8                   5,670               3.7
                           Machine tools                      16,885                 59.9             23,960                41.9                  25,760               2.0
                           Rolling machinery                   4,986                 24.9              5,100                 2.3                   6,150              17.8
                           Other metal machinery               8,189                 22.3              9,100                11.1                   8,920               0.4
                           Automobiles                         5,073                 31.1              4,680                 7.7                   5,330               4.9
                           Industrial vehicles                10,110                 36.3             10,720                 6.0                  10,460               0.9
                           Shipping                           12,151                  2.5             11,350                 6.6                  11,380               3.3
                           Others                            146,347                 62.2            169,800                16.0                 206,500               5.1
                           Total                             348,953                 58.2            394,860               13.2                  474,600               6.0
                                                                                            Notes: The FY2014 forecasts are based on macro predictions and should be used as
                                                                                                    reference values only.
                                                                                            Source: Japan Fluid Power Association




                                                       Forecasted Demand for Pneumatic Equipment by Sector                                                              ¥ Million
                                                                                2010 result                          2011 forecast                             2014 forecast

                                                                            Change from previous                   Change from previous                      Change from previous
                                                             Shipment          fiscal year (%)       Shipment         fiscal year (%)           Shipment        fiscal year (%)

                           Food processing                      2,238                49.8              2,255                                      2,320
                           Ceramics                            16,677                47.6             18,160                                     17,730
                           Steel products                       7,344                50.4              7,500                                      7,700
                           Metal products                      10,448                52.5             10,500                                     10,710
                           General machinery                   66,538                48.3             68,500                                     69,060
                           Electric machinery                  14,156                47.4             15,000                                     15,330
                           Transport machinery                 11,687                48.7             12,960                                     13,070
                           Precision machinery                  5,814                35.7              6,100                                      6,050
                           Construction                         4,290                48.9              4,700                                      4,430
                           Others                             172,548                67.3            179,200                                    181,650
                           Total                              311,740                58.1            324,875                 4.2                328,050                7.0
                                                                                            Notes: The FY2014 forecasts are based on macro predictions and should be used as
                                                                                                    reference values only.
                                                                                            Source: Japan Fluid Power Association

                                                                                        4
                       BUSINESS OUTLINE AND
                       REVIEW OF OPERATIONS




Share of Total Sales
(Consolidated)                   8.3%


                         16.4%
                                               39.3%
                                  Year ended
                                  March 31,            Couplings
                                    2011

                                                       Machine Tools
                             36.0%
                                                       Linear Pumps


                                                       Door Closers




                                        5
                                                BUSINESS OUTLINE AND
                                                REVIEW OF OPERATIONS



                                                ¥100 Million
Sales Breakdown                       350
(Consolidated)
                                      300

                                      250
                                                                                                                               Couplings
                                      200

                                      150                                                                                      Machine Tools

                                      100
                                                                                                                               Linear Pumps
                                        50

                                         0                                                                                     Door Closers
               ¥ Million                            07          08               09            10             11

                           End of Fiscal Year     2007/3       2008/3          2009/3         2010/3        2011/3
                           Total Sales            30,073       31,019          24,220         19,184        22,633
                             Couplings            11,035       11,178           9,194          6,686         8,901
                             Machine Tools        12,274       13,004           9,826          7,325         8,141
                             Linear Pumps          4,857        4,742           3,230          3,296         3,704
                             Door Closers          1,905        2,094           1,969          1,876         1,886


Couplings (trademark: CUPLA)                                                Machine Tools
     Fluid couplings are indispensable in providing connections                  Nitto Kohki’s machine tools are used in various industrial
in systems that involve the flow of air, water, oil or gas. Having          sectors, including construction, shipbuilding and metal working.
pioneered Japan’s first couplings for chloro-fluorocarbon gases,            These tools satisfy needs for improved efficiency and labor-saving
Nitto Kohki is a leading company in the field of one-touch, easy-           automation in work such as scaling, chipping, sanding, grinding,
to-open fluid couplings. Building on this position of strength,             filing, cutting, drilling and chamfering. This product group
the company has worked to expand into new fields and develop                accounts for about 36% of the company’s total sales. Sales of supplies
new applications for these products. Nitto Kohki couplings are              such as cutters and needles generate a third of the company’s sales
distinguished by their safe and easy one-hand connection and                in this business field, representing a stable source of revenue.
disconnection, enabling superior operability, and by their built-in              Machine tools are classified according to power source:
automatic open and shut valve, providing easy flow control and              pneumatic, electric and hydraulic. Driven by compressed air,
realizing a perfect seal.                                                   pneumatic tools have the benefit of compactness and light weight,
     To meet diverse needs for couplings for applications in the            high torque design, non-susceptibility to overloading, and easy
home as well as in the factory piping, medical, biotechnology,              control of speed and power. Electric machine tools are versatile and
nuclear, semiconductor and computer fields, Nitto Kohki offers a            convenient because they can be used anywhere, running off an AC
full product line-up comprising some 25,000 individual models.              power source or battery. Nitto Kohki’s Atra series (drills for steel
This abundant line-up, backed by a powerful sales network,                  products) are noted for their combination of sophisticated electric
industry-leading precision engineering and excellent quality, has           drill and electromagnetic technology. Electric screwdrivers
enabled Nitto Kohki couplings to capture an unrivaled position in           (trademark: Delvo) achieve high-precision torque control. They are
the Japanese market in terms of both customer loyalty and market            used worldwide at assembly worksites for precision device. By
share. Couplings are the company’s main products, representing              exploiting the advantages of hydraulic power, Nitto Kohki has
about 40% of total sales.                                                   introduced a series of safe and compact hydraulic tools that can be
                                                                            used for a variety of processes for steel.

Linear Pumps                                                                Door Closers
     Nitto Kohki in 1973 became the first company in the world                   The Auto Hinges (trademark) door-closers, which automatically
to commercialize “linear” compressors. Since then, these products           close open doors and feature a strong, light and compact design,
have become commonplace in the air compressors and vacuum                   contribute to a tidy and attractive interior. They are widely used in
pumps incorporated in various types of equipment. They can be               various settings including office buildings, residential housing,
found in many fields, including housing, health care, hair and              telephone booths, and bullet train carriages. Recently, the Sliding
beauty care, and food processing. The company’s linear pumps                Door Closers, which can be used for creating barrier-free environments
have won a strong following in worldwide markets. They are                  for senior citizens, are attracting attention, and demand is expected to
distinguished by their unique linear-motor-driven free piston               increase for these products, particularly for hospitals.
system, in which an electromagnet and return spring alternately
drive the pistons inside the cylinders, as well as by their
compact composite structure, low-noise, low-vibration, oil-free,
power-saving construction.
     Nitto Kohki added piezoelectric pumps “Bimor pump” and
“Unimor pump”,diaphragm pumps, and DC pumps to the list of vacum
pumps and air compressors to expand its product lineup.


                                                                        6
                            R&D, PRODUCTION, SALES AND
                               OVERSEAS ACTIVITIES


                          ¥100 Million                       (%)



                     10                                      5
R&D Expenses and
R&D Expenses to
Net Sales                                                    4
                      8
(Non-Consolidated)


                      6                                      3



                      4                                      2



                      2                                      1

                                                                   R&D Expenses
                      0                                      0
                              07         08   09   10   11
                                                                   R&D Expenses to Net Sales




                                              7
                                       R&D, PRODUCTION, SALES AND
                                          OVERSEAS ACTIVITIES


                                    ¥100 Million                                                                (%)
                            350                                                                                  35
Domestic
and Overseas
Segmentation                300                                                                                  30
(Consolidated)
                            250                                                                                  25


                            200                                                                                  20


                            150                                                                                  15


                            100                                                                                  10

                                                                                                                          Domestic
                             50                                                                                  5

                                                                                                                          Overseas
                              0                                                                                  0
                                         07            08              09             10            11                    Overseas Ratio




Research & Development                                                      Sales & Marketing
     The R&D activities of the Nitto Kohki Group are conducted                    The nationwide sales and marketing activities of the Nitto
primarily by the parent company, Nitto Kohki Co., Ltd. Tapping              Kohki Group are based largely on the powerful “Nitto-kai” network
technical expertise in fluid, precision, electronics engineering and        of 6,000 distributors, authorized dealers and other stores. For the
material engineering Nitto Kohki is developing unique products              company’s main products, the Nitto-kai sales and distribution system
targeting applications ranging from labor-saving equipment to               is organized by industry and region. By implementing and upgrading
environmental and welfare devices. The company’s key tenet, that            this system, the company has been able to reduce costs substantially
“Innovation insures our company’s progress and prosperity,” has             by outsourcing functions such as the management of product
proven extremely successful in the marketplace. Guided by this              distribution processes and account collection. At the same time, the
thinking, Nitto Kohki is actively developing products that                  company is able to carry out flexible sales and marketing strategies
contribute to society. Annual R&D expenditures amount to                    in concert with other Nitto-kai members. The system also fulfills a
more than 3% of net sales.                                                  crucial role as a broad-based antenna, identifying and reporting on
     These products have earned a solid reputation among customers          the latest market needs.
and captured high shares of their respective markets. Various                     Among the above, the sales of linear products in the domestic
government awards attest to their excellence.                               market is dealt with by Medo Industries Co., Ltd., while marketing
     Nitto Kohki has compiled a distinctive technology database to          subsidiaries in each region deal with sales overseas.
manage company intellectual property as well as global technical                  In addition, the products Nitto Kohki makes necessitate the
information. This database is a strategic asset in the company’s            availability of quality after-sales service to customers. Nitto-kai
knowledge-intensive industries. Nitto Kohki has patents in Japan,           includes a nationwide network of 76 service centers to provide
and owns various industrial property rights.                                quick, convenient customer service.


Production                                                                  Overseas Activities
     Since its inception, Nitto Kohki Group has promoted the                     With the Singapore branch and the European, U.S. and
internal development of automated equipment to streamline                   Australian sales subsidiaries as core outposts, Nitto Kohki is
production. Particular emphasis is put on the labor-saving                  expanding its sales globally through a network of sales and service
automation of machine processing and assembly lines. To respond             agents.
flexibly to shifting market demand and changes in the business                   Five overseas production bases have been established with
environment, the company has fostered a network of subsidiaries.            the goal of improving international price competitiveness. Linear
     Nitto Kohki’s high-speed coupling connections and linear               products are being manufactured in Thailand and a coupling factory
power pumps are produced at the Ujiie Plant (Tochigi Nitto Kohki            was established in July 2002 and is set to go on-line in the spring of
Co., Ltd.; machine tool products are manufactured at Medotech Co.,          2003. Hole-cutters are manufactured in Australia. In South Korea,
Ltd.; and electric drivers and door closers at Shirakawa Nitto Kohki        Nitto Kohki established a joint company to produce machine tools in
Co., Ltd.). Each of these facilities operates under an integrated           December 2001 and operations began at the factory in January 2002.
system responsible for everything from materials processing to              We also purchased a machine tools maker in Britain in March 2002.
final checks. Each plant carries out all phases of production, from              In these ways Nitto Kohki is steadily expanding its overseas
material processing and assembly to inspection of the finished              operations.
products.



                                                                       8
                                                  CONSOLIDATED
                                                 BALANCE SHEETS


                                                                                                       ¥ Million

                               End of Fiscal Year                                    2009/3   2010/3   2011/3
                               Assets
                               Current Assets:
                                   Cash and Deposits                                 15,903   17,689   17,238
                                   Notes Receivable and Accounts Receivable, Trade    5,204    4,770    5,581
                                   Marketable Securities                              1,199      —      2,999
                                   Inventories                                        5,075    4,559    4,341
                                   Deferred Tax Assets                                 612      569       696
                                   Other                                               574      445       228
                                   Allowance for Doubtful Accounts                     (11)     (13)      (12)
                                 Total Current Assets                                28,558   28,022   31,073
                               Fixed Assets:
                                 Tangible Fixed Assets                               10,370   11,206   10,858
                                   Buildings and Structures                           4,424    5,622    5,450
                                   Machinery and Vehicle Equipment                     596      541       568
                                   Tools, Furniture, Fixtures and Others               664      587       485
                                   Land                                               4,104    4,094    4,072
                                   Leased Assets                                       112      168       245
                                   Construction in Progress                            467      192         35
                                 Intangible Fixed Assets                               132      161       147
                                 Investments and Other Assets                         1,985    2,021    2,141
                                   Investments in Securities                           927     1,017    1,020
                                   Long-term Loans                                     240      204       178
                                   Deferred Tax Assets                                 521      565       707
                                   Other                                               311      250       250
                                   Allowance for Doubtful Accounts                     (14)     (16)      (15)
                                 Total Fixed Assets                                  12,488   13,389   13,147
                               Total Assets                                          41,047   41,411   44,220


(Note) Numbers in parentheses ( ) indicate negative numbers.




                                                               9
                                                                                                          ¥ Million

                               End of Fiscal Year                                       2009/3   2010/3   2011/3
                               Liabilities
                               Current Liabilities:
                                    Notes Payable and Accounts Payable, Trade           1,673     1,660    1,948
                                    Lease Payables                                         19       34         54
                                    Income Taxes Payable                                   —        39     1,115
                                    Accrued Bonuses                                       614      549        526
                                    Accrued Directors’ Bonuses                              8       —          12
                                    Other                                                 955      880     1,111
                                  Total Current Liabilities                             3,271     3,163    4,768
                               Long-term Liabilities
                                    Lease Payables                                         93      133        191
                                    Allowances        Retirement Benefits               1,260     1,387    1,681
                                    Allowances        Directors’ Retirement Benefits      126      145        168
                                    Other                                                 100      185        188
                                  Total Long-term Liabilities                           1,588     1,853    2,229
                               Total Liabilities                                        4,859     5,017    6,998




                                Net Assets
                                Shareholders’ Equity
                                  Common Stock                                          1,850     1,850    1,850
                                  Capital Surplus                                       1,925     1,925    1,925
                                  Retained Earnings                                    34,393    34,146   35,371
                                  Treasury Stock                                        (915)     (916)    (916)
                                Total Shareholders’ Equity                             37,254    37,006   38,231
                                Valuation and Translation Adjustments
                                  Unrealized Holding Gains on Securities                  103      123        123
                                  Translation Adjustment                               (1,326)    (908)   (1,296)
                                Total Valuation and Translation Adjustments            (1,223)    (785)   (1,172)
                                Minority Interest                                         156      173        163
                                Total Net Assets                                       36,187    36,394   37,222
                                Total Liabilities and Net Assets                       41,047    41,411   44,220



(Note) Numbers in parentheses ( ) indicate negative numbers.




                                                                10
                                                NON-CONSOLIDATED
                                                 BALANCE SHEETS


                                                                                                 ¥ Million

                                End of Fiscal Year                             2009/3   2010/3   2011/3
                                Assets
                                Current Assets:
                                    Cash and Deposits                          11,262   12,416   11,120
                                    Notes Receivable                            2,636    1,659    2,043
                                    Accounts Receivable, Trade                  2,046    2,698    3,108
                                    Marketable Securities                       1,199      —      2,999
                                    Inventories                                 2,839    2,304    2,034
                                    Short-term Loans-subsidiaries                240      190         50
                                    Deferred Tax Assets                          221      210       284
                                    Other                                        497      415       175
                                  Total Current Assets                         20,943   19,895   21,816
                                Fixed Assets:
                                  Tangible Fixed Assets                         7,181    8,076    7,837
                                    Buildings and Structures                    3,251    4,523    4,445
                                    Machinery and Vehicle Equipment               24       17         12
                                    Tools, Furniture, Fixtures and Equipment     562      503       418
                                    Land                                        2,876    2,857    2,857
                                    Leased Assets                                 —        47         70
                                    Construction in Progress                     466      126         33
                                  Intangible Fixed Assets                        105      137       127
                                  Investments and Other Assets                  6,930    7,020    7,030
                                    Investments in Securities                    927     1,017    1,020
                                    Investments in Subsidiaries                 5,117    5,117    5,119
                                    Long-term Loans                              329      366       293
                                    Deferred Tax Assets                          327      338       410
                                    Other                                        244      196       202
                                    Allowance for Doubtful Accounts              (14)     (16)     (15)
                                  Total Fixed Assets                           14,217   15,234   14,995
                                Total Assets                                   35,160   35,129   36,812


(Note) Numbers in parentheses ( ) indicate negative numbers.




                                                                11
                                                                                                      ¥ Million
                                End of Fiscal Year                                  2009/3   2010/3   2011/3
                                Liabilities
                                Current Liabilities:
                                    Notes Payable and Accounts Payable                 619      920      887
                                    Lease Payable                                       —         9       17
                                    Income Taxes Payable                                —        —       787
                                    Accounts Payable, other and Accrued Expenses       605      536      568
                                    Accrued Bonuses                                    404      362      343
                                    Accrued Directors’ Bonuses                           8       —        12
                                    Other                                               68       59      128
                                  Total Current Liabilities                          1,706    1,888    2,746
                                Long-term Liabilities
                                    Lease Payable                                       —        37       52
                                    Allowances for Retirement Benefits                 712      785      936
                                    Allowances for Directors’ Retirement Benefits      112      145      168
                                    Other                                               96      177      173
                                  Total Long-term Liabilities                          921    1,145    1,331
                                Total Liabilities                                    2,627    3,033    4,077




                                Net Assets
                                Shareholders’ Equity
                                 Common Stock                                        1,850    1,850    1,850
                                 Capital Surplus
                                    Capital Reserve                                  1,925    1,925    1,925
                                 Total Capital Surplus                               1,925    1,925    1,925
                                 Retained Earnings
                                    Legal Reserve                                     462      462       462
                                    Other Retained Earnings
                                      Reserve for Interim Dividends                      0        0        0
                                      Equalizing Dividends                             220      220      220
                                      Voluntary Reserve                             27,300   27,800   27,800
                                      Earned Surplus Brought Forward                 1,585      630    1,267
                                 Total Retained Earnings                            29,569   29,112   29,751
                                 Treasury Stock                                      (915)    (916)    (916)
                                Total Shareholders’ Equity                          32,429   31,972   32,610
                                Valuation and Translation Adjustments
                                 Unrealized Holding Gains on Securities                103      123      123
                                Total Valuation and Translation Adjustments            103      123      123
                                Total Net Assets                                    32,532   32,095   32,734
                                Total Liabilities and Net Assets                    35,160   35,129   36,812

(Note) Numbers in parentheses ( ) indicate negative numbers.




                                                               12
                            CONSOLIDATED AND
                   NON-CONSOLIDATED STATEMENTS OF INCOME


Consolidated                                                                                                  ¥ Million
                    End of Fiscal Year                                           2009/3         2010/3         2011/3

                    Net Sales                                                    24,220        19,184         22,633
                    Cost of Sales                                                12,571        10,407         12,006
                    Gross Profit                                                 11,648         8,777         10,627
                    Selling, General and Administrative Expenses                  8,635         7,903          7,810
                    Operating Income                                              3,013           874          2,816
                    Non-Operating Income                                            310           244            205
                    Non-Operating Expenses                                          213            71            117
                    Ordinary Income                                               3,111         1,047          2,904
                    Extraordinary Income                                              0             1              4
                    Extraordinary Losses                                            186            78            188
                    Income before Income Taxes                                    2,925           970          2,719
                    Income Taxes-current                                          1,006           339          1,384
                    Income Taxes-deferred                                           185            24          (268)
                    Minority Interest                                                10             2              7
                    Net Income                                                    1,722           602          1,596



                    Changes in Capital Structure
                                                        Allowance of shares to third parties (80,000 shares, ¥1,200)
                                                        Allowance of shares to third parties (103,000 shares, ¥6,000)
                                                        Stock split (1     2 shares)
                                                        Stock split (1       2 shares)
                                                        Allowance of shares by public offering (950,000 shares, ¥2,760)
                                                        Stock split (1     1.1 shares)
                                                        Stock split (1     1.1 shares)
                                                        Stock split (1     1.2 shares)
                                                        Repurchase and retirement of shares (429,100 shares)
                                                        Repurchase and retirement of shares (1,200,000 shares)
                                                        Repurchase and retirement of shares (125,000 shares)
                                                        Repurchase and retirement of shares (959,200 shares)
                                                        Repurchase and retirement of shares (328,500 shares)
                                                        Repurchase and retirement of shares (886,500 shares)


Non-Consolidated                                                                                              ¥ Million

                     End of Fiscal Year                                         2009/3         2010/3         2011/3
                     Net Sales                                                  21,524        16,304         19,694
                     Cost of Sales                                              12,397         9,650         11,888
                     Gross Profit                                                9,126         6,654          7,805
                     Selling, General and Administrative Expenses                7,189         6,439          6,404
                     Operating Income                                            1,937           215          1,400
                     Non-Operating Income                                          523           405            423
                     Non-Operating Expenses                                        128            77            108
                     Ordinary Income                                             2,331           542          1,716
                     Extraordinary Income                                           31             0              1
                     Extraordinary Losses                                          162            46             27
                     Income before Income Taxes                                  2,201           496          1,690
                     Income Taxes                                                  601            79            819
                     Income Tax Adjustment                                         229            24          (138)
                     Net Income                                                   1,371           393          1,010




                                                   13
                                   CONSOLIDATED STATEMENTS OF
                                          CASH FLOWS


                                                                                                                             ¥ Million
                                         End of Fiscal Year                                             2009/3     2010/3     2011/3
I                                        Cash Flows from Operating Activities
                                            Income before Income Taxes                                    2,925       970      2,719
                                            Depreciation and Amortization                                   967       958        970
                                            Change in Provisions                                           (27)         80       296
                                            Change in Assets                                              2,793     1,287      (776)
                                            Change in Liabilities                                         (845)      (24)        583
                                            Others                                                           70      (87)       (25)
                                            Sub Total                                                     5,883     3,184      3,768
                                            Interest and Dividends Received                                 195       106         93
                                            Interest Paid                                                    (1)       (1)        (0)
                                            Income Taxes Paid                                           (2,291)     (360)      (119)
                                         Net Cash Provided by Operating Activities                        3,785     2,929      3,742

                                         Cash Flows from Investing Activities
                                            Increase in Time Deposits                                   (6,349) (24,240) (24,571)
                                            Decrease in Time Deposits                                     5,765   17,538 24,286
                                            Payment for Purchases of Fixed Assets                       (2,063) (1,652)     (512)
                                            Net Decrease in Loans                                            19       35       25
                                            Others                                                        (264)     (98)     (51)
                                         Net Cash Used in Investing Activities                          (2,891) (8,416)     (823)

                                         Cash Flows from Financing Activities
                                            Payment for Purchases of Treasury Stock                       (913)       (0)        (0)
                                            Dividend Paid                                               (1,090)     (846)      (372)
                                            Others                                                         (19)      (22)       (45)
                                         Net Cash Used in Financing Activities                          (2,023)     (869)      (418)

                                         Effect of Exchange Rate Changes on Cash and Cash Equivalents   (1,108)       242      (237)

                                         Net Increase (Decrease) in Cash and Cash Equivalents           (2,238)    (6,114)     2,262

                                         Cash and Cash Equivalents at the Beginning of the Year         15,275     13,036      6,922

                                         Cash and Cash Equivalents at the End of the Year               13,036      6,922      9,185


(Note) Numbers in parentheses ( ) indicate negative numbers.




                                                                 14
                                                    PROFITABILITY AND STABILITY




                                                                                                                                Total Assets Turnover
              Gross Profit to Net Sales and                             Return on Assets and                                    (Consolidated)
              Operating Income to Net Sales                             Return on Equity
              (Consolidated)                                            (Consolidated)

             (%)                                                       (%)                                                            Times
              60                                                       15                                                       1.0



              50
                                                                                                                                0.8


              40                                                       10
                                                                                                                                0.6

              30

                                                                                                                                0.4
              20                                                         5


                                                                                                                                0.2
              10



               0                                                         0                                                        0
                     07    08    09     10    11                              07     08    09    10    11                               07       08     09   10   11



                    Gross Profit to Net Sales                                Return on Assets

                    Operating Income to Net Sales                            Return on Equity




                                        End of Fiscal Year                                         2007/3            2008/3              2009/3              2010/3    2011/3
                                        Gross Profit to Net Sales (%)                                 49.3             48.5                  48.1             45.8      47.0
                                        Operating Income to Net Sales (%)                             19.4             18.9                  12.4              4.6      12.4
                                        Return on Assets (%)                                          13.4             13.2                   7.4              2.4       6.6
                                        Return on Equity (%)                                           8.3              9.2                   4.6              1.7       4.4
                                        Dividends on Equity (%)                                        3.1              2.3                   2.9              2.3       1.0
                                        Shareholders’ Equity Ratio (%)                                83.5             83.6                  87.8             87.5      83.8
                                        Total Assets Turnover (Times)                                  0.67             0.68                  0.56             0.47      0.53




Notes: Return on Assets = (Operating Income + Interest and Dividend Income)/Total Assets (Average of the beginning and end of the fiscal year)        100
       Return on Equity = Net Income/Shareholders’ Equity (Average of the beginning and end of the fiscal year)   100
       Dividends on Equity = Total Cash Dividends/Shareholders’ Equity (Average of the beginning and end of the fiscal year)   100
       Total Assets Turnover = Net Sales/Total Assets (Average of the beginning and end of the fiscal year)




                                                                                          15
                                                 PRODUCTIVITY




                                                                                                       Depreciation and
Net Sales per Employee and                  Capital Expenditure and Capital                            Amortization (Consolidated)
Net Income per Employee                     Expenditure to Net Sales Ratio
(Consolidated)                              (Consolidated)

          ¥ Million                                       ¥100 Million               (%)                           ¥100 Million

40                                           25                                      10               10




                                             20                                      8                 8
30



                                             15                                      6                 6

20

                                             10                                      4                 4



10
                                                 5                                   2                 2




 0                                               0                                   0                 0
     07   08   09     10   11                           07    08   09      10   11                            07     08   09      10   11



 Net Sales per Employee                              Capital Expenditure

 Net Income per Employee                             Capital Expenditure to Net Sales Ratio




                            End of Fiscal Year                                             2007/3   2008/3         2009/3         2010/3    2011/3
                            Net Sales per Employee (¥ Thousand)        29,953                       30,322         23,815      19,417       23,381
                            Net Income per Employee (¥ Thousand)        3,048                        3,455          1,693         610        1,649
                            Number of Employees at Fiscal Year-End      1,004                        1,023          1,017         988          968
                            Capital Expenditure (¥ Million)               884                        2,134          2,157       1,802          684
                            Capital Expenditure to Net Sales Ratio (%)     2.9                          6.9            8.9         9.4          3.0
                            Depreciation and Amortization (¥ Million)     928                          934            975         973          985




                                                                   16
                                           PER SHARE DATA




Net Income per Share                       Net Assets per Share                              Dividend per Share and
(Consolidated)                             (Consolidated)                                    Payout Ratio
                                                                                             (Consolidated)

      ¥                                            ¥                                                ¥

200                                        2,000                                             50                                 110




                                                                                             40                                 100
150                                        1,500



                                                                                             30                                 80

100                                        1,000

                                                                                             20                                 60



 50                                         500
                                                                                             10                                 40




  0                                           0                                               0                                 20
      07   08   09   10   11                           07   08   09   10   11                        07   08     09   10   11



                                                                                                  Dividend per Share

                                                                                                  Payout Ratio




                      End of Fiscal Year                              2007/3        2008/3          2009/3             2010/3         2011/3
                 Net Income per Share (¥)         135.43                            159.26      79.76      28.37      75.15
                 Net Assets per Share (¥)       1,682.92                          1,764.65   1,695.64   1,704.63 1,736.35
                 Dividend per Share (¥)            50.00                             50.00      40.00      30.00      24.00
                 Number of Shares Outstanding 22,689,795                        21,803,295 21,803,295 21,803,295 21,803,295
                 Payout Ratio (%)                   36.9                              31.4       50.2      105.7       31.9




                                                                 17
                                                           OPERATIONAL CHART




                                                                                                              Domestic manufacturer     (all products)
                                                                                          and sales company

                                                                                                                                                              Main
                                                                                          MEDO INDUSTRIES CO., LTD.                                         Japanese
                                                                        (products)                                                                          customers
                                                                                                                                       (linear products)

                                                                        (couplings)
         Domestic manufacturer


 TOCHIGI NITTO KOHKI CO.,
           LTD.
                                      (couplings and
                                    linear products)
                                                                                                                                           (products)

                                                                                            NITTO KOHKI U.S.A., INC.
                                                                        (products)
                                                                                                                                          (couplings,
                                                                                                                                        machine tools)
         Domestic manufacturer



SHIRAKAWA NITTO KOHKI CO.,                                                                       MEDO U.S.A., INC.
          LTD.                                                          (products)
                                                                                                                                       (linear products)
                                    (electric drivers
                                  and door-closers)


                                                                                              NITTO KOHKI EUROPE
                                                                                                    CO., LTD.
                                                                        (products)
          Domestic manufacturer
                                                                                                                                       (linear products,
                                                                                                                                          machine tools
                                                                                                                                         and couplings)
    MEDOTECH CO., LTD.                                    NITTO KOHKI
                                                            CO., LTD.
                                    (machine tools)                                         UNIVERSAL DRILLING &
                                                                                           CUTTING EQUIPMENT, LTD.
                                                                                                                                      (machine tools)

                                                                                                                                                           Main overseas
                                                                        (machine tools)
                                                                                                                                                            customers



 NITTO KOHKI (THAILAND)                                                                   NITTO KOHKI DEUTSCHLAND
        CO., LTD.                                                                                  GMBH
                                                                        (products)
                                      (linear products)
                                                                                                                                       (linear products,
                                                                                                                                          machine tools
                                                                                                                                         and couplings)

                                                                                          NITTO KOHKI AUSTRALIA PTY.,
                                                                                                     LTD.
                                                                        (products)

                                                                                                                                       (linear products,
                                                                                                              (machine tools)
                                                                                                                                          machine tools
  NITTO KOHKI COUPLING                                                                                                                   and couplings)
   (THAILAND) CO., LTD.
                                        (couplings)                                       AUSTRALIA MFG. PTY., LTD.

                                                                        (machine tools)




                                                                                          NITTO KOHKI MIJIN CO., LTD.
                                                                           (parts)

                                                                                                                                      (machine tools
                                                                                                                                        and electric
                                                                                                                                            drivers)
                                                                        (machine tools)




                                                                                                                                                    As of June 30, 2011

                                                                                18
CORPORATE DATA




           •Corporate Profile (As of March 31, 2011)
           Corporate Name                   NITTO KOHKI Co., Ltd.
           Head Office                      9-4, Nakaikegami 2-chome, Ota-ku,
                                            Tokyo 146-8555 Japan


           Established                      October 22, 1956
           Paid-in Capital                  ¥1,850 million
           Number of Shares Outstanding     21,803,295 shares
           Fiscal Year-end                  March 31
           Number of Employees              Non-Consolidated: 400 Consolidated: 968


           •Officers
           Board of Directors and Auditors (As of June 22, 2011)
            Chairman                        Toshio Mikiya
            President                       Naoyuki Kotake
            Vice Chairman                   Mitsuo Ichikawa
            Managing Director               Tomoo Kondo
            Director                        Yutaka Nishida
            Director                        Yasuo Nakagawa
            Director                        Yoko Takata
            Standing Statutory Auditor      Shunichi Washio
            Statutory Auditor               Teruhiko Tsuji
            Statutory Auditor               Hirohisa Kagami



           •Network
            Branch offices Osaka, Nagoya, Singapore
            Sales offices    Sapporo, Sendai, Niigata, Kitakanto, Saitama, Shizuoka,
                             Mikawa, Hokuriku, Takamatsu, Okayama, Hiroshima,
                             Fukuoka
            Other offices    Mito, Hachioji, Matsumoto, Hamamatsu,
                             Keiji, Hyogo, Kumamoto, Bangkok, Shanghai,
                             Shenzhen




      19
          NITTO KOHKI CO.,LTD.




NITTO KOHKI CO., LTD.
9-4, Nakaikegami 2-chome
Ohta-ku, Tokyo 146-8555 Japan
TEL 03-3755-1111 (main)
FAX 03-3754-3731
URL http://www.nitto-kohki.co.jp




                                   20

								
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