UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-13896

Nihon Densan Kabushiki Kaisha

(Exact name of Registrant as specified in its charter)

NIDEC CORPORATION

(Translation of Registrant’s name into English)

Japan	338 Kuzetonoshiro-cho, Minami-ku, Kyoto 601-8205 Japan
(Jurisdiction of incorporation or organization)	(Address of principal executive offices)

                    Masahiro Nagayasu, +81-75-935-6140, ir@jp.nidec.com, address is same as above                    

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock* American Depositary Shares each representing one-fourth of one share of common stock	New York Stock Exchange New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of March 31, 2012, 145,075,080 shares of common stock were outstanding, including 2,472,632 shares represented by 9,890,528 American Depositary Shares and 8,240,496 shares held in treasury.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  x International Financial Reporting Standards as issued by the International Accounting Standards Board  ¨ Other  ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

* Not for trading, but only in connection with the listing of the American Depositary Shares.

TABLE OF CONTENTS

Part I
Item 1. Identity of Directors, Senior Management and Advisers.	5
Item 2. Offer Statistics and Expected Timetable.	5
Item 3. Key Information.	6
Item 4. Information on the Company.	24
Item 4A. Unresolved Staff Comments.	45
Item 5. Operating and Financial Review and Prospects.	46
Item 6. Directors, Senior Management and Employees.	86
Item 7. Major Shareholders and Related Party Transactions.	92
Item 8. Financial Information.	94
Item 9. The Offer and Listing.	96
Item 10. Additional Information.	97
Item 11. Quantitative and Qualitative Disclosures About Market Risk.	114
Item 12. Description of Securities Other Than Equity Securities.	118
Part II
Item 13. Defaults, Dividend Arrearages and Delinquencies.	119
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.	119
Item 15. Controls and Procedures.	120
Item 16A. Audit Committee Financial Expert.	121
Item 16B. Code of Ethics.	121
Item 16C. Principal Accountant Fees and Services.	121
Item 16D. Exemptions from the Listing Standards for Audit Committees.	122
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.	123
Item 16F. Change in Registrant’s Certifying Accountant.	124
Item 16G. Corporate Governance.	124
Item 16H. Mine Safety Disclosure.	126
Part III
Item 17. Financial Statements.	126
Item 18. Financial Statements.	126
Item 19. Exhibits.	127
Index to Consolidated Financial Statements and Information.	F-1

As used in this annual report, unless otherwise specified, references to “Nidec” are to Nidec Corporation, and references to “we,” “our” and “us” are to Nidec Corporation and, except as the context otherwise requires, its consolidated subsidiaries.

As used in this annual report, “U.S. dollar” or “$” means the lawful currency of the United States of America, “yen” or “¥” means the lawful currency of Japan, “RMB” means the lawful currency of People’s Republic of China, and “MXN” means the lawful currency of the United Mexican States.

As used in this annual report, “U.S. GAAP” means accounting principles generally accepted in the United States, and “Japanese GAAP” means accounting principles generally accepted in Japan.

As used in this annual report, “ADS” means an American Depositary Share, and “ADR” means an American Depositary Receipt.

In tables appearing in this annual report, figures may not add up to totals due to rounding.

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Special Note Regarding Forward-looking Statements

This annual report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about our business, our industry and capital and financial markets around the world. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “plan” or similar words. These statements discuss future expectations, identify strategies, contain projections of results of operations or of our financial condition, or state other forward-looking information. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contained in any forward-looking statement. We cannot promise that our expectations expressed in these forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are set forth in “Risk Factors” and elsewhere in this annual report and include, but are not limited to:

• general economic conditions in the computer and other information technology, consumer electronics, industry machinery, automobile and related product markets, particularly levels of consumer spending and capital expenditures by companies;

• our ability to design, develop, mass produce and win acceptance of our products, particularly those that use the hard disk spindle motor technology, which are offered in highly competitive markets characterized by continual new product introductions and rapid technological development;

• abrupt changes in our customers’ market position, particularly as a result of mergers and acquisitions;

• our ability to acquire and successfully integrate companies with complementary technologies and product lines;

• any negative impacts on our businesses from natural or human-caused disasters and other incidents beyond our control in the countries where our manufacturing and research and development operations are concentrated, including Japan, Thailand and China;

• increase in raw material and labor costs;

• exchange rate fluctuations, particularly between the Japanese yen and the U.S. dollar and other currencies in which we make significant sales or in which our assets and liabilities are denominated; and

• adverse changes in laws, regulations or economic policies in any of the countries where we have manufacturing operations.

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PART I

Item 1. Identity of Directors, Senior Management and Advisers.

Not applicable.

Item 2. Offer Statistics and Expected Timetable.

Not applicable.

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Item 3. Key Information.

A. Selected Financial Data.

The following table includes selected historical financial data for the fiscal years ended March 31, 2008 through 2012 derived from our audited consolidated financial statements prepared in accordance with U.S. GAAP. You should read the selected financial data below in conjunction with Item 5 of this annual report and our audited consolidated financial statements which are included elsewhere in this annual report.

Selected Financial Data

	Year ended March 31,
	2008(1)			2009(1)			2010(1)			2011(1)			2012
	(Yen in millions and U.S. dollars in thousands, except number of shares outstanding and per share amounts)
Income statement data:
Net sales	¥	705,441		¥	592,794		¥	571,552		¥	675,988		¥	682,320
Cost of products sold		550,022			462,974			421,190			500,034			523,729
Selling, general and administrative expenses		48,757			50,524			46,809			55,348			55,471
Operating income		77,293			52,773			79,282			92,869			73,070
Income from continuing operations before income taxes		64,238			48,018			75,971			81,966			70,856
Net income attributable to Nidec Corporation		41,156			28,353			51,961			52,333			40,731
Balance sheet data (period end):
Total assets	¥	671,714		¥	702,884		¥	692,791		¥	748,205		¥	800,401
Short-term borrowings		68,854			221,342			115,467			52,018			86,608
Current portion of long-term debt		29,196			1,883			1,497			1,124			674
Long-term debt		3,430			2,578			1,745			101,819			101,236
Total Nidec Corporation shareholders’ equity		319,584			297,148			340,309			355,250			370,182
Common stock		66,248			66,551			66,551			66,551			66,551
Number of shares outstanding		144,987,492			145,075,080			145,075,080			145,075,080			145,075,080
Per share data:
Income from continuing operations per share—basic	¥	290.99		¥	217.39		¥	384.91		¥	406.10		¥	336.33
Loss on discontinued operations per share—basic		(6.99	)		(19.97	)		(11.87	)		(30.19	)		(40.08	)
Net income attributable to Nidec Corporation per share—basic		284.00			197.42			373.04			375.91			296.25
Income from continuing operations per share—diluted		283.08			213.79			384.91			391.96			314.41
Loss on discontinued operations per share—diluted		(6.79	)		(19.67	)		(11.87	)		(29.16	)		(37.52	)
Net income attributable to Nidec Corporation per share—diluted		276.29			194.12			373.04			362.80			276.89
Cash dividends declared per share	¥	55.00		¥	60.00		¥	65.00		¥	85.00		¥	90.00
Cash dividends declared per share(2)	$	0.55		$	0.61		$	0.70		$	1.02		$	1.10

Notes:

(1) As of December 31, 2008, we discontinued our optical pickup unit, or OPU, business which had previously been included in the “electronic and optical components” product category. As of September 30, 2009, we discontinued our semiconductor manufacturing equipment, or SME, business which had previously been included in the “machinery” category. As of March 31, 2011, we discontinued our specialty lens unit, or SLU, business which had previously been included in the “electronic and optical components” category. As of March 31, 2012, we discontinued our lens actuator, or LAC, business, which had previously been included in the “other small precision brushless DC motors” product category. As of the same date, we also discontinued our tape drive and disk drive mechanism, or PGN, businesses, and our compact digital camera lens unit, CLU, business, both of which had previously been included in the “electronic and optical components” product category. The

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operating results of the OPU, SME, SLU, LAC, PGN and CLU businesses and exit costs with related taxes were recorded as “net loss on discontinued operations” in our audited consolidated statements of income in accordance with ASC 205-20 “Presentation of Financial Statements-Discontinued Operations” (formerly SFAS No.144, “Accounting for the impairment or disposal of Long-Lived Assets”). All prior period OPU, SME, SLU, LAC, PGN and CLU amounts in the above table, except for the balance sheet data, have also been so reclassified as to enable comparisons between the relevant amounts for the fiscal years ended March 31, 2008 through 2012.

(2) U.S. dollar amounts for dividends are translated from the respective Japanese yen amounts for convenience at the exchange rate as of the end of each period.

Fluctuations in exchange rates between the Japanese yen and the U.S. dollar and other currencies will affect the U.S. dollar and other currency equivalents of the yen price of our shares and ADSs and the U.S. dollar amounts received on conversion of cash dividends. The following table presents the noon buying rates for Japanese yen per $1.00 in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for and as of the end of each period indicated.

	High		Low		Average		Period-end
Year ended March 31,
2008		124.09		96.88		114.31		99.85
2009		110.48		87.80		100.62		99.15
2010		100.71		86.12		92.93		93.40
2011		94.68		78.74		85.71		82.76
2012		85.26		75.72		78.99		82.41
Calendar period
December 2011		78.13		76.98		77.80		76.98
January 2012		78.13		76.28		76.96		76.34
February 2012		81.10		76.11		78.47		81.10
March 2012		83.78		80.86		82.47		82.41
April 2012		82.62		79.81		81.33		79.81
May 2012		80.36		78.29		79.67		78.29

As of June 1, 2012, the noon buying rate was ¥78.21 per $1.00.

B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds.

Not applicable.

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D. Risk Factors.

If any of the risks described below actually occurs, our business, financial condition or results of operations could be adversely affected.

Our customer base is highly concentrated, and our sales would suffer if one or more of our significant customers substantially reduce or cancel orders for our products.

We are dependent on a limited number of large customers for a substantial portion of our net sales. Sales to our largest customer, Western Digital Corporation, including sales to Hitachi Global Storage Technologies, which Western Digital recently acquired, were approximately 17%, 13% and 12% of our total net sales for the fiscal years ended March 31, 2010, 2011 and 2012, respectively. Sales to our second largest customer, Seagate Technology LLC, including sales to the hard disk drive, or HDD, business of Samsung Electronics Co., Ltd., which Seagate Technology recently acquired, were approximately 14%, 11% and 10% of total net sales for the fiscal years ended March 31, 2010, 2011 and 2012, respectively. Our sales to the two largest customers relate to motors used in HDDs. As a result of customer concentration, our net sales could be significantly impacted in the event of:

• a significant reduction, delay or cancellation of orders from one or more of our significant customers,

• a decision by one or more of our significant customers to select products manufactured or technologies developed by a competitor, or its own internally developed components, for inclusion in future product generations, or

• operating or financial difficulties affecting one or more of our significant customers.

We expect that, for the foreseeable future, sales to a limited number of customers will continue to account for a high percentage of our net sales. If current customers do not continue to place orders, we may not be able to replace those orders with orders from new customers, and this would significantly impact our business, operating results and financial condition.

In addition, because there are only a limited number of hard disk drive manufacturers in the world, if one or more of our customers merge with or are otherwise acquired by another hard disk drive manufacturer, our business could be adversely affected to the extent that the downward pricing pressure increases or actual or potential sales are lost as a result of the surviving manufacturer’s decision not to purchase our products.

Because of our dependence on the computer industry, our business may be adversely affected by a decline in the computer market.

A substantial portion of our net sales depends on sales of computers and computer peripherals that incorporate our products, including small precision motors. Although we have been diversifying our products and entering into new markets, such as motors for use in home appliances and automobiles, we expect to continue to derive a significant portion of our revenues from the sale of products for use in computers and computer peripherals. The markets for computers and computer peripherals are cyclical and have been characterized by:

• rapid technological change,

• emergence of new processes for or approaches to data storage,

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• frequent new product introductions and short product life cycles,

• significant price competition and price erosion,

• fluctuating inventory levels,

• alternating periods of over-capacity and capacity constraints due, in part, to cyclical and seasonal market patterns,

• variations in manufacturing costs and yields, and

• significant expenditures for manufacturing equipment and product development.

If any of the foregoing factors leads to a decline in the market for computers and computer peripherals, our net sales could decrease, and our results of operations could be materially and adversely affected.

We derive a substantial portion of our net sales from sales of spindle motors for hard disc drives, and a decrease in demand for, or prices of, HDDs could harm our business.

Net sales of spindle motors for HDDs in computers, and digital home appliances, such as DVD recorders, were 35.7%, 29.0% and 25.9% of our total net sales in the fiscal years ended March 31, 2010, 2011, and 2012, respectively. Reduced demand for, or lower prices of, HDDs could result in a decrease in our net sales, adversely affecting our results of operations.

During an economic downturn, manufacturers of HDDs may suspend or reduce purchases of additional inventory from suppliers such as us. The rate of decline in average selling price accelerates when manufacturers lower prices to absorb excess capacity, liquidate excess inventories, restructure or attempt to increase their market share.

Many of our customers implement a just-in-time inventory control system. Accordingly, we generally maintain inventory at or near our customers’ production facilities based on estimated demand. Our inventory was ¥90.4 billion at March 31, 2011 and ¥91.5 billion at March 31, 2012. A substantial amount of capital and cost is required to maintain inventory sufficient to meet orders from our customers in a timely manner. In addition, our estimates of future customer demand may prove excessive, exposing us to the risk of unsold inventory becoming obsolete and prices of our products being reduced.

Demand for HDDs may decline as a result of a shift in the computer industry to alternative storage technologies, such as solid-state drives, or SSDs. For example, demand for HDDs may decline if small portable PCs using HDDs are replaced by smart phones, tablet devices and other products, using SSDs, with functions overlapping with those of PCs. If the price per memory capacity for SSDs or other alternative technologies is reduced in the future to a level competitive with that for HDDs, demand for HDDs could decline, which in turn could result in reduced sales of our spindle motors.

HDD manufacturers recently did, and may in the future, merge or otherwise restructure their operations and, as part of their restructurings, may seek to reduce costs and inventories. Such restructurings may result in increasing downward pressure on spindle motor prices, which could reduce our margins. Our customers may also re-allocate their procurement orders to our competitors, which could reduce our sales volumes. Such restructurings or similar moves by HDD manufacturers could have a material negative impact on our results of operations.

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Because our facilities are concentrated in a limited number of locations, disruptions in one or more of those locations could have a material adverse impact on our business operations.

Our headquarters and key research and development facilities are located in Japan, and our major manufacturing facilities are located in a few countries and regions, including Thailand and China. A large number of companies in the information technology industry, including many of our customers and other companies in our and our customers’ supply chains as well as ourselves, are concentrated in those countries and regions, particularly where local governments have implemented policies designed to encourage information technology companies to relocate to their respective jurisdictions. A large-scale natural disaster or political unrest occurring in or affecting those countries or regions or other limitations of those regions could have a material adverse impact on us or the information technology industry on a global basis. The flooding that occurred in Thailand in October 2011, for example, severely disrupted our operations as well as those of our customers and other companies in the supply chains of computer and other information technology products worldwide. Due to the geographic concentration of our facilities, our business is vulnerable to similar events and disruptions, which could have a material adverse impact on our results of operations and financial condition.

We are facing downward pricing pressure in all markets where we provide our products, and price declines could reduce our revenues and gross margins.

We expect downward pricing pressure to continue in all markets where we provide our products. The hard disk drive industry, where competition is particularly harsh, is characterized by rapidly declining selling prices over the life of a product even for those products which are competitive and timely to market. For example, the average unit price of our spindle motors for HDDs on a Japanese yen basis decreased approximately 15%, 8% and 7% during the fiscal years ended March 31, 2010, 2011 and 2012, respectively. On a U.S. dollar basis, the average unit price of our spindle motors for HDDs decreased approximately 8% and 1% during the fiscal years ended March 31, 2010 and 2011, respectively, and increased approximately 1% during the fiscal year ended March 31, 2012. In general, the selling price of a spindle motor decreases over time as the supply of such products increases and as the existing technology becomes obsolete. Also, intense price competition among customers may pressure us to lower the prices of our products while the price of raw materials used in our products may increase due to rising demand for such raw materials in emerging economies, which may make it difficult for us to maintain the current level of profitability. If we are not able to achieve cost reductions, or develop new products with lower production costs, our business, financial condition and results of operations could be adversely impacted.

Also, the general purchaser preference particularly in the computer market is steadily shifting from higher-priced end-products to lower-priced end-products. If this trend further accelerates, or if the trend continues significantly longer than our expectation, there may be additional downward pricing pressure on our products, and our results of operations may be adversely affected.

If raw materials or components for our products are not available in quantities or at prices that we expect, our production could be significantly harmed.

We rely on third party suppliers for some of the raw materials, such as aluminum and rare earth materials, and some of the components, such as connectors, electric circuits, magnets and other unit assemblies, used in our manufacturing processes. Our production capacity will be limited if one or more of these materials or components become unavailable or available in reduced quantities due to increased prices for such materials. Financial or operational disruptions or slowdowns suffered by our principal suppliers or shippers may negatively affect the availability of raw materials or components. In addition, governmental action that adds conditions to the use of raw materials or components or imposes additional disclosure or other regulatory compliance requirements relating to such materials or components may also affect their availability. We may

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have to devote significant resources to secure alternative suppliers or shippers, find substitutes for such materials or components, or develop designs and technologies that reduce or eliminate the need for such materials or components. If our sources of materials and supplies are unavailable for a significant period of time without any such substitute, design or technology, our operating results will be adversely affected.

We face aggressive competition both in the markets where we supply our main products and in the markets into which we are attempting to expand our business, which could have a material adverse effect on our business and results of operations.

In the markets where we supply our main products, including small precision motors, we are under intensive price competitive pressure to reduce our prices as our competitors attempt to expand their market shares. In the markets in which we are attempting to expand our market share, including the home appliances and automobile parts markets, we compete with competitors that may have larger financial, research and development, manufacturing, sales, marketing and service capabilities and sources of support than we do, and that may also have established market recognition and long-standing customer relationships. In emerging markets, including those for electric and hybrid vehicle control systems, we also face severe competition with other new market entrants as they seek to expand their market share.

To maintain our competitiveness in the markets where we supply our main products, and to enhance our competitiveness in the markets into which we are attempting to expand our business, we believe that we should maintain, or may need to increase, our substantial level of investment in research and development, expand our production, sales and marketing capabilities, enhance services and support, timely develop new products, and further improve our existing products.

We may not be able to successfully compete in all or some of our markets in the future if:

• any of our markets develops faster than our expectations due to rapidly increasing demand or otherwise, causing our market share to decline relative to our competitors who are able to better meet increasing demand or otherwise cope with developing markets;

• we are unable to achieve technological advancement necessary for our products to be accepted in the markets;

• our competitors’ competitive efforts result in technological innovations, improved manufacturing efficiencies or enhanced research and developmental capabilities, rendering our products and technologies obsolete or uncompetitive;

• mergers or consolidations among our competitors result in a relative decline in our competitive position; or

• we are unable to obtain financial, technological, human and other resources necessary to maintain or enhance our investments.

Our failure to maintain or enhance our competitive position could result in reduced profitability.

We may be unable to commercialize customized products that satisfy customers’ needs, or our customers may be unable to commercialize products that incorporate our products, which could damage our reputation and reduce sales.

Our customers generally require us to provide customized products within a set delivery timetable. If we are unable to commercialize new product lines including design, manufacture and delivery of customized

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products, we will not be able to meet our customers’ needs. Any future failure to meet significant customer requirements could damage our reputation, result in a decline in our market share and reduction of our sales and profit ratio, and impede the business development of these new products and the expansion of the products’ markets.

In addition, if a customer fails to successfully commercialize or sell products that incorporate in them any customized product which we have invested significant resources to develop, our business and results of operations would be materially adversely affected.

If any defect is discovered in our products, or if any of the end-products in which our products are incorporated malfunctions, our reputation and results of operations may suffer by lost sales or costs associated with recalls or management distraction.

We manufacture complex, state-of-the-art motors and other electronic products and, as a result, are exposed to potential warranty and product liability claims arising from alleged or actual defects in our products in the normal course of business. In particular, widespread malfunction of any end-product in which our products are incorporated may lead to consumer dissatisfaction, recalls and, potentially, lawsuits. In the automobile motor and other parts markets, where we seek to expand our business, strict safety standards are imposed by applicable regulations and demanded by the public as malfunctioning vehicles could result in serious property damage, personal injuries and even death. If such malfunction is caused by or attributed or alleged to be attributed to defects in our products, our brand image could be damaged, we might be subject to adverse regulatory action or drawn into disputes with our customers, or our results of operations might be adversely affected by lost sales or costs associated with recalls. In addition, significant financial and human resources might be incurred, and management’s attention might be diverted, if we are required to defend ourselves against legal claims.

We generally maintain insurance against product liability claims, but our insurance coverage may not be adequate for any potential liability ultimately incurred. In addition, insurance could become unavailable in the future on terms acceptable to us. A successful claim that exceeds our available insurance coverage or a significant product recall could have a material adverse impact on our financial condition and results of operations.

We rely to a large extent on production and sales in developing countries which may become politically or economically unstable and face risks resulting from unanticipated developments in those countries.

We manufacture and sell a large percentage of our products at locations in developing countries such as China, Thailand, the Philippines, Vietnam, Malaysia, Mexico, and Indonesia, in order to take advantage of more competitive production and sales costs and develop new markets for our products. We also seek to expand our operations into other developing markets, including India and Brazil, where we have little or no prior experience. These countries and markets are still in the process of developing their economic, social and other infrastructures and are susceptible to various uncertainties. The political, social and economic situations of these countries may not continue to provide an environment in which we can continue to manufacture our products cost-efficiently in proximity to our customers. The governmental authorities of those countries may impose regulations or restrictions that would make it difficult, impractical or impossible, whether economically, legally or otherwise, for us to conduct our business there.

Furthermore, business activities overseas exposes us to the following various risks related to foreign business transactions, and these risks may adversely affect our business, operating results, and financial condition:

• economic slowdown or downturn in the relevant industries in foreign markets,

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• international currency fluctuations,

• general strikes or other disruptions in working conditions,

• labor shortage and the labor cost increase, especially in China and Thailand,

• political instability,

• changes in trade restrictions and tariffs,

• the difficulties associated with staffing and managing international operations,

• generally longer receivables collection periods,

• unexpected changes in or imposition of new legislative or regulatory requirements,

• relatively limited protection for intellectual property rights in some countries,

• potentially adverse taxes,

• cultural and trade differences,

• additional cost of products exported overseas, including tariffs, shipping costs, and other duties and impositions, which may make our products less competitive in terms of price, and

• significant time and capital required for expanding overseas businesses before achieving capital return.

Our quarterly operating results do not necessarily indicate a trend of our future operating results.

We have experienced, and expect to continue to experience, fluctuations in sales and operating results from one quarter to the next. As a result, we believe that quarter-to-quarter comparisons of our operating results are not necessarily meaningful, and that such comparisons cannot be relied upon as indicators of future performance. Our operating results may be subject to significant quarterly fluctuations as a result of the various factors, including:

• fluctuations in product demand as a result of the cyclical and seasonal nature of the industries in which our products are sold and used, including the computer industry,

• translation effect of exchange rate fluctuations on the results of our overseas subsidiaries and monetary assets and liabilities denominated in foreign currencies,

• the availability and extent of utilization of our manufacturing capacity,

• changes in our product, customer, or competitor mix, which can occur on short notice,

• cancellation or rescheduling of significant orders, which can occur on short notice;

• deferrals of customer orders for our new products, and

• component and raw material costs and availability, particularly with respect to components obtained from sole or limited sources which can occur on short notice.

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Because our production and inventory are planned in advance of anticipated customer demand, if actual demand is significantly smaller than projected, we may suffer losses.

We typically plan our production and inventory levels based on customers’ advance orders, commitments or forecasts, as well as our internal assessment and forecasts of customer demand, which are highly unpredictable and can fluctuate substantially, especially if competition becomes more intense or the demand is reduced due to seasonality or other factors. In order to secure sufficient production scale and productivity, we may make capital investments in advance of anticipated customer demand. We plan to make additional capital investments to expand our manufacturing capabilities particularly in emerging economic regions. If our manufacturing capabilities are under-utilized due to lower demand for our products, unavailability of raw materials or components, or for any other reason, such under-utilization could result in increases in utilization costs, impairment losses and inventory valuation losses or otherwise lower our profit margins, and could have a greater material adverse impact on our results of operations and financial condition.

In addition, in anticipation of long lead times to obtain inventory and materials from our suppliers, we may also from time to time order materials in advance of anticipated customer demand. This advance investment and ordering may result in excess inventory levels, resulting in unanticipated inventory write-downs if expected orders fail to materialize. Our inventory increased 1.2% between March 31, 2011 and March 31, 2012.

In addition, our operating expenses are relatively fixed, and we thus have limited ability to reduce expenses quickly in response to any revenue shortfalls resulting from a decrease in demand. Consequently, our operating results will be harmed if our revenues do not meet our revenue projections.

Our growth has been based in part on acquisitions of, or investments in, other companies, and our future growth could be adversely affected if we make acquisitions or investments that fail to achieve their intended benefits, or if we are unable to find suitable acquisition or investment targets.

We have achieved much of our growth by acquiring and otherwise investing in other companies that have provided us with complementary technologies and product lines. From time to time, we intend to seek and pursue appropriate opportunities for acquiring and investing in other companies and increasing our ownership interests in the existing affiliates and investees. To the extent that we are unable to make successful acquisitions or investments, we may not be able to continue to expand our product range and our growth rates could be adversely affected.

Critical to the success of our acquisitions is the ordered, efficient integration of acquired businesses into our organization, which has in the past required, and may continue to require, significant resources. Our acquisitions may not generate the operational and financial returns we expect. The success of our future acquisitions will depend upon factors such as:

• our ability to manufacture and sell the products of the businesses acquired,

• continued demand for these acquired products by our customers,

• our ability to integrate the acquired businesses’ operations, products and personnel,

• our ability to retain key personnel of the acquired businesses,

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• our ability to extend our financial and management controls and reporting systems and procedures to acquired businesses,

• accuracy of financial due diligence, and

• our ability to identify possible liabilities that could negatively affect our business, operations or reputation during the due diligence process.

Our new and additional investments in other companies are subject to other uncertainties that may have a material adverse impact on our business. For example, the fair value of our investments in other companies may be impaired if their business results deteriorate, or as a result of a decline in the fair value of their securities that is other than temporary. Changes in economic policies of local governments, laws and regulations, and accounting rules applicable to companies in which we invest may also have a significant adverse effect on our financial results. In addition, in cases where we have a non-controlling interest in an investee, we typically cannot control the operations and the assets of the investee or make major decisions without the consent of other shareholders, or participants, or at all, or acquiring a controlling interest by increasing our shareholding interest.

Failure to succeed in acquisitions or investments, or an inability to find suitable acquisition or investment targets, could have a material adverse effect on our business, results of operations and financial condition.

Our growth places significant burden on our management and operational and financial resources.

Our future success depends to a large extent on our ability to integrate and manage our group of companies as we seek to expand our business and operations organically or through acquisitions of or investments in businesses in accordance with our growth strategy. However, our growth has placed, and is expected to continue to place, significant burden on our management and operational and financial resources. As we pursue our growth strategy, we may face increasing burden on management and our resources and, as a result, fail to timely and appropriately enhance our group-wide administrative, operational, information technology and financial management systems. Such failure may have a material adverse impact on our business, results of operations and financial condition.

We rely on our founder, President and CEO, Mr. Shigenobu Nagamori, the loss of whom could have a material adverse effect on our business.

Our continued success will depend to a significant extent on the efforts and abilities of our founder and current President and CEO, Mr. Shigenobu Nagamori. Mr. Nagamori is actively engaged in our management and determines our strategic direction, especially with regard to acquisition activities. While we are in the process of establishing a management structure designed to reduce our dependence on Mr. Nagamori, his sudden departure or reduced attention to us could have a material adverse effect on our operations, financial condition and operating results.

Any material failure to successfully achieve our corporate objectives or business strategies due to changes in the economic environment or otherwise may have an adverse impact on our reputation and business.

One of our major corporate objectives is to contribute to society, and we endeavor to implement various policies to further this objective, including those intended to provide a stable employment environment and create new jobs. We believe such objectives and policies contribute significantly to building a positive corporate image and brand.

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While endeavoring to achieve our corporate objectives, we pursue business strategies that include, among others, seeking growth opportunities through acquisitions of and investments in businesses as well as organic expansion. We may be, however, unable to achieve the profitability or returns expected by management. Changes in the business and economic environments in which we currently operate or aim to operate and other uncertain or unforeseen factors may make it difficult for us to achieve the targets management has set.

If we are unable to achieve our corporate objectives due to such difficulty, or are compelled by economic or other factors to adopt measures that are inconsistent with our corporate objectives, we may lose credibility, and our corporate brand may be diminished, adversely affecting our business and results of operations.

We rely on monthly financial data from operating segments that are not prepared on a U.S. GAAP basis and are not comparable between segments, which potentially reduces the usefulness of this data to us in making management decisions.

We assess our performance and make operating decisions based on financial information received from the 14 operating segments and others that we report in our consolidated financial statements: Nidec Corporation, Nidec Electronics (Thailand) Co., Ltd., Nidec (Zhejiang) Corporation, Nidec (Dalian) Limited, Nidec Singapore Pte. Ltd., Nidec (H.K.) Co., Ltd., Nidec Philippines Corporation, Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec Tosok Corporation, Nidec Copal Electronics Corporation, Nidec Techno Motor Corporation, Nidec Motor Corporation and Nidec Motors & Actuators. This segmental information is prepared in accordance with the accounting principles in each segment’s respective country of domicile. For example, Nidec Corporation’s operating profit or loss is determined using Japanese GAAP while Nidec Singapore Pte. Ltd. applies Singaporean accounting principles. Therefore, our segment data has not been prepared under U.S. GAAP on a basis that is consistent with the consolidated financial statements or on any other single basis that is consistent between segments.

In addition, year-end closing adjustments and other items are not included in segment totals. These aspects of our segment data could make it more difficult for us to evaluate the relative performance of individual segments and our overall operations in a timely manner, as compared with segment data compiled on a uniform U.S. GAAP basis.

We are subject to various laws and regulations, and our failure to comply may harm our business.

We conduct our business subject to ongoing regulation and associated regulatory compliance risks, including the effects of changes in laws, regulations, policies, voluntary codes of practice, accounting standards and interpretations in Japan and other countries in which we conduct our business. As we expand the range of our products and the geographical scope of our business, we will be exposed to risks that are unique to particular industries, markets or jurisdictions. Our compliance risk management systems and programs may not be fully effective in preventing all violations of laws, regulations and rules.

Our business activities are subject to a wide range of environmental laws and regulations in Japan, Asia, the Americas, Europe and other areas. These laws and regulations include those relating to discharge of chemicals into the air and water, management, treatment and disposal of hazardous substances and wastes, product recycling, prevention of global warming and the obligation to investigate and clean up soil and groundwater contamination. Many of our operations require environmental permits, the terms of which may impose limits on our manufacturing activities and require the incurrence of costs to achieve compliance, and

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which may be subject to modification, renewal and revocation by the issuing authorities. We may be held responsible for payments or other compensation for noncompliance with or otherwise pursuant to applicable environmental laws, regulations and permits, in which case our reputation as well as our results of operations could be adversely affected. Moreover, if these laws, regulations and permits become more stringent in the future, the amount of capital expenditures and other expenses which might be required to complete remedial actions and to continue to comply with applicable environmental laws, regulations and permits could increase and be significant, which would materially and adversely affect our business, financial condition and results of operations.

Our business activities are also subject to various other governmental regulations, both local and international, including antitrust, anti-bribery, intellectual property, consumer protection, taxation, export regulations, tariffs, foreign trade and exchange controls. Because our sales are mostly derived from small precision motor sales and because we have a dominant market share globally for small precision motors, any regulatory development or measure that affects sales or manufacturing of small precision motors in particular could reduce our sales or otherwise negatively affect our business. In addition, as our common stock is listed on the Tokyo Stock Exchange and the Osaka Securities Exchange, and American Depositary Shares representing shares of our common stock are listed on the New York Stock Exchange, we must also comply with applicable securities laws and regulations and accounting standards. Compliance with these and other applicable laws, regulations and standards could require significant financial, human and other resources. Moreover, our failure or inability to comply fully with these and other applicable laws, regulations and standards could lead to fines, public reprimands, damage to reputation, enforced suspension of operations or, in extreme cases, withdrawal of authorization to operate, adversely affecting our business and results of operations.

In addition, future developments or changes in laws, regulations, policies, voluntary codes of practice, accounting standards, fiscal or other policies and their effects are unpredictable and beyond our control. Such developments and changes may require additional financial, administrative and human resources.

We may experience difficulties implementing effective internal controls over financial reporting.

As a public company, it is essential for us to have effective internal controls, corporate compliance functions, and accounting systems to manage our assets and operations. Moreover, under the U.S. Sarbanes-Oxley Act of 2002, which applies by reason of our status as a company subject to the reporting obligations under the U.S. Securities Exchange Act of 1934, we are required to establish internal control over our financial reporting, and our management is required to assess the effectiveness of our internal control over financial reporting and disclose whether such internal control is effective. Our independent registered public accounting firm must also conduct an audit on the effectiveness of our internal control over financial reporting. We are also subject to regulations on internal control over financial reporting under Japanese law.

Designing and implementing an effective system of internal controls capable of monitoring and managing our business and operations requires significant management, human and other resources. Once we identify any significant deficiencies or material weaknesses in our internal control systems, we may require additional resources and incur additional costs for remediating such deficiencies or weaknesses.

Furthermore, if management determines that our internal control over financial reporting is not effective for any period, we may be unable to timely file reports required under the U.S. Securities and Exchange Act of 1934, and our market perception could be negatively affected. Depending on the severity of, and causes and other factors relating to, a material weakness in internal control over financial reporting, we could be subject to liabilities or sanctions, including enforcement action by the SEC for violations of the U.S. securities laws and by the Japanese Financial Services Agency for violations of the Financial Instruments and Exchange Law. In addition, we could be restricted in our ability to access U.S., Japan and other markets for capital raising.

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We could be harmed by litigation involving patents and other intellectual property rights.

Our business is dependent on our ability to protect our proprietary rights through patent protection on certain aspects of our technology, and on trade secret, copyright and trademark laws as well as contractual provisions. We face the following risks:

• we could incur substantial costs in defending against claims of infringement of the intellectual property of others and such claims could result in damage awards against us, in orders to pay for the use of previously unrecognized third-party intellectual property or in injunctions preventing us from continuing aspects of our business, which could in turn have a material adverse effect on our business, financial condition and results of operations;

• our protective measures may not be adequate to protect our proprietary rights;

• other parties, including competitors with substantially greater resources, may independently develop or otherwise acquire equivalent or superior technology, and we may be required to pay royalties to license the intellectual property of those parties;

• patents may not be issued pursuant to our current or future patent applications, and patents issued pursuant to such applications, or any patents we own or have licenses to use, may be invalidated, circumvented or challenged;

• the rights granted under any such patents may not provide competitive advantages to us or adequately safeguard and maintain our technology;

• we could incur substantial costs in seeking enforcement of our patents against infringement or the unauthorized use of our trade secrets, proprietary know how or other intellectual property by others; and

• the laws of foreign countries in which our products are manufactured and sold may not protect our products and intellectual property rights to the same extent as the laws of Japan and the United States, and such laws may not be enforced in an effective manner.

For information relating to our intellectual properties disputes, see “Item 4.B. Information on the Company—Business Overview—Legal Proceedings.”

Leaks of confidential information may adversely affect our business.

In the normal course of business, we possess personal and other confidential information on our customers, other companies and other third parties with whom we do business as well as our own confidential information and personal information of our employees. Although we have security measures in place to protect such information, we may be subject to liability or regulatory action if any of such information is leaked due to human or technical error, unauthorized access or other illegal conduct, or otherwise. Failure to protect confidential information could also lead to a loss of our competitive advantage and customer and market confidence in us, adversely affecting our business, financial condition and results of operations.

In addition, there is a risk that our confidential information may be leaked due to human or technical error or illegal conduct by a third party or other causes that are beyond our control. In such cases, including where our competitive advantage is lost because of the leak, our business, financial condition or results of operations may be adversely affected.

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For our business to continue effectively, we will need to attract and retain qualified personnel.

Our business depends on the continued employment of our senior management, engineers and other technical personnel, many of whom would be extremely difficult to replace. To maintain our current market position and support future growth, we will need to hire, train, integrate and retain significant numbers of additional highly skilled managerial, engineering, manufacturing, sales, marketing, support and administrative personnel. Competition worldwide for such personnel is extremely intense, and we and our affiliates may be unable to attract and retain such additional personnel.

Losses relating to our pension plans and a decline in returns on our plan assets may negatively affect our results of operations and financial condition.

We have defined benefit pension plans covering employees who meet eligibility requirements. We may incur losses if the fair value of our pension plans’ assets declines, if the rate of return on our pension assets declines, or if there is a change in the actuarial assumptions on which the calculations of the projected benefit obligations are based. We may also experience unrecognized service costs in the future due to amendments to existing pension plans. Changes in the interest rate environment and other factors may also adversely affect the amount of unfunded pension obligations and the resulting annual amortization expense. In addition, the assumptions used in the computation of future pension expenses may not remain constant.

If our goodwill and long-lived assets become impaired, we may be required to record impairment charges, which would adversely affect our financial results.

We have substantial goodwill and long-lived assets, including plants, property and equipment. In connection with any acquisition we make in the future, we may record additional goodwill depending on the terms of the acquisition. In accordance with U.S. GAAP, we review goodwill for impairment annually and goodwill and long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill is tested by initially estimating fair value and then comparing it against the carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, we are required to record an impairment loss. In addition, if long-lived assets do not generate sufficient cash flows, impairment losses will also have to be recognized. Any significant amount of such impairment losses will adversely affect our results of operations and financial condition.

Our results of operations will be negatively affected if we are required to reduce our deferred tax assets.

As part of the process of preparing our consolidated financial statements in accordance with U.S. GAAP, we must assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we must establish a valuation allowance. In the event of a deterioration in market conditions or results of operations, in which we determine that there is additional uncertainty regarding realization of all or part of our net deferred tax assets, an adjustment to our deferred tax assets would decrease our income during the period in which such determination is made.

Because our sales to overseas customers are denominated predominantly in U.S. dollars, we are exposed to exchange rate risks that could harm our results of operations and shareholders’ equity.

Sales to customers outside Japan accounted for 75.3%, 74.4% and 74.1% of our consolidated net sales during the fiscal years ended March 31, 2010, 2011 and 2012, respectively. A significant portion of our overseas sales is denominated in currencies other than the Japanese yen, primarily the U.S. dollar, Euro,

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Renminbi and Thai Baht. As a result, the appreciation of the Japanese yen and other currencies against the U.S. dollar will generally have a negative effect on our sales, operating income, and net income. We may experience volatility in our shareholders’ equity as a result of foreign currency exchange rate fluctuations when the results of operations of subsidiaries operating in currencies other than the yen are consolidated into our financial statements, which are reported in Japanese yen.

We also experience foreign exchange risk to the extent that our sales and expenses or those of our subsidiaries are denominated in different currencies. In order to mitigate against this risk, in recent years we have been attempting to offset a portion of our foreign currency revenue by matching the currency of revenue with the currency of expense. For example, if revenue for a particular product is in U.S. dollars, we attempt to purchase the supplies and resources used to produce that product in U.S. dollars. Nevertheless, we remain exposed to the effects of foreign exchange fluctuations.

Interest rate fluctuations may adversely affect our financial condition.

We have long-term receivables and debt, with fixed and variable rates, and we enter into interest rate swaps and other contracts in order to stabilize the fair values and cash flows of those receivables and debts. We enter into interest rate swaps and other contracts to reduce our market risk exposure from changes in interest rates. To the extent that their effects are not hedged, we are exposed to interest rate fluctuation risks which may affect our operational costs, interest expenses, interest income and the value of financial assets and liabilities.

An unexpected drastic decline in the global economies may result in reduced demand for our products.

Demand for our products may be adversely affected by unexpected economic trends in the countries or regions in which our products are sold. Economic downturns and declines in purchasing activities in markets worldwide may result in a decline in demand for our products. In particular, our products are often used in end-products that are subject to discretionary spending, such as personal computers, consumer electronic goods and automobiles, and thus, a downturn in the economy could affect our sales. If, for example, the global economic environment deteriorates due to the credit and financial crises in Europe, our operating results and financial condition may be adversely affected.

Our ability to collect on our accounts receivable may be adversely affected by our customers’ worsening financial conditions.

Our accounts receivable as of March 31, 2012 was 11.1% higher compared to March 31, 2011. While we are taking measures to mitigate and manage credit risks with respect to our customers and business partners, if changes in the economic conditions of our major markets or the business environment surrounding our customers lead to unexpected levels of bankruptcies or defaults or otherwise result in our customers being unable to pay for our products on schedule or at all, our operating results and financial condition may be negatively affected. Changes in the business environment adversely affecting the liquidity situation of our two largest customers, which represented 13.0% and 7.2% of our gross accounts receivable at March 31, 2011, and 13.6% and 9.2% of our gross accounts receivable at March 31, 2012, respectively, could have a particularly significant negative impact on our results of operations and financial condition.

Decreases in the value of Japanese or foreign stocks may adversely affect our financial results.

We hold Japanese and foreign stocks as part of our investment securities. The value of these stocks are inherently volatile and may decline substantially due to economic conditions or other factors, potentially resulting in our recording an impairment loss on such securities. Decreases in the value of Japanese or foreign

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stocks may also reduce stockholders’ equity on our balance sheet since, in accordance with U.S. GAAP, we include unrealized holding losses on available-for-sale securities, if any, in our accumulated other comprehensive income or loss, while other-than-temporary declines in market value, are charged to income for the period when the loss occurs.

If our access to liquidity and capital is restricted, our business could be harmed.

We rely to a large extent on debt and equity financing to finance our operations, capital expenditures and acquisitions of other companies. If, due to changes in financial market conditions or other factors, financial institutions reduce, terminate or otherwise modify the amounts or terms of their lending or credit lines to us, and if we are unable to find alternative financing sources on equally or more favorable terms, our business may be materially adversely affected. In addition, if there is a significant downgrade of our credit ratings by one or more credit rating agencies as a result of any deterioration of our financial condition or if investor demand significantly decreases due to economic downturns or otherwise, we may not be able to access funds when we need them on acceptable terms, our access to capital markets may become more restricted, or the cost of financing our operations through indebtedness may significantly increase. This could adversely affect our results of operations and financial condition.

Natural disasters, public health issues, armed hostilities, terrorism and other causes over which we have little or no control could harm our business.

Natural disasters, including earthquakes and floods, fires, the spread of infectious diseases and other public health issues, armed hostilities, terrorism and other incidents, whether in Japan or any other country in which we operate, could cause damage or disruption to us, our suppliers or customers, or could create political or economic instability, any of which could harm our business. For example, natural disasters could adversely affect our operations by damaging industrial and other infrastructures, causing power outages, rendering our employees unable to work, reducing customer demand or disrupting our suppliers’ operations. Our network and information systems are important for normal operations, but such systems are vulnerable to shutdowns caused by unforeseen events such as power outages or natural disasters or terrorism, hardware or software defects, or computer viruses and computer hacking. The earthquake in northern Japan in March 2011 and subsequent events have disrupted the supply chains and infrastructures for Japan’s major manufacturing industries, including the computer and automobile industries. In addition, the flooding in Thailand in October 2011 severely disrupted the supply chains of IT products, including computers. Any similar events, over which we have little or no control, could cause a decrease in demand for our products or services, make it difficult or impossible for us to deliver products, for our suppliers to deliver components or for our customers to manufacture products, require large expenditures to repair or replace our facilities, or create delays and inefficiencies in our supply chain.

We maintain third party insurance coverage for various types of property, casualty and other risks. The types and amounts of insurance that we obtain vary from time to time and from location to location, depending on its availability and cost and our decisions as to risk retention. Our insurance policies are subject to deductibles, policy limits and exclusions that result in our retention of a level of risk on a self-insured basis. While we believe our insurance coverage is comparable to the coverage maintained by similar companies in our industry, losses not covered by insurance could be significant, adversely affecting our financial condition and results of operations.

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Large shareholders may sell their shares of our common stock at any time, and such sale may cause our stock price to decline, even if our business is doing well.

As of March 31, 2012, there were 136,834,584 shares of our outstanding common stock (excluding treasury stock), of which 20,142,044 shares, or 14.7% of the outstanding shares, are beneficially owned by our President and CEO, Mr. Shigenobu Nagamori. These shares and, generally, the shares owned by other shareholders, can be sold on the Osaka Securities Exchange Co., Ltd., the Tokyo Stock Exchange, Inc. and otherwise in Japan at any time. Additional sales of a substantial amount of our common stock in the public market by a large shareholder, or the perception that such sales may occur, could cause the market price of our common stock to decline. This could also impair our ability to raise additional capital through the sale of our securities. Also, in the future, we may issue securities to raise cash for additional capital expenditures, working capital, research and development or acquisitions. We may also pay for interests in additional subsidiary or affiliated companies by using cash, common stock or both. We may also issue securities convertible into our common stock. Any of these events may dilute your ownership interest in us and have an adverse impact on the price of our common stock.

Japan’s unit share system imposes restrictions in holdings of our common stock that do not constitute whole units.

Our Articles of Incorporation provide that 100 shares of our stock constitute one “unit.” The Company Law of Japan imposes significant restrictions and limitations on holdings of shares that constitute less than a whole unit. Holders of shares constituting less than a unit do not have the right to vote. A shareholder who owns shares representing less than one unit will not be able to exercise any rights relating to voting rights, such as the right to participate in a demand for the resignation of a director, the right to participate in a demand for the convocation of a general meeting of shareholders and the right to join with other shareholders to propose an agenda item to be addressed at a general meeting of shareholders. Under the unit share system, holders of shares constituting less than a unit have the right to require us to purchase their shares. However, holders of ADSs that represent other than multiples of whole units cannot withdraw the underlying shares representing less than one unit and, therefore, they will be unable to exercise the right to require us to purchase the underlying shares. As a result, holders of ADSs representing shares in lots of less than one unit may not have access to the Japanese markets to sell their shares through the withdrawal mechanism.

Rights of shareholders under Japanese law may be more limited than under the laws of other jurisdictions.

Our Articles of Incorporation, Regulations of the Board of Directors, Share Handling Regulations and the other related regulations, as well as the Company Law govern our corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, directors’ and officers’ fiduciary duties and shareholders’ rights may be different from those that would apply if we were a non-Japanese company. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the laws of other countries or jurisdictions within the United States. You may have more difficulty in asserting your rights as a shareholder than you would as a shareholder of a corporation organized in another jurisdiction. In addition, Japanese courts may not be willing to enforce liabilities against us in actions brought in Japan which are based upon the securities laws of the United States or any U.S. state.

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A holder of our ADSs will have fewer rights than a shareholder has and will have to act through the depositary to exercise those rights.

The rights of the shareholders under Japanese law to take actions, including voting their shares, receiving dividends and distributions, bringing derivative actions, examining our accounting books and records and exercising appraisal rights are available only to holders of record. Because the depositary, through its custodian agent, is the record holder of the shares underlying the ADSs, only the depositary can exercise those rights in connection with the deposited shares. The depositary will make efforts to vote the shares underlying ADSs as instructed by the ADS holder and will pay to ADS holders the dividends and distributions collected from us. However, as an ADS holder, you will not be able to bring a derivative action, examine our accounting books and records or exercise appraisal rights in your capacity as ADS holder.

Because of daily price range limitations under Japanese stock exchange rules, you may not be able to sell your shares of our common stock at a particular price on any particular trading day, or at all.

Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids and offers. These exchanges are order-driven markets without specialists or market makers to guide price formation. To prevent excessive volatility, these exchanges set daily upward and downward price fluctuation limits for each stock, based on the previous day’s closing price. Although transactions may continue at the upward or downward limit price if the limit price is reached on a particular trading day, no transactions may take place outside these limits. Consequently, an investor wishing to sell at a price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular trading day, or at all.

Foreign exchange fluctuations may affect the dollar value of our ADSs and dividends payable to holders of our ADSs.

Market prices for our ADSs may fall if the value of the yen declines against the U.S. dollar. In addition, the U.S. dollar amount of cash dividends and other cash payments made to holders of our ADSs would be reduced if the value of the yen declines against the U.S. dollar.

It may not be possible for investors to effect service of process within the United States upon us or our Directors or Corporate Auditors or to enforce against us or these persons judgments obtained in United States courts predicated upon the civil liability provisions of the federal securities laws of the United States.

We are a limited liability, joint-stock corporation incorporated under the laws of Japan. Most of our Directors and Corporate Auditors reside in Japan. A substantial portion of our assets and all or substantially all of the assets of these persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for investors to effect service of process within the United States upon us or these persons or to enforce against us or these persons judgment obtained in United States courts predicated upon the civil liability provisions of the federal securities laws of the United States. There is doubt as to the enforceability in Japan, in original actions for enforcement of judgments of United States courts, of liabilities predicated solely upon the federal securities laws of the United States.

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Item 4. Information on the Company.

A. History and Development of the Company.

Nidec Corporation is a joint stock corporation that was incorporated and registered under the Japanese Commercial Code (which was replaced by the Company Law in May 2006) of Japan on July 23, 1973 under the name of Nihon Densan Kabushiki Kaisha. Our corporate headquarters are located at 338 Kuzetonoshiro-cho, Minami-ku, Kyoto 601-8205, Japan. Our main telephone number is 81-75-935-6140. As of March 31, 2012, we had 169 subsidiaries located in 25 countries, and two affiliated companies located in Japan and the Philippines. We had 107,489 employees worldwide, 90.3% of which were employed outside Japan, as of March 31, 2012.

We are one of the leading global manufacturers of electric motors and related components and equipment. We aim to achieve sustainable business growth by solidifying our leadership position in motor drive technology and expanding our product portfolio into a broader spectrum of the global electric motor market. With a particular focus on brushless direct current motors, or brushless DC motors, we have constantly explored new ways to serve the global market through the introduction of energy-efficient, environment-friendly motor drives. Our growth as a manufacturer of electric motors to our current size and status has largely been the result of the acquisition and integration of businesses that have enabled us to build a strong product offering. We regard our ability to identify, purchase and integrate acquisition targets as an essential part of our core strategy and strength.

As part of our ongoing efforts to further accelerate growth and enhance the efficiency of management of our group companies, we have implemented a series of intra-group realignment transactions in the general motors business group. As part of these transactions, Nidec Power Motor Corporation and Nidec Shibaura Corporation were merged by absorption into an intermediate holding company, Nidec Techno Motor Holdings Corporation in March and April 2011, respectively. In addition, Nidec Motor Corporation and Nidec Sole Motor Corporation S.R.L. became subsidiaries of a single intermediate holding company, Nidec Motor Holdings Corporation, in April 2011.

In July 2011, we transferred a portion of Nidec Corporation’s management function relating to Nidec-Kyori Corporation to Nidec-Shimpo Corporation through an absorption-type corporate split transaction. In April 2012, Nidec-Kyori Corporation was merged by absorption into Nidec-Shimpo Corporation.

In July 2011, we acquired Sanyo Seimitsu Co., Ltd., a manufacturer of vibration motors for mobile phones and other small precision DC motors, to further expand our small precision motor business. The company was subsequently renamed “Nidec Seimitsu Corporation.”

In November 2011, we established Nidec Management Shanghai Corporation for the specific propose of our cash management in China.

In April 2012, Nidec Shimpo acquired The Minster Machine Company, a U.S. manufacturer of press machines, to expand our machinery business.

In May 2012, we acquired Ansaldo Sistemi Industriali S.p.A., an Italian manufacturer of industrial motors, generators and drives, to expand our industry motor business.

In April, 2012, we and Nidec Sankyo Corporation, a consolidated subsidiary, entered into a share exchange agreement to make Nidec Sankyo our wholly owned subsidiary. The share exchange transaction is expected to become effective on October 1, 2012 in accordance with a resolution adopted at an ordinary general meeting of Nidec Sankyo shareholders held on June 18, 2012.

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The following list presents a selected history of our major acquisition activities relating to the expansion of our businesses involving small precision motors, general motors, machinery, electronic and optical components and other products:

During Fiscal Years Ended March 31,	Event
1989	We acquired Shinano Tokki Co., Ltd., a major manufacturer of spindle motors for hard disk drives, from Teac Corporation, a then major manufacturer of audio equipment and hard disk drives for PCs. As a result, we gained the largest market share of spindle motors in the world.
1995	We acquired 38.5% of Kyoritsu Machinery Co., Ltd. and changed its name to Nidec Machinery Corporation. We subsequently increased our ownership to the current level of 60.0%. This company manufactures factory automation equipment for small precision motor assemblies and automated measuring instruments.
1995/ 2003	We acquired newly-issued shares of Shimpo Industries Co., Ltd., currently Nidec-Shimpo Corporation, constituting 36.7% of its then outstanding shares. We subsequently increased our ownership to 51% and have consolidated its results since February 2002. Nidec-Shimpo became a wholly-owned subsidiary of Nidec by way of a share exchange, effective as of October 1, 2003. Nidec-Shimpo is a major manufacturer of stepless automatic transmission mechanisms.
1997/ 2002	At the time when Shimpo Industries became our consolidated subsidiary in February 2002, Shimpo Industries held 90.0% of the outstanding shares of Read Corporation, currently Nidec-Read Corporation. Shimpo Industries acquired Read Corporation from Nippon Steel Chemical Co., Ltd in 1997. Nidec-Read manufactures measuring/inspection equipment for electronic components, including printed circuit boards, ceramics, semiconductors and automotive parts. Nidec-Read became our majority-owned subsidiary in February 2002 as a result of the inclusion of Nidec-Shimpo in our scope of consolidation.
1998/ 2004	We acquired 17.7% of the outstanding shares of Copal Co., Ltd. in 1998, currently Nidec Copal Corporation, from Fujitsu Limited. Later in 1998, we increased our ownership of Nidec Copal to 42.8%. We further increased our ownership of Nidec Copal to 51.3% in February 2004. Nidec Copal is a leading manufacturer of camera shutters and other optical and electronics instruments. Nidec Copal also manufactures information terminals, laboratory system instruments and automated manufacturing systems. In connection with our acquisition of Copal’s shares, we acquired from Copal 32.3% of the outstanding shares of Copal Electronics Corporation, currently Nidec Copal Electronics Corporation. Nidec Copal Electronics is a manufacturer of small electronic precision instruments, including semi-fixed gas registers, trimmer capacitators, small precision motors and gas and liquid pressure sensors. We subsequently increased our ownership of Nidec Copal Electronics to 40.0% in 1998 and then to 51.0% in January 2004.

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During Fiscal Years Ended March 31,	Event
1998/ 2012	We acquired the assets relating to the motor division of Shibaura Engineering Works Co., Ltd. and established a joint venture, Nidec Shibaura Corporation, with Toshiba Corporation and Shibaura Engineering. We initially owned 40.0% of the joint venture. We subsequently dissolved the joint venture and purchased the remaining 60.0% interest from our former joint venture partners, and Nidec Shibaura became our wholly-owned subsidiary in September 2000. Nidec Shibaura mainly develops and manufactures precision motors for electric home appliances. In April 2011, Nidec Shibaura was merged by absorption into Nidec Techno Motor Corporation.
1999/ 2009	In October 1999, we acquired 71.0% of the outstanding shares of Nemicon Corporation, which was subsequently renamed Nidec Nemicon Corporation, a manufacturer of optical rotary encoders, proximity sensors and other electronic equipment. Later that year, we acquired an additional 2.1% share in the company Nidec Nemicon. In March 2009, we disposed of all of the shares of Nidec Nemicon.
2000/ 2011	We acquired 67.0% of the outstanding shares of Y-E Drive Corporation, subsequently renamed Nidec Power Motor Corporation, from Yasukawa Electric Corporation. Nidec Power Motor designs, develops, manufactures and services general motors for industrial equipment and home electrical appliances. Through this acquisition, we expanded our business in the field of general motors. In March 2011, we acquired the remaining shares of Nidec Power Motor, and Nidec Power Motor was merged by absorption into Nidec Techno Motor Corporation.
2004	In October 2003, we acquired approximately 40% of the outstanding shares of Sankyo Seiki Mfg. Co., Ltd., currently Nidec Sankyo Corporation. We subsequently increased our ownership of Nidec Sankyo to approximately 51% in February 2004, and currently hold approximately 75% of the outstanding shares of Nidec Sankyo. We plan to make Nidec Sankyo a wholly-owned subsidiary by way of a share exchange, effective as of October 1, 2012.
2006	In November 2006, we acquired 98.9% of the outstanding shares of Fujisoku Corporation, which manufactures and sells industrial switches, memory cards, panel switches and electronic measuring instruments.
2006	In December 2006, we acquired all of the voting shares of the motors and actuators business of Valeo S.A., France, currently Nidec Motors & Actuators. As a result, we have included the results of the Nidec Motor & Actuators group wholly-owned subsidiaries (consisting of seven companies) in our consolidated financial statements. These companies manufacture motors and actuators for automobiles such as air flow systems, body closure systems, occupant positioning systems and brake systems.
2007	In February 2007, we acquired 87.1% of the outstanding shares of Brilliant Manufacturing Limited, currently Nidec Component Technology Co., Ltd. Nidec Component Technology is engaged in manufacturing and sales of base plate die-casting and top covers used in hard disk drives.

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During Fiscal Years Ended March 31,	Event
2008/ 2011	In April 2007, we acquired 51.7% of the common stock of Japan Servo Co., Ltd., currently Nidec Servo Corporation, a manufacturer of motors and motor-applied products. In October 2010, we acquired the remaining shares of Nidec-Servo.
2009	In June 2008, we acquired all of the shares of Shanghai Nidec Automotive Electric Motors Limited, a manufacturer of automotive DC motors used in window lift systems and anti-lock braking systems.
2009	In August 2008, we acquired 68.4% of newly issued shares of Copal Yamada, which manufactures and designs precision molds.
2010/ 2012	In August 2009, we acquired 60.0% of the voting interests in NTN-Nidec (Zhejiang) Corporation and NTN-Nidec (Thailand) Co., Ltd. to make them our wholly owned subsidiaries. These two companies were renamed Nidec Bearing (Zhejiang) Corporation and Nidec Bearing (Thailand) Corporation, respectively. These companies manufacture sintered-alloy fluid dynamic bearing units. In April 2011, Nidec Bearing (Zhejiang) Corporation was merged by absorption into Nidec (Zhejiang) Corporation.
2010	In January 2010, we acquired all of the voting interests in the household motor business of Appliances Components Companies S.p.A. in Italy, which was renamed Nidec Sole Motor Corporation S.R.L.
2010	In February 2010, we acquired 90.0% of the outstanding shares of SC WADO Co., Ltd., a base plate manufacturer in Thailand.
2011	In September 2010, we acquired all of the assets, the liabilities and the voting rights of Emerson Electric Co.’s motors and controls business, currently Nidec Motor Corporation, which manufactures industrial, air conditioning and home appliance motors.
2012	In July 2011, we acquired all of the outstanding shares in Sanyo Electric Co., Ltd., currently Nidec Seimitsu Corporation, which manufactures small precision DC motors (vibration and general motors).

For a further discussion of our significant acquisitions and dispositions, see Note 3 to our audited consolidated financial statements included elsewhere in this annual report.

In September 2009, we discontinued the semiconductor manufacturing equipment, or SME, business in order to improve profitability by prioritizing our investment of management and capital resources on the development and production of new products in the automobile parts and measuring equipment businesses, which we believe have greater potential for growth. In March 2011, we discontinued the specialty lens unit, or SLU, business in order to improve profitability by prioritizing our investment of management resources to the development and production of new products and business areas with more potential for growth. In March 2012, we discontinued the lens actuator, or LAC, business, the tape drive and disk drive mechanism, or PGN, businesses, and the compact digital camera lens unit, or CLU, business in order to improve profitability by prioritizing our investment of management resources to the development and production of new products and areas that we believe have more potential for growth than the LAC, PGN and CLU businesses. For a further discussion on the discontinued businesses, see Note 24 to our audited consolidated financial statements included elsewhere in this annual report.

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For the fiscal years ended March 31, 2010, 2011 and 2012, our capital expenditures, as shown in our consolidated statements of cash flows for those fiscal years, were ¥36,608 million, ¥55,010 million and ¥41,446 million, respectively. Major capital expenditures for the last three fiscal years included additional expansions of our property, plant and equipment for hard disk spindle motors in Thailand and the Philippines and electronic and optical components in Thailand.

Our currently planned capital expenditures for the fiscal year ending March 31, 2013 include investments of approximately ¥37,455 million in manufacturing plants and facilities, mainly in Asia, and various additional other investments, including:

- Basic and applied research and development facility in Japan (Nidec Corporation)

- Small precision motors manufacturing factory in Thailand (Nidec Electronics (Thailand) Co., Ltd.)

- Components for small precision motors manufacturing factory in Thailand (Nidec Precision (Thailand) Co., Ltd.)

The planned capital expenditures for the fiscal year ending March 31, 2013 also include plans to purchase property, plant and equipment to replace the assets damaged by the Thai flooding. For more information on our capital expenditure, see “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources.”

Our Basic Strategy

Electric motors account for an increasingly larger portion of all electric consumption in the world today. The efficiencies of electric motors and motor drive systems can make a significant difference in the world’s power consumption and would become a crucial key to accelerating the shift toward clean and renewable energy sources, which originates in increased concerns over supplies of fossil fuels and the imminent effects of climate change.

Inefficient motors result in significant energy waste. With an increase in electricity costs, energy lost due to inefficient motors essentially translates into economic loss. In addition, since a large portion of the power generated in the world currently comes from the burning of fossil fuels, wasted energy due to motor inefficiency contributes to an increase in the amount of pollution created in the power generation process. The widespread use of high-efficiency, advanced electric motor solutions is expected to enhance the possibilities of reducing energy costs for end users, reducing the consumption of fossil fuels for energy production, and decreasing the amount of harmful emissions released into the atmosphere.

In addition to these factors, we believe the primary catalysts driving demand for highly sophisticated electric motors would include:

• Advances in electronic support for greater living comfort and safety (e.g., electronic vehicle control and home appliance digitalization);

• Growth in emerging markets, and

• Increasingly stricter global energy efficiency standards.

The core of our current strategies revolves around how we can contribute to and take advantage of the foregoing market shift by leveraging our specialized motor technologies, particularly those associated with the brushless DC motor.

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A brushless DC motor is a type of electric motor that uses electronically controlled commutation systems, rather than a mechanical commutation system used in a conventional DC motor. The brushless DC motor, without a commutator and brushes to wear out, essentially has no attributes negatively affecting the electrical connections and exhibits many advantages over traditional motor types, including:

• better speed versus torque characteristics,

• higher dynamic response,

• higher efficiency,

• longer operating life,

• noiseless operation,

• higher speed ranges,

• smaller and lighter (higher ratio of torque delivered to the size of the motor),and

• no ionizing sparks resulting in electromagnetic interference.

Brushless DC motors are gaining popularity and have come to dominate many applications requiring precise speed control, despite their higher cost compared to conventional motor types. Hard disk drives, optical disk drives and cooling fans for consumer and enterprise computers and DVD recorders and players already use brushless DC motors exclusively. Higher-torque brushless DC motors are beginning to be utilized in hybrid and electric vehicles, home appliances, office equipment and industrial machinery. We believe brushless DC motors can potentially be employed in any area currently fulfilled by conventional DC motors.

Our Business Model

We pursue sustainable enhancement of corporate value by leveraging our core competencies in the electric motor drive technology and associated manufacturing and marketing expertise, which are designed flexibly to align with future changes and developments in the relevant markets.

Our business model is to provide specialized motor drive solutions to global customers who seek to build and maintain a top tier product portfolio in terms of efficiency, differentiation, price competitiveness and speed to market. The business model has evolved over time in alignment with the customers’ changing value priorities and based on our strategic foresight in identifying potential growth areas to concentrate our resources on. We constantly assess our visions and strategies in light of the evolving business environment and, if necessary, seek to reposition ourselves by proactively taking measures, including investments, mergers and acquisitions, and divestiture or transformation of operations.

As an independent participant in multiple supply chains in multiple product markets, we supply products to higher-tier suppliers and ODM and OEM customers. We provide our specialized capabilities in motor-drive solutions that customers otherwise do not have direct access to, or cannot cost-effectively create or manage internally. We seek to maintain and further develop these capabilities to compete with our current and potential competitor suppliers worldwide. The customers in the supply chains we currently serve generally have the following attributes:

- They expect highly innovative products with an increasing focus on energy-saving, environmentally-friendly features,

- They require large quantities at a low price, and

- They purchase on short notice and expect quick delivery, service and support.

We aim for the highest market share in our chosen areas of operations, and believe that we have developed a flexible and agile manufacturing framework to ensure rapid responses to changes in customer demand, timely resolution of quality problems, and fast implementation of new product features.

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We believe our key strengths and capabilities can be summarized as follows:

• Strategic foresight to identify future growth opportunities and challenges, and agility in responding to the accompanying changes in technologies, markets and trends,

• Rich pool of specialized proprietary technologies and related expertise in customization and processing,

• Short time to market enabled by highly specialized, focused operations,

• Cost advantages generated by effectively spreading the costs of specialized capabilities over significantly large production volume for serving multiple customers,

• Ability to build long-term, close relationships with customers based on an in-depth understanding of their challenges and goals,

• Corporate culture that prioritizes employees’ creativity, labor enthusiasm, and swiftness in decision-making, and

• Extensive experience in successful mergers and acquisitions and post-merger integration.

Our competitive advantages, particularly from a perspective of responsiveness to customers, reflect, and are primarily driven by, the following operational elements:

Technology

Continuing improvement in product design, manufacturing and process technologies is critical to differentiate ourselves from our competitors and, from time to time, to ease pricing pressure. We aim to have all of our design activities focus on future growth markets and potential applications well-matched with the context of the times.

From a technical perspective, our business model first demonstrated its validity in establishing our leadership in the global market for spindle motors for hard disk drives. In the 1980’s, the computer industry was seeking innovative solutions that would enable smaller-footprint computer for home and office uses (personal computers, or PCs) without compromising performance. The manufacturers of the hard disk drive, a storage device used to store digitally encoded data in the computer and server, were also looking for innovative ways to dramatically reduce the size and improve the performance of their hard disk drives. They needed a new platter, new read and write head, and among all things, a new type of electric motor. We had anticipated the need for smaller yet higher-performing motors early on and successfully developed our proprietary brushless DC motor technology and associated mass-production expertise ahead of our competitors. Our brushless DC motor quickly replaced the traditional brush-commutated DC motor, or brush DC motor, to become the mainstream motor solution for hard disk drives, and subsequently, optical disk drives.

Our motor drive technology has since evolved through waves of innovation and modification to fulfill a role fine-tuned to the needs of the times. Exhibiting enhanced rotation accuracy, controllability, lightness, quietness and operating life, coupled with significantly improved energy-efficiency and environmental advantages, our motor portfolio has extended its reach beyond the information technology field into many other market segments where we find new demand. Our current focus is on new applications arising from consumers’ preference toward energy-saving lifestyle, greater comfort and safety. Among the most prospective application areas, we place particular emphasis on electric and hybrid automobiles, home electric appliances and industrial equipment, for which we believe highly controllable, energy-saving and environmentally-friendly motors are increasingly sought after.

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See “Item 3.D. Key Information—Risk Factors—We face aggressive competition both in the markets where we supply our main products and in the markets into which we are attempting to expand our business, which could have a material adverse effect on our business and results of operations.”

Production

Our customers, to a greater or lesser degree, serve various electronics markets which typically require large quantities of high-quality precision components, including electric motors, on short notice and at competitively low prices. Attaining a sustainable leadership position in these markets is essentially synonymous with having industry-leading manufacturing capacities and flexible manufacturing techniques that enable competitive quantity, quality, speed and price. For this reason, we constantly explore new application areas with high growth potential to continue securing sufficient production volume for better economies of scale and scope. Our manufacturing initiatives towards the leading market position basically begin with establishing substantially large manufacturing capacities in close proximity to major groups of customers so that we can meet quality and quantity demand better and make delivery times shorter than our competitors. Further, we carefully measure the value added along the production lines over the course of time and, at a scale deemed appropriate, standardize and automate production lines for lower cost manufacturing operations.

See “Item 3.D. Key Information—Risk Factors—Because our facilities are concentrated in a limited number of locations, disruptions in one or more of those locations could have a material adverse impact on our business operations.”

Inventory and Delivery

Our major revenue streams currently come from the customers who adopt a just-in-time system, or JIT, under which the customers produce only what is required in the correct quantity and at the correct time, to keep their stock levels to a minimum. Accordingly, we are expected to deliver our products to the customers’ loading bays within a narrow time slot.

JIT is a very responsive manufacturing method, and yet very reliant on suppliers. If stock is not delivered on time, the customer’s entire production schedule would most likely be delayed. Customers without inventory must avoid such a supply system problem that creates a shortage of parts. This makes supplier relationships extremely important for our customers, and our responsiveness here is primarily measured by our ability to keep sufficient levels of inventory readily available to the customers at many locations worldwide. To fulfill these customer needs, our global manufacturing network is flexibly coordinated to ensure geographical proximity to the factories and warehouses of our customers. At the same time, we pay significant attention to the demand conditions in downstream markets in order to mitigate the risk of overstocking on our side.

See “Item 3.D. Key Information—Risk Factors—Because our production and inventory are planned in advance of anticipated customer demand, if actual demand is significantly smaller than projected, we may suffer losses.”

Quality

Our quality initiatives revolve around continuous improvement and optimization of all processes—from product development, purchasing, production and sales to delivery—in order to provide maximum value for our customers. We adopt quality as a competitive strategy and implement techniques, such as ISO 9001 certification and statistical process controls, to meet customer demands and improve overall business performance.

As an internationally operating company, our quality responsibility involves reducing the environment

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burdens of our products and operations beyond national borders. In addition to compliance with international environmental standards, such as ISO14001, REACH (Registration, Evaluation, Authorization and Restriction of Chemical substances) and RoHS (Restriction of Hazardous Substances Directive), we seek to address environmental considerations and work on the reduction of raw materials used per unit of product.

See “Item 3.D. Key Information—Risk Factors—If any defect is discovered in our products, or if any of the end-products in which our products are incorporated malfunctions, our reputation and results of operations may suffer by lost sales or costs associated with recalls or management distraction.”

Strategic Investments and Business Acquisitions

Strategic investments and business acquisitions in potentially higher value areas are essential to our success in terms of broadening our technological horizons, enriching our products and customer portfolio, and eventually developing an optimal mix of revenue and profit streams. Specifically, our core investment efforts are currently being directed to the following areas:

- Research and development of energy-efficient, environment-friendly electric motors,

- Expansion of selling and manufacturing capacities in emerging countries, and

- Mergers and acquisitions of electric motor businesses in the household appliance, automotive and industrial motor industries.

See “Item 3.D. Key Information—Risk Factors—Our growth has been based in part on acquisitions of, or investments in, other companies, and our future growth could be adversely affected if we make acquisitions or investments that fail to achieve their intended benefits, or if we are unable to find suitable acquisition or investment targets.”

B. Business Overview.

We classify our operations into five business groups based primarily on the similarity of products in type and use. The business groups and major categories of products offered in each business group as of March 31, 2012 are as follows:

• Small Precision Motors: Hard disk drives spindle motors, other small precision brushless DC motors (for optical disk drives, laser printers, copiers, polygon scanners), brushless DC fans (for game machine consoles, microprocessor units, servers, personal computers, communication devices, automobiles), and other small precision motors (for refrigerator ice makers, mobile phones, CD players, DVD recorders, and other products);

• General Motors: Automotive motors (for power steering systems, dual-clutch transmission systems, engine and fuel cell cooling systems, seat adjusters, window lifts, door lock actuators, vehicle traction systems, and other products), home appliances motors (for air conditioning systems, air purification systems, washing machines, refrigerators, dish washers and other products), and industrial motors (for machine tools, heat pump and water heater systems, elevators, barrier-free facilities, electric tools, air compressors, and other products):

• Machinery: Transfer robots (for liquid-crystal-display panels, semiconductor wafers, and other products), card readers, high-speed pressing machines, and power transmission systems;

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• Electronic and Optical Components: Shutters and lens units (for digital still cameras and mobile phones), switches, trimmer potentiometers, actuators, precision plastic moldings and plastic metal casings, and

• Others: Control valves (for automotive transmissions), music boxes and logistics services.

Although the large-scale earthquake and subsequent events had a significant negative impact on our sales particularly in the first quarter ended June 30, 2011, the impact has remained at a manageable level to date. Based on the information currently available to us, we have decided to continue to pursue the growth strategy, investment plans, and research and development initiatives that we formulated prior to the earthquake. There could be developments, however, including additional earthquakes and a possible nationwide implementation of planned power outages attributable to reduced electricity production resulting from the nuclear power plant accidents, which would have a material negative impact on our results of operations. See “Item 3.D. Key Information—Risk Factors—Natural disasters, public health issues, armed hostilities, terrorism and other causes over which we have little or no control could harm our business” and “Item 3.D. Key Information—Risk Factors—An unexpected drastic decline in the global economies may result in reduced demand for our products.”

Sales by Product Category

The table below summarizes a breakdown of our consolidated net sales by business group and product category for each of the periods indicated:

	(Yen in millions, except percentage data)
	For the year ended March 31
	2010				2011				2012
Small precision motors:
Hard disk drives spindle motors	¥	203,845	35.7	%	¥	196,265	29.0	%	¥	176,932	25.9	%
Other small precision brushless DC motors(2)		72,362	12.7	%		70,149	10.4	%		69,753	10.2	%
Brushless DC fans		32,651	5.7	%		33,801	5.0	%		30,327	4.4	%
Other small precision motors		18,023	3.1	%		18,883	2.8	%		28,174	4.2	%
Sub-total		326,881	57.2	%		319,098	47.2	%		305,186	44.7	%
General motors		73,381	12.8	%		137,251	20.3	%		178,214	26.1	%
Machinery		47,966	8.4	%		77,329	11.4	%		64,904	9.5	%
Electronic and optical components(2)(3)		94,545	16.5	%		107,693	15.9	%		95,580	14.0	%
Others		28,779	5.1	%		34,617	5.2	%		38,436	5.7	%
Consolidated total	¥	571,552	100.0	%	¥	675,988	100.0	%	¥	682,320	100.0	%

Notes:

(1) Inter-group transactions have been eliminated in consolidation.

(2) Operations of the specialty lens actuator business, formerly classified in the “Other small precision brushless DC motors” business group, the tape drive and disk drive mechanism businesses, formerly classified in the “Electronic and Optical Components” business group, and the compact digital camera lens unit business, formerly classified in the “Electronic and Optical Components” business group, were reclassified as discontinued operations in March 2012 in accordance with ASC205-20 (Presentation of Financial Statements-Discontinued Operations). Prior-year sales amounts in the table have been retrospectively adjusted to reflect this reclassification.

(3) Operations of the specialty lens units business, formerly classified in the “Electronic and Optical Components” business group, were reclassified as discontinued operations in March 2011 in accordance with ASC205-20 (Presentation of Financial Statements-Discontinued Operations). Prior-year sales amounts in the table have been retrospectively adjusted to reflect this reclassification.

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For the fiscal year ended March 31, 2012, electric motors, which include Small Precision Motors and General Motors, represented 70.8% of our total net sales, with Machinery, Electronic and Optical Components, and Others comprising the remainder.

Small Precision Motors

The Small Precision Motors business covers a broad array of direct-current, or DC, electric motors operating at less than 100 watts. This business group constitutes the core of our consolidated operations and accounted for 44.7% of our consolidated net sales for the fiscal year ended March 31, 2012. More than a majority of small precision motor sales are represented by brushless DC motors used in the computer, home electronics and office equipment industries. See “Item 3.D. Key Information—Risk Factors—Because of our dependence on the computer industry, our business may be adversely affected by a decline in the computer market.”

This business group is divided into four product categories according to application: (1) hard disk drives spindle motors, (2) other small precision brushless DC motors, (3) brushless DC fans, and (4) other small precision motors.

The details of each product category are as follows:

(1) Hard disk drives spindle motors

We manufacture spindle motors for hard disk drives used in personal computers, computer servers, and a range of digital consumer electronics. This product category represented 58.0% of our Small Precision Motors sales for the fiscal year ended March 31, 2012.

Our hard disk spindle motors fall into three groups based on their hard disk drive form factors, or disk platter diameters, as follows:

(a) 3.5-inch form factor—for servers, desktop PCs, personal video recorders (PVRs), digital flat TVs, and portable external storage,

(b) 2.5-inch form factor—for notebook PCs, PVRs, game machine consoles, digital flat TVs, servers, external hard disk drives, and

(c) Sub-1.8-inch form factor—for handheld digital devices.

We currently supply spindle motors to all of the major hard-disk drive manufacturers in the world. In the fiscal year ended March 31, 2012, approximately 34.9% of our hard disk drive spindle motor sales came from Seagate Technology LLC, 26.0% from Western Digital Corporation, 21.1% from Hitachi Global Storage Technologies (which was acquired by Western Digital in March 2012), and the remainder from Samsung Electronics Co., Ltd. (which was acquired by Seagate Technology in December 2011) and Toshiba Corporation. See “Item 3.D. Key Information—Risk Factors—Our customer base is highly concentrated, and our sales would suffer if one or more of our significant customers substantially reduce or cancel orders for our products.”

Substantially all of our sales of hard disk drive spindle motor are denominated in U.S. dollars.

In this market, we currently compete with two motor suppliers: Samsung Electro-Mechanics Co., Ltd. and Minebea Technology Co., Ltd.

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Demand for hard disk drive spindle motors typically peaks in the autumn-winter season, driven by corporate IT spending and consumer spending in the back-to-school and holiday shopping seasons. The following are some of the key recent market trends we consider significant to our hard disk drives spindle motor business:

• Global demand for electronic data storage is expected to maintain sustainable growth, reflecting continued proliferation of personal and enterprise digital content that is stored, shared, protected and distributed in increasingly high volume.

• The hard disk drive market indicates a trend towards more economical, energy-efficient server disk drives with smaller footprints, reflecting the industry’s focus shifting further to cloud storage, a model of networked online storage where data is stored on multiple third-party servers at data centers.

• Handheld devices (e.g, smartphones and tablet PCs) are expected to remain a major competitor against the conventional small-form-factor PCs. Operating in the cloud storage environment and using solid-state drives as their only built-in storage media, these handheld devices are, on one hand, serving as a catalyst for the high-capacity, server-oriented hard disk drives market but, on the other hand, posing a constraint on the low-capacity hard disk drives market.

• Horizontal and vertical consolidations in the hard disk drive industry, primarily aimed to bolster server-class, high-capacity storage solutions and establish a blended storage platform featuring both hard disk drives and solid-state drives, have accelerated in recent years, influencing the competitive positions of the upstream component suppliers.

See “Item 3.D. Key Information—Risk Factors—We derive a substantial portion of our net sales from sales of spindle motors for hard disc drives, and a decrease in demand for, or prices of, HDDs could harm our business.”

In October 2011, severe flooding covered Thailand’s major industrial areas, causing serious disruptions in a range of PC components supply chains, most notably in the HDD supply chain. Many of our HDD motor manufacturing factories located in the flooded areas were also exposed to inundation, requiring us to suspend operations. By early December 2011, our operational conditions in Thailand were substantially normalized and returned in phases to pre-flood production levels. However, the uneven pace of recovery among the HDD components suppliers induced constant shortages of HDDs, resulting in inventory adjustments in the PC market, which in turned adversely affected our sales. See “Item 3.D. Key Information—Risk Factors—Because our facilities are concentrated in a limited number of locations, disruptions in one or more of those locations could have a material adverse impact on our business operations.” See also “Item 3.D. Key Information—Risk Factors—Natural disasters, public health issues, armed hostilities, terrorism and other causes over which we have little or no control could harm our business.”

(2) Other small precision brushless DC motors

The principal products in this product category are brushless DC motors used in optical disk drives primarily for PCs, digital video recorders, and high-end office equipment, including laser printers and hybrid copiers. A significant portion of the operations is conducted by Nidec Corporation and Nidec Sankyo Corporation. In this product category, our major customers are Japanese, Korean and Taiwanese electronics companies. Our competitors are for the most part Japanese and Korean component manufacturers, including our customers’ motor manufacturing divisions. This product category represented 22.9% of our Small Precision Motors sales for the fiscal year ended March 31, 2012.

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(3) Brushless DC Fans

Our brushless DC fans, which are used to disperse the excess heat generated by electronic components, thereby keeping electrical equipment cool, currently have applications in PCs and computer servers, game machine consoles, mobile phone base stations and a variety of other products that require cooling functions. This product category is managed by Nidec Corporation and Nidec Servo Corporation. We mainly supply brushless DC fans to the world’s major manufacturers of PCs, microprocessors, game machine consoles, and networking and communications equipment. Our competitors are for the most part Japanese and Taiwanese component manufacturers. This product category represented 9.9% of the Small Precision Motors sales for the fiscal year ended March 31, 2012.

(4) Other Small Precision Motors

This product category consists of various types of small electric motors other than brushless DC motors. Electric motors in this product category are manufactured and sold by our consolidated subsidiaries and include the following:

• stepping motors for refrigerator icemakers, optical disk drives, camcorders, digital still cameras and car navigation systems,

• vibration motors for mobile phones, brush DC motors for CD and DVD players, and

• servo motors for industrial equipment and home appliances.

For a discussion of our recent acquisition in the Other Small Precision Motors business, see “—A. History and Development of the Company.”

This product category represented 9.2% of the Small Precision Motors sales for the fiscal year ended March 31, 2012.

General Motors

The General Motors business group provides electric motors with power output higher than that of small precision motors and has applications in home appliances, automotive systems and industrial equipment. The home appliance motor business is primarily conducted by Nidec Motor Corporation, Nidec Techno Motor Corporation and Nidec Sole Motor Corporation S.R.L. The automotive motor business is conducted by Nidec Corporation, Nidec Motors & Actuators and Nidec Motor Corporation. The industrial motor business is mainly conducted by Nidec Motor Corporation. In the General Motors business, we manufacture and sell electric motors to many of the world’s major electronics companies, factory automation equipment manufacturers and automotive system manufacturers based in Europe, the United States, Japan and other Asian countries. We compete with independent electric motor suppliers worldwide and our customers’ own motor manufacturing units. For a discussion of our recent acquisitions of business, and internal reorganizations of subsidiaries, engaged in the General Motors business, see “—A. History and Development of the Company.”

This business group currently derives a significant portion of its revenues from the home appliances and automobile industries and represented 26.1% of our consolidated net sales for the fiscal year ended March 31, 2012.

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Machinery

The Machinery business group is managed by our consolidated subsidiaries and consists of various equipment and machinery mainly for industrial use. A significant portion of the operations of this business group are conducted by Nidec Sankyo Corporation in the transfer robot and card reader industry, Nidec-Shimpo Corporation (and Nidec-Kyori Corporation, which was merged into Nidec-Shimpo in April 2012) in the power transmission equipment and high-speed pressing machine industries, and Nidec-Read Corporation in the semiconductor package inspection equipment and other industries. The remaining operations are managed by Nidec Copal Corporation in the factory automation system industry. Our customers and competitors are primarily Japanese and Asian manufacturers. For a discussion of our recent acquisition of business, and internal reorganization of subsidiaries, engaged in the Machinery business, see “—A. History and Development of the Company.”

This business group generally exhibits a marked sensitivity to capital spending fluctuations, owing to its high exposure to the factory automation systems market. This business group represented 9.5% of our consolidated net sales for the fiscal year ended March 31, 2012.

Electronic and Optical Components

The Electronic and Optical Components business is conducted primarily by: Nidec Copal Corporation in the camera shutter and lens unit, metal casing and other industries, Nidec Sankyo Corporation in the precision plastic molding, home appliance unit and other industries, and Nidec Electronics Corporation in the switch, trimmer potentiometer, actuator and other industries. Our primary customers are the world’s major manufacturers of digital cameras, mobile phones and various control devices. We mainly compete with Japanese and other Asian component manufacturers, who are either independent or our customers’ own manufacturing units.

This business group covers a broad spectrum of component markets and is particularly influenced by trends in the digital camera market and private-sector equipment investment. The product range is diverse and manufacturing operations are frequently performed in small lots or on order. This business group represented 14.0% of our consolidated net sales for the fiscal year ended March 31, 2012.

Others

The Others business includes various operations not covered by other business groups, primarily consisting of manufacturing and sales of automobile parts and the provision of logistics and other services. Those operations are conducted by Nidec Tosok Corporation and Nidec Corporation and its other subsidiaries. This business group represented 5.7% of our consolidated net sales for the fiscal year ended March 31, 2012.

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Sales by Geographic Market

The following tables present a breakdown of our geographic revenues based on the locations of business entities generating sales and the locations of customers for each of the periods indicated:

Geographic revenues based on the locations of business entities generating sales

	Yen in millions, except percentage data
	For the year ended March 31
	2010				2011				2012
Japan	¥	245,977	43.0	%	¥	295,376	43.7	%	¥	260,470	38.2	%
U.S.A.		11,352	2.0	%		46,579	6.9	%		71,317	10.5	%
Singapore		33,673	5.9	%		28,015	4.1	%		40,595	5.9	%
Thailand		102,261	17.9	%		99,932	14.8	%		75,908	11.1	%
The Philippines		14,884	2.6	%		10,657	1.6	%		19,683	2.9	%
China		122,833	21.5	%		139,264	20.6	%		148,553	21.8	%
Other		40,572	7.1	%		56,165	8.3	%		65,794	9.6	%
Consolidated total	¥	571,552	100.0	%	¥	675,988	100.0	%	¥	682,320	100.0	%

Geographic revenues based on the locations of customers

	Yen in millions, except percentage data
	For the year ended March 31
	2010				2011				2012
North America	¥	17,604	3.1	%	¥	55,237	8.2	%	¥	79,997	11.7	%
Asia		373,694	65.4	%		390,218	57.7	%		358,653	52.5	%
Europe		36,419	6.4	%		51,887	7.7	%		59,987	8.8	%
Other		2,628	0.4	%		5,440	0.8	%		7,291	1.1	%
Overseas sales total		430,345	75.3	%		502,782	74.4	%		505,928	74.1	%
Japan		141,207	24.7	%		173,206	25.6	%		176,392	25.9	%
Consolidated total	¥	571,552	100.0	%	¥	675,988	100.0	%	¥	682,320	100.0	%

Notes:

(1) Inter-group transactions have been eliminated in consolidation.

(2) Operations of the specialty lens actuator business, formerly classified in the “Other small precision brushless DC motors” business group, the tape drive and disk drive mechanism businesses, formerly classified in the “Electronic and Optical Components” business group, and the compact digital camera lens unit business, formerly classified in the “Electronic and Optical Components” business group, were reclassified as discontinued operations in March 2012 in accordance with ASC205-20 (Presentation of Financial Statements-Discontinued Operations). Prior-year sales amounts in the table have been retrospectively adjusted to reflect this reclassification.

(3) Operations of the specialty lens units business, formerly classified in the “Electronic and Optical Components” business group, were reclassified as discontinued operations in March 2011 in accordance with ASC205-20 (Presentation of Financial Statements-Discontinued Operations). Prior-year sales amounts in the table have been retrospectively adjusted to reflect this reclassification.

See “Item 3.D. Key Information—Risk Factors—We rely to a large extent on production and sales in developing countries which may become politically or economically unstable and face risks resulting from unanticipated developments in those countries.”

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Product Development and Engineering

Each of our business groups has its own product development and design teams that continuously enhance our existing products and develop new products for our growing base of customers that require custom and standard solutions. We have some of the industry’s most sophisticated motor development and testing laboratories, including those for hard disk drive motors and automotive motors. We believe these capabilities provide a significant competitive advantage in developing high quality motors with leading environmentally friendly design characteristics, such as low noise, improved safety, reliability and energy efficiency.

Supply Sources

Our major requirements for basic raw materials include aluminum, steel, copper, electronics, and to a lesser extent, rare earth minerals, plastics and other petroleum-based chemicals. We have multiple supply sources for each of our major requirements and we are not significantly dependent on any one or a few suppliers. Although the recent increase in prices of rare earth magnets has negatively affected our margins for some of our businesses, all of the raw materials and various purchased components required for our products have generally been available in sufficient quantities.

See “Item 3.D. Key Information—Risk Factors—If raw materials or components for our products are not available in quantities or at prices that we expect, our production could be significantly harmed.”

Government Regulation and Environmental Standards

Our business activities are subject to various governmental regulations in the jurisdictions in which we operate, including those relating to customs, import and export control, foreign exchange controls, competition or antitrust, intellectual property, protection of the environment, product safety, and labor.

In Japan, we are subject to environmental regulation under the Air Pollution Control Law, the Water Pollution Control Law, the Wastes Disposal and Public Cleaning Law, the Law for the Promotion of Effective Utilization of Resources, the Basic Law for Establishing a Recycling-based Society and other laws. We are also subject to local regulations which in some cases impose requirements more stringent than the national requirements. However, we currently do not believe that these regulations have a significant impact on our operations since we do not use large volumes of hazardous or toxic chemicals to manufacture our products or dispose of large amounts of waste into the environment.

Our overseas operations are also subject to environmental regulation. Our operations in the United States, for example, are subject to extensive federal and state environmental laws and regulations. Our operations in the European Union (“EU”) are also subject to EU and national environmental laws and regulations. Any electronic or electrical equipment sold in the EU are subject to the Restriction of Hazardous Substances Directive (RoHS) 2002/95/EC. This Directive indicates that any products entering the EU must comply with its limits on the content of certain hazardous substances. We seek to ensure that all of our products comply with the Directive because of the possibility that products we make and sell elsewhere could be eventually be sold in the EU as components of other companies’ products.

Environmental considerations are critical in measuring our product competitiveness. As part of our ongoing effort to comply with environmental laws and regulations, we constantly monitor and adapt to changes in such requirements applicable to our operations and strive for strict compliance with these requirements. Almost all of our domestic and overseas manufacturing plants have either received, or are scheduled to receive within the next few years, certifications under the ISO 14001 standards on environmental management systems of the International Organization for Standardization. Also, under a control framework

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established to eliminate lead from our production process, a predominant portion of our products (with a few exceptions required by certain customers) currently use lead-free solder. However, our compliance effort may require substantial financial and other resources or prove inadequate, particularly when stricter regulatory requirements are imposed.

See “Item 3.D. Key Information—Risk Factors—We are subject to various laws and regulations, and our failure to comply may harm our business.”

Intellectual Property

In the ordinary course of business, we submit additional patent applications in Japan, the United States, China and other countries. We also seek patent protection in various foreign countries where our patented technologies are used. While, from time to time, we seek to enforce our patents in patent infringement lawsuits or otherwise, we do not believe that there is any single patent or group of patents which are critical to our principal business segments.

Legal Proceedings

On September 25, 2008, we filed a lawsuit in the Tokyo District Court against YASKAWA Electric Corporation, or YASKAWA, for infringement of Japanese Patent Nos. 3973006 and 3973048, which relate to LCD panel handling robots. On March 31, 2010, we brought an additional lawsuit in the Tokyo District Court against YASKAWA for infringement of Japanese Patent No. 3973048 to include additional products of YASKAWA. In the meantime, YASKAWA filed a petition with the Japanese Patent Office, or JPO, to invalidate the patents. JPO issued a judgment in favor of YASKAWA. We appealed JPO’s judgment to the Intellectual Property High Court of Japan, which decided in favor of YASKAWA. On February 7, 2012, we appealed the Intellectual Property High Court’s decision to the Supreme Court of Japan, which dismissed our appeal and remanded the case to the Tokyo District Court. On February 28, 2012, the Tokyo District Court issued a decision in favor of YASKAWA.

We are also involved in several other actions and proceedings in Japan and overseas in the ordinary course of our business. Based upon the information currently available to us and our domestic and overseas legal counsel, we believe that the ultimate resolution of such actions and proceedings will not, in the aggregate, have a material adverse effect on our financial condition or results of operations.

See “Item 3.D. Key Information—Risk Factors—We could be harmed by litigation involving patents and other intellectual property rights.”

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C. Organizational Structure.

The following table and the discussion that follows present summary information on our major consolidated subsidiaries as of March 31, 2012:

Name	Country	Principal business	Percentage owned by us as of March 31, 2012
			(%)
Consolidated subsidiaries
Nidec Electronics (Thailand) Co., Ltd.	Thailand	Manufacture and sales of spindle motors for hard disk drives		99.9	%
Nidec (Zhejiang) Corporation	China	Manufacture of spindle motors for hard disk drives and components for precision motors		100.0	%
Nidec (Dalian) Limited	China	Manufacture of small brushless DC motors for PC peripheral devices, fans, and components for precision motors		100.0	%
Nidec Singapore Pte. Ltd.	Singapore	Sales of spindle motors for hard disk drives, other small precision brushless DC motors and brushless DC fans		100.0	%
Nidec (H.K.) Co., Ltd.	China	Sales of spindle motors for hard disk drives, other small precision brushless DC motors and brushless DC fans		100.0	%
Nidec Philippines Corporation	Philippines	Manufacture of spindle motors for hard disk drives		99.9	%
Nidec Sankyo Corporation*1	Japan	Manufacture and sales of micro motors, motor drive units, precision plastic molds, mechanical units, industrial robots, card readers, and musical movements		77.4	%
Nidec Copal Corporation*1	Japan	Manufacture and sales of optical, electronic and information equipment, photo equipment and factory automation equipment		66.0	%
Nidec Tosok Corporation*1	Japan	Manufacture and sales of precision automotive parts, automatic measuring equipment, air/electronic gauges, precision ball screws, and other precision measuring devices		71.8	%
Nidec Copal Electronics Corporation*1	Japan	Manufacture and sales of electronic circuit components, pressure sensors, actuators and potentiometers		65.4	%
Nidec Techno Motor Corporation*2	Japan	Manufacture and sales of general motors for home electronics, home appliances, industrial equipment and automobiles, general motor-based equipment, electric tools, water supply pumps, and others		100.0	%
Nidec Motor Corporation	U.S.A.	Manufacture and sales of large and medium-size drive motors		100.0	%
Nidec Motors & Actuators	France	Manufacture and sales of air flow systems, seat positioning systems, body closure systems, and braking, drive-line and steering systems		100.0	%

Notes:

*1 Listed on one or more stock exchanges in Japan.

*2 Renamed from “Nidec Techno Motor Holdings Corporation” on April 1, 2012.

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D. Property, Plants and Equipment.

Our principal executive offices are located in Kyoto, Japan and occupy approximately 36,119 square meters of office space. At March 31, 2012, we operated manufacturing and sales facilities through 27 Japanese subsidiaries and 142 foreign subsidiaries. These facilities are located in Japan, China, Europe, Thailand, Vietnam, the United States, Singapore, Mexico, the Philippines, Indonesia, Taiwan, South Korea, Malaysia, India, Brazil, Canada, Colombia and Venezuela.

The following table sets forth information, as of March 31, 2012, with respect to our principal manufacturing facilities and other facilities:

Facility name	Location	Floor space (square meters)		Principal products and function
In Japan
Shiga Technical Center(1)	Shiga		39,576	Development and manufacture of small high-precision motors and general motors. Production engineering and manufacturing base support
Nidec Copal Corporation Koriyama Technical Center(1)	Fukushima		37,538	Manufacture of electric and optical components
Corporate Headquarters and Central Technical Laboratories(1)	Kyoto		36,119	Basic research and development of fluid dynamic bearing technology development
Nidec Servo Corporation(1)	Gunma		34,128	Development and manufacture of other small precision brushless DC motors, brushless DC fans and other small precision motors
Nidec-Shimpo Corporation(1)	Kyoto		29,322	Development and manufacture of machinery
Nidec Techno Motor Corporation Kyushu Technical Center(5)	Fukuoka		27,459	Development and manufacture of general motors for home appliances and industrial use
Nidec Techno Motor Corporation Obama Technical Center(2)	Fukui		24,600	Manufacture of general motors for home appliances and industrial use
Nidec Copal Precision Parts Corporation Niigata Factory(1)	Niigata		24,157	Manufacture of electronic and optical components
Nidec Tosok Corporation Head Office and Technical Center(1)	Kanagawa		23,471	Development and manufacture of machinery
Nagano Technical Center(1)	Nagano		21,222	Development and manufacture of spindle motors for hard disk drives, manufacturing base support
Nidec Sankyo Corporation Ina Facility(1)	Nagano		19,953	Manufacture of machinery
Nidec Copal Corporation Shiojiri Factory(1)	Nagano		16,452	Manufacture of machinery
Nidec Tosok Corporation Yamanashi Factory(1)	Yamanashi		16,320	Manufacture of automobile parts

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Facility name	Location	Floor space (square meters)		Principal products and function
Outside Japan
Nidec (Dalian) Limited(5)	China		94,657	Manufacture of other small precision blushless DC motors, blushless DC fans and general motors for automobiles
Nidec Philippines Corporation(3)	Philippines		85,302	Manufacture of spindle motors for hard disk drives
Nidec Tosok (Vietnam) Co., Ltd.(2)	Vietnam		55,572	Manufacture of automobile parts
Nidec Shibaura (Zhejiang) Co., Ltd.(5)	China		52,097	Manufacture of general motors for home appliances and industrial use
Nidec Copal Precision (Vietnam) Corporation(2)	Vietnam		48,000	Manufacture of electronic and optical components
Nidec (Zhejiang) Corporation(5)	China		47,400	Manufacture of spindle motors for hard disk drives
Nidec Motors & Actuators Mexico S. de R.L. de C.V.(1)	Mexico		46,769	Manufacture of general motors for automobiles
Nidec Electronics (Thailand) Co., Ltd. Rojana Factory(1)	Thailand		43,230	Manufacture of spindle motors for hard disk drives
Nidec Sankyo (Zhejiang) Corporation(5)	China		43,128	Manufacture of machinery and electronic and optical components
Nidec Electronics (Thailand) Co., Ltd. Rangsit Factory(1)	Thailand		43,110	Manufacture of spindle motors for hard disk drives
Nidec-Shimpo (Zhejiang) Corporation(5)	China		41,678	Manufacture of machinery
Nidec (Dongguan) Limited(4)	China		39,880	Manufacture of other small precision brushless DC motors and brushless DC fans
Nidec Copal (Thailand) Co., Ltd.(1)	Thailand		39,771	Manufacture of electronic and optical components
Nidec Sankyo Electronics (Shaoguan) Co., Ltd.(2)	China		38,000	Manufacture of other small precision brushless DC motors
Nidec Precision (Thailand) Co., Ltd. Rojana Factory(1)	Thailand		37,630	Manufacture of spindle motors for hard disk drives
Nidec Seimitsu Motor Technology (Shenzhen) Co., Ltd.(4)	China		37,300	Manufacture of other small precision motors
Nidec Subic Philippines Corporation(2)	Philippines		36,331	Manufacture of spindle motors for hard disk drives
Nidec Vietnam Corporation(2)	Vietnam		36,314	Manufacture of brushless DC fans
Nidec Motor Corporation Mena, AR(1)	U.S.A.		32,000	Manufacture of general motors for home appliances and industrial use

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Facility name	Location	Floor space (square meters)		Principal products and function
Nidec Motors & Actuators (Germany) GmbH(1)	Germany		31,120	Manufacture of general motors for automobiles
Nidec Automobile Motor (Zhejiang) Corporation(4)	China		30,438	Manufacture of general motors for automobiles
Nidec Shibaura Electronics (Thailand) Co., Ltd.(1)	Thailand		28,476	Manufacture and sales of general motors for home appliances and industrial use
Nidec Nissin (Dongguan) Corporation(4)	China		28,307	Manufacture of electronic and optical components
Nidec Motor Corporation Paragould, AR(1)	U.S.A.		28,000	Manufacture of general motors for home appliances and industrial use
Nidec Sole Motor Corporation S.R.L.(1)	Italy		27,918	Development and manufacture of general motors for home appliances and industrial use
Nidec Component Technology (Suzhou) Co., Ltd.(1)	China		27,292	Manufacture of other small precision motors
Nidec Copal (Zhejiang) Co., Ltd.(5)	China		27,145	Manufacture of machinery and electronic and optical components
Nidec Tosok System Engineering (Zhejiang) Corporation(4)	China		26,480	Manufacture of machinery
Nidec Sankyo Vietnam Corporation(2)	Vietnam		26,374	Manufacture of other small precision brushless DC motors
Nidec Copal Electronics (Zhejiang) Co., Ltd.(5)	China		26,000	Manufacture of electronic and optical components
Nidec Sankyo Electronics (Dongguan) Corporation(4)	China		25,600	Manufacture of other small precision brushless DC motors, and electronic and optical components
Motores U.S. de Mexico S.A. de C.V.(1)	Mexico		25,000	Manufacture of general motors for home appliances and industrial use
SC WADO Co., Ltd.(1)	Thailand		24,136	Manufacture of spindle motors for hard disk drives
Nidec Precision (Thailand) Co., Ltd. Ayutthaya Factory(1)	Thailand		23,300	Manufacture of spindle motors for hard disk drives
Emerson (China) Motor Co., Ltd.(4)	China		20,000	Manufacture of general motors for home appliances and industrial uses
Nidec Sole Motor Hungary K.F.T.(1)	Hungary		19,489	Manufacture of general motors for home appliances and industrial use
Compania de Motores Domesticos, S.A. de C.V.(1)	Mexico		19,000	Manufacture of general motors for home appliances and industrial use
Nidec Motor Corporation Frankfort, IN(1)	U.S.A.		18,000	Manufacture of general motors for home appliances and industrial use

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Facility name	Location	Floor space (square meters)		Principal products and function
Nidec Servo Vietnam Corporation(2)	Vietnam		18,000	Manufacture of other small precision brushless DC motors, brushless DC fans and other small precision motors
Nidec (Shaoguan) Limited(4)	China		17,585	Manufacture of other small precision brushless DC motors and brushless DC motors
Nidec Seimitsu Motor Parts (Shenzhen) Co., Ltd.(4)	China		17,000	Manufacture and sales of other small precision motors

Notes:

(1) We own both the property and the facilities.

(2) We lease the property and own the facilities.

(3) Nidec Philippines Corporation leases the property from Nidec Development Philippines Corporation, a joint venture company with Prudential BK established for the purpose of purchasing land in the Philippines. We own the facilities.

(4) We lease both the property and the facilities.

(5) Facilities are partially owned and partially leased by us.

In addition to the above facilities, we have a number of other smaller factories located worldwide. In Japan, we also have sales and service offices which are located primarily in Tokyo, Nagoya and Osaka.

As of March 31, 2012, the aggregate book value of the land and buildings we owned was ¥104 billion, and the aggregate book value of machinery and equipment we owned was ¥105 billion. In addition to the property we own, we lease other equipment used in our operations.

In October 2011, we incurred significant damage to our production capacity in Thailand due to massive flooding, which inundated the buildings, machinery, and equipment of many of our subsidiaries operating in the country. Due to the water damage to the fixed assets and inventories, these subsidiaries were required to temporarily suspend their operations. Since all of our flood-afflicted operations in Thailand resumed operations by early December 2011, we consider our manufacturing and other facilities to be well maintained and believe that our plant capacity is sufficient to meet our current requirements and plans. Except as a result of the flooding in Thailand, we did not experience material underutilization of our production capacity in the year ended March 31, 2012.

See “Item 3.D. Key Information—Risk Factors—Because our facilities are concentrated in a limited number of locations, disruptions in one or more of those locations could have a material adverse impact on our business operations.”

For information on our plans for investments in manufacturing plants and facilities, see “—A. History and Development of the Company.”

Item 4A. Unresolved Staff Comments.

None.

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Item 5. Operating and Financial Review and Prospects.

A. Operating Results.

You should read the following discussion of our financial condition and results of operations together with our audited consolidated financial statements and related notes and other information included elsewhere in this annual report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth in “Item 3.D. Key Information—Risk Factors” and elsewhere in this annual report.

Overview

We are a leading manufacturer of spindle motors for hard disk drives in the world. We manufacture and sell spindle motors for hard disk drives and various other small precision brushless direct current electricity, or DC, motors and other products through 27 subsidiaries in Japan and 142 subsidiaries in other countries, including China, Thailand, Vietnam, the United States, Singapore, Mexico, Indonesia, the Philippines, Taiwan, Germany, South Korea, Malaysia, the United Kingdom, India, Brazil, the Netherlands, France, Poland, Italy, Spain, Hungary, Canada, Colombia and Venezuela, as of March 31, 2012.

Principal Items in Our Statement of Operations

Net sales. Our net sales are generated primarily from the sales of our products. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sale price is fixed and collectability is reasonably assured. As such, revenue is generally recognized at the time of delivery to customers in domestic sales and at the time of shipment for export sales with respect to small precision motors, general motors and electronic and optical components, and upon receipt of final customer acceptance with respect to machinery. We maintain data with respect to net sales by product type. We also maintain data with respect to net sales of our products based on the entities which are our operating segments. For a detailed discussion of our operating segments, see “—Segment Information” below.

Cost of products sold. Our cost of sales consists of fixed costs and variable costs, which are primarily material, parts, and manufacturing expenses, including personnel costs, depreciation, and facility maintenance costs. We periodically assess the market value of our inventory based on sales trends and forecasts and technological changes. We write off inventories when it is apparent that there is no possibility of future sales or usage. The write off of inventory is recorded as cost of sales. Fixed costs limit our ability to reduce costs in times of decreased demand, which may have an adverse effect on our operating results.

Selling, general and administrative expenses. Our selling, general and administrative expenses consist primarily of salaries, commissions, and other expenses relating to our selling, general and administrative activities.

Research and development expenses. Research and development expenses primarily related to personnel costs and depreciation of equipment relating to our research and development activities. See “—C. Research and Development, Patents and Licenses, etc.”

Other income (expense). Other income (expense) consists primarily of foreign exchange gains or losses and gains or losses from marketable securities.

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Our Recent Acquisition Activities

As discussed in “Item 4.A. Information on the Company—History and Development of the Company,” we have sought growth by acquiring or investing in companies with motors, drives and other related products and technologies. Depending on the circumstances, we acquire a majority interest or a substantial minority interest in the target companies. Our approach has been to identify underperforming companies with advanced products and technologies. We have recently entered into the following transactions:

• In July 2011, we acquired Sanyo Seimitsu Co., Ltd., a manufacturer of vibration motors for mobile phones and other small precision DC motors, to further expand our small precision motor business. The company was subsequently renamed “Nidec Seimitsu Corporation.”

• In April 2012, Nidec Shimpo acquired The Minster Machine Company, a U.S. manufacturer of press machines, for ¥7,480 million in cash to expand our machinery businesses.

• In April 2012, we and Nidec Sankyo Corporation, a consolidated subsidiary in which we hold an approximately 75% ownership interest, entered into a share exchange agreement to acquire the remaining interest in Nidec Sankyo. The share exchange transaction is expected to become effective on October 1, 2012 in accordance with a resolution adopted at an ordinary general meeting of Nidec Sankyo shareholders held on June 18, 2012. We plan to use 3,175,755 shares of our common stock held in treasury as consideration for the share exchange transaction.

• In May 2012, we acquired Ansaldo Sistemi Industriali S.p.A., an Italian manufacturer of industrial motors, generators and drives, to expand our industry motor business.

• In June 2012, we agreed to acquire a 51% ownership interest in Jiangsu Kaiyu Auto Appliance Co., Ltd., a Chinese manufacturer of brush motors for electric power steering, subject to regulatory approvals and customary closing conditions.

For more information, see Notes 3 and 26 to our audited consolidated financial statements included elsewhere in this annual report and “Item 3.D. Key Information—Risk Factors—Our growth has been based in part on acquisitions of, or investments in, other companies, and our future growth could be adversely affected if we make acquisitions or investments that fail to achieve their intended benefits, or if we are unable to find suitable acquisition or investment targets.”

Effects of Foreign Currency Fluctuations

A significant portion of our business is conducted in currencies other than the yen, most significantly, the U.S. dollar. Our business is thus sensitive to fluctuations in foreign currency exchange rates, especially the yen-U.S. dollar exchange rate. As of March 31, 2010, 2011 and 2012, the exchange rate of the yen against the U.S. dollar was ¥93.04, ¥83.15 and ¥82.19 to the U.S. dollar, respectively. In addition, as a result of our acquisition of Emerson Electric Co.’s motors and controls business in September 2010, we are also exposed to the risk of fluctuations in the exchange rate between the U.S. dollar and the Mexican peso.

Our consolidated financial statements are subject to both translation risk and transaction risk. Translation risk is the risk that our consolidated financial statements for a particular period or for a particular date are affected by changes in the prevailing exchange rates of the currencies in those countries in which we conduct business against the Japanese yen. The translation effect, even if it is substantial, is a reporting consideration and does not reflect our underlying results of operations.

Transaction risk arises when the currency structure of our costs and liabilities deviates from the currency structure of our sales proceeds and assets. A substantial portion of our overseas sales are made in U.S. dollars. While sales denominated in U.S. dollars are, to a significant extent, offset by U.S. dollar denominated costs, we generally have had a significant net long U.S. dollar position. With respect to costs not denominated in U.S. dollars, we believe that we have been able to reduce the level of transaction risk to the extent that our overseas subsidiaries incur costs in currencies that generally follow the U.S. dollar. Transaction risk remains for products sold in U.S. dollars to the extent that we must purchase parts for our products from Japan, the costs for which are denominated in yen.

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See “Item 3.D. Key Information—Risk Factors—Because our sales to overseas customers are denominated predominantly in U.S. dollars, we are exposed to exchange rate risks that could harm our results of operations and shareholders’ equity.”

Changes in the fair values of our foreign exchange forward contracts and changes in option prices under our foreign currency option agreements are recognized as gains or losses on derivative instruments in our consolidated statement of income. For a more detailed discussion of these instruments, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk” and Note 19 to our audited consolidated financial statements included elsewhere in this annual report.

Effects of Other Significant Recent Developments

Flooding in Thailand. We were severely affected by the flooding in Thailand that occurred in October 2011. The flooding has disrupted customer supply chains for some of our main product lines, including small precision motors for hard disk drives, and electronic and optical components. The flooding also caused our manufacturing facilities in Thailand, which represent more than 60% of our production capacity with respect to small precision motors for hard disk drives, which is one of our key products, to temporarily suspend operations. We promptly launched our recovery efforts in Thailand while augmenting the production capacity of, and transferring a portion of the manufacturing operations in Thailand to, our manufacturing facilities in the Philippines and China based on a new risk diversification policy. As a result, the total number of units of small precision motors for hard disk drives manufactured in the three months ended December 31, 2011 was approximately 70% of that in the three months ended September 30, 2011, and the total number of units of such motors sold in the three months ended December 31, 2011 was approximately 80% of that in the three months ended September 30, 2011. Although our operational conditions in Thailand were substantially normalized and returned in phases to pre-flood production levels by early December 2011, the uneven pace of recovery among the HDD components suppliers induced constant shortages of HDDs, resulting in inventory adjustments in the PC market, which in turn adversely affected our sales. The adverse impact of the flooding may continue in the current fiscal year ending March 31, 2013.

For further information, see Note 22 to our audited consolidated financial statements included elsewhere in this annual report. See also “Item 3.D. Key Information—Risk Factors—Because our facilities are concentrated in a limited number of locations, disruptions in one or more of those locations could have a material adverse impact on our business operations.”

Earthquake and Subsequent Events in Japan. The large-scale earthquake in northern Japan in March 2011 and the ensuing power production shortages resulting from the reduction of nuclear power production disrupted the supply chains of various industries in Japan, including the computer and automobile industries where some of our customers operate, particularly in the fiscal quarter ended June 30, 2011. Electricity production shortages in wider regions of Japan as well as price increases are expected in the fiscal quarter ending September 30, 2012, which may affect our manufacturing, research and development, and other operations.

See also “Item 3.D. Key Information—Risk Factors—Natural disasters, public health issues, armed hostilities, terrorism and other causes over which we have little or no control could harm our business.”

Global Economic Recession. In the fiscal year ended March 31, 2012, the sovereign debt crisis in Europe deteriorated into a global economic recession, which adversely affected the demand for our products in many of our markets. If the global economy remains stagnant or worsens as a result of developments or events in Europe or any other market, our sales may significantly decrease.

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See also “Item 3.D. Key Information—Risk Factors—An unexpected drastic decline in the global economies may result in reduced demand for our products.”

Issuance of Convertible Bonds. We issued an aggregate principal amount of ¥100,000 million of euro yen convertible bonds due 2015 on September 21, 2010. The net proceeds of the issuance of convertible bonds were applied towards the repayment of existing short-term borrowings. Through the issuance of corporate bonds, we sought to maintain our financial agility in mergers and acquisitions, research and development activities and facilities investments by reducing interest and other financing expenses.

For further information, see Note 11 to our audited consolidated financial statements included elsewhere in this annual report.

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Results of Operations—Year Ended March 31, 2012 Compared to Year Ended March 31, 2011

The following table sets forth selected information relating to our income and expense items for each of the three years ended March 31:

	Yen in millions
	For the year ended March 31
	2010			2011			2012
Net sales	¥	571,552		¥	675,988		¥	682,320
Operating expenses:
Cost of products sold		421,190			500,034			523,729
Selling, general and administrative expenses		46,809			55,348			55,471
Research and development expenses		24,271			27,737			30,050
		492,270			583,119			609,250
Operating income		79,282			92,869			73,070
Other income (expense):
Interest and dividend income		822			1,049			1,634
Interest expense		(690	)		(355	)		(299	)
Foreign exchange loss, net		(2,961	)		(9,108	)		(1,756	)
Gain (loss) from marketable securities, net		52			(238	)		(202	)
Other, net		(534	)		(2,251	)		(1,591	)
		(3,311	)		(10,903	)		(2,214	)
Income from continuing operations before income taxes		75,971			81,966			70,856
Income taxes		(17,568	)		(18,309	)		(18,801	)
Equity in net (loss) income of affiliated companies		(45	)		6			0
Income from continuing operations		58,358			63,663			52,055
Loss on discontinued operations		(2,207	)		(6,171	)		(7,768	)
Consolidated net income		56,151			57,492			44,287
Less: Net income attributable to noncontrolling interests		(4,190	)		(5,159	)		(3,556	)
Net income attributable to Nidec Corporation	¥	51,961		¥	52,333		¥	40,731
	Yen
Per share data:
Earning per share—basic
Income from continuing operations attributable to Nidec Corporation	¥	384.91		¥	406.10		¥	336.33
Loss on discontinued operations attributable to Nidec Corporation		(11.87	)		(30.19	)		(40.08	)
Net income attributable to Nidec Corporation		373.04			375.91			296.25
Earning per share—diluted
Income from continuing operations attributable to Nidec Corporation	¥	384.91		¥	391.96		¥	314.41
Loss on discontinued operations attributable to Nidec Corporation		(11.87	)		(29.16	)		(37.52	)
Net income attributable to Nidec Corporation		373.04			362.80			276.89
Cash dividends paid	¥	55.00		¥	80.00		¥	90.00

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	Yen in millions
	For the year ended March 31
	2010			2011			2012
Net income attributable to Nidec Corporation
Income from continuing operations attributable to Nidec Corporation	¥	53,614		¥	56,536		¥	46,242
Loss on discontinued operations attributable to Nidec Corporation		(1,653	)		(4,203	)		(5,511	)
Net income attributable to Nidec Corporation	¥	51,961		¥	52,333		¥	40,731

As of September 30, 2009, we discontinued our semiconductor manufacturing equipment (“SME”) business which had previously been included in the “machinery” product category. All prior period SME amounts have been reclassified to discontinued operations pursuant to the ASC 205-20 “Presentation of Financial Statements-Discontinued Operations” to enable comparisons between the relevant amounts for the periods indicated.

As of March 31, 2011, we discontinued our specialty lens unit (“SLU”) business, which was established in the year ended March 31, 2010 and had previously been included in the “electronic and optical components” product category. All prior period SLU amounts have been reclassified to discontinued operations pursuant to the ASC 205-20 “Presentation of Financial Statements-Discontinued Operations to enable comparisons between the relevant amounts for the periods indicated.

As of March 31, 2012, we discontinued our lens actuator (“LAC”) business which had previously been included in the “other small precision brushless DC motors” product category. As of the same date, we also discontinued our tape drive and disk drive mechanism (“PGN”) businesses and our compact digital camera lens unit (“CLU”) business, both of which had previously been included in the “electronic and optical components” product category. All prior period LAC, PGN and CLU amounts have been reclassified to discontinued operations pursuant to the ASC 205-20 “Presentation of Financial Statements-Discontinued Operations” to enable comparisons between the relevant amounts for the periods indicated.

For more information, see Note 24 to our audited consolidated financial statements included elsewhere in this annual report.

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Net Sales

The following table is a summary of our net sales for the years ended March 31, 2011 and 2012 by product category. For a detailed discussion of our product categories, see “Item 4.B. Information on the Company—Business Overview.”

	(Yen in millions)
	2011		2012		Inc/Dec			%
Net sales:
Small precision motors:
Hard disk drives spindle motors	¥	196,265	¥	176,932	¥	(19,333	)		(9.9	)%
Other small precision brushless DC motors		70,149		69,753		(396	)		(0.6	)%
Brushless DC fans		33,801		30,327		(3,474	)		(10.3	)%
Other small precision motors		18,883		28,174		9,291			49.2	%
Sub-total		319,098		305,186		(13,912	)		(4.4	)%
General motors		137,251		178,214		40,963			29.8	%
Machinery		77,329		64,904		(12,425	)		(16.1	)%
Electronic and optical components		107,693		95,580		(12,113	)		(11.2	)%
Others		34,617		38,436		3,819			11.0	%
Consolidated total	¥	675,988	¥	682,320	¥	6,332			0.9	%

Our net sales increased ¥6,332 million, or 0.9%, from ¥675,988 million for the year ended March 31, 2011 to ¥682,320 million for the year ended March 31, 2012. This increase was primarily due to the contributions of newly consolidated subsidiaries, mainly including Nidec Motor Corporation and its subsidiaries (“Nidec Motor”), the former Emerson Electric Co.’s motors and controls business, and Nidec Seimitsu Corporation and its subsidiaries (“Nidec Seimitsu”), a manufacturer of vibration motors for mobile phones and other small precision DC motors. We acquired Nidec Motor in September 2010 and Nidec Seimitsu in July 2011. We recognized Nidec Motor’s sales of ¥35,458 million for the six months ended March 31, 2011, and ¥68,810 million for the year ended March 31, 2012. We recognized Nidec Seimitsu’s sales of ¥12,018 million for the nine months ended March 31, 2012.

Excluding the impact of Nidec Motor and Nidec Seimitsu, our net sales decreased ¥39,038 million, or 6.1%, from ¥640,530 million for the year ended March, 2011 to ¥601,492 million for the year ended March 31, 2012. This decrease was mainly due to a decrease in sales of products in the “small precision motors,” “machinery” and “electronic and optical components” categories. The decreases in sales of these products were primarily due to the appreciation of the Japanese yen against the U.S. dollar and the disruptions to our manufacturing facilities and customer supply chains caused by the flooding in Thailand in October 2011.

In addition, particularly in the three months ended June 30, 2011, we were also adversely impacted by customer supply chain disruptions caused by the earthquake, the tsunami and the nuclear power plant accidents in northeastern Japan in March 2011.

For a more detailed discussion of recent developments, see “—Overview.”

(Small precision motors)

Net sales of small precision motors decreased ¥13,912 million, or 4.4%, from ¥319,098 million for the year ended March 31, 2011 to ¥305,186 million for the year ended March 31, 2012. Net sales of each product category included in “small precision motors” are as discussed below.

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Hard disk drives spindle motors

Net sales of hard disk drives spindle motors decreased ¥19,333 million, or 9.9%, from ¥196,265 million for the year ended March 31, 2011 to ¥176,932 million for the year ended March 31, 2012. This decrease was mainly due to the disruptions to our manufacturing facilities and customer supply chains for hard disk drives caused by the flooding in Thailand. The number of units sold of small precision motors for hard disk drives for the year ended March 31, 2012 decreased approximately 3% compared to the year ended March 31, 2011. The average unit price of spindle motors for the year ended March 31, 2012 increased approximately 1% on a U.S. dollar basis and decreased approximately 7% on a Japanese yen basis compared to the year ended March 31, 2011, reflecting the 8% appreciation of the Japanese yen against the U.S. dollar.

Sales of spindle motors for 2.5-inch and 3.5-inch hard disk drives for the year ended March 31, 2012 decreased approximately 6% and 14%, respectively, compared to the year ended March 31, 2011. The number of units sold of spindle motors for 2.5-inch hard disk drives for the year ended March 31, 2012 increased approximately 4% compared to the year ended March 31, 2011, while the number of units sold of spindle motors for 3.5-inch hard disk drives for the year ended March 31, 2012 decreased approximately 10% compared to the year ended March 31, 2011. The average unit price of spindle motors for 2.5-inch hard disk drives for the year ended March 31, 2012 decreased approximately 2% on a U.S. dollar basis and decreased approximately 9% on a Japanese yen basis compared to the year ended March 31, 2011. The average unit price of spindle motors for 3.5-inch hard disk drives for the year ended March 31, 2012 increased approximately 4% on a U.S. dollar basis and decreased approximately 4% on a Japanese yen basis compared to the year ended March 31, 2011.

Net sales of hard disk drives spindle motors accounted for 29.0% of total net sales for the year ended March 31, 2011 and 25.9% of total net sales for the year ended March 31, 2012.

Other small precision brushless DC motors

Net sales of our other small precision brushless DC motors decreased ¥396 million, or 0.6%, from ¥70,149 million for the year ended March 31, 2011 to ¥69,753 million for the year ended March 31, 2012. With respect to Nidec Corporation and its direct-line subsidiaries, sales of other small precision brushless DC motors for the year ended March 31, 2012 decreased approximately 11% compared to the year ended March 31, 2011. This 11% decrease in sales was mainly due to an approximately 8% appreciation of the Japanese yen against the U.S. dollar and an approximately 5% decrease in the number of units sold compared to the year ended March 31, 2011. On a consolidated basis, the 11% decrease in sales at Nidec Corporation and its direct-line subsidiaries was offset to a large extent by an increase in sales of products at the Nidec Sankyo group.

Net sales of our other small precision brushless DC motors accounted for 10.4% of total net sales for the year ended March 31, 2011 and 10.2% of total net sales for the year ended March 31, 2012.

Brushless DC fans

Net sales of brushless DC fans decreased ¥3,474 million, or 10.3%, from ¥33,801 million for the year ended March 31, 2011 to ¥30,327 million for the year ended March 31, 2012. With respect to Nidec Corporation and its direct-line subsidiaries, sales of brushless DC fans for the year ended March 31, 2012 decreased approximately 9% compared to the year ended March 31, 2011. The main reasons for the 9% decrease in sales were an approximately 8% appreciation of the Japanese yen against the U.S. dollar and an approximately 3% decrease in the number of units sold, despite an increase in average unit price of approximately 2% on a U.S. dollar basis.

Net sales of brushless DC fans accounted for 5.0% of total net sales for the year ended March 31, 2011 and 4.4% of total net sales for the year ended March 31, 2012.

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Other small precision motors

Net sales of other small precision motors increased ¥9,291 million, or 49.2%, from ¥18,883 million for the year ended March 31, 2011 to ¥28,174 million for the year ended March 31, 2012. This increase was primarily due to the contribution of Nidec Seimitsu, which we acquired in July 2011. Excluding the impact of Nidec Seimitsu, net sales of other small precision motors decreased ¥2,727 million, or 14.4%, from ¥18,883 million for the year ended March 31, 2011 to ¥16,156 million for the year ended March 31, 2012.

Net sales of other small precision motors accounted for 2.8% of total net sales for the year ended March 31, 2011 and 4.2% of total net sales for the year ended March 31, 2012.

(General motors)

Net sales of our general motors increased ¥40,963 million, or 29.8%, from ¥137,251 million for the year ended March 31, 2011 to ¥178,214 million for the year ended March 31, 2012. This increase was primarily due to the contribution of Nidec Motor to net sales of general motors for home appliances and industrial use, partially offset by a ¥2,999 million, or 7.0%, decrease in sales of the Nidec Techno Motor group. Excluding the impact of Nidec Motor, net sales of general motors increased ¥7,611 million, or 7.5%, from ¥101,793 million for the year ended March 31, 2011 to ¥109,404 million for the year ended March 31, 2012. This increase was primarily due to an increase in sales of general motors for automobiles. Excluding the impact of Nidec Motor, sales of general motors for home appliances and industrial use for the year ended March 31, 2012 decreased ¥3,393 million, or 5.8%, compared to the year ended March 31, 2011. Sales of general motors for automobiles for the year ended March 31, 2012 increased ¥11,004 million, or 25.6%, compared to the year ended March 31, 2011, mainly due to an approximately 68% increase in sales of general motors for electric power steering by Nidec Corporation and its direct-line subsidiaries.

Net sales of our general motors accounted for 20.3% of our total net sales for the year ended March 31, 2011 and 26.1% of total net sales for the year ended March 31, 2012.

(Machinery)

Net sales of our machinery decreased ¥12,425 million, or 16.1%, from ¥77,329 million for the year ended March 31, 2011 to ¥64,904 million for the year ended March 31, 2012. The decrease in net sales for the year ended March 31, 2012 was mainly due to a decrease in sales of products such as LCD panel handling robots at the Nidec Sankyo group of ¥7,635 million, or 22.9%, a decrease in sales of products such as electronic circuit testing systems for digital equipment at the Nidec-Read group of ¥3,055 million, or 23.8%, a decrease in sales at the Nidec-Kyori group of ¥1,462 million, or 17.3%, and a decrease in sales at the Nidec Tosok group of ¥505 million or 14.0%, compared to the year ended March 31, 2011. The decrease in net sales of machinery was partially offset by a ¥857 million, or 17.2%, increase in sales of products such as peripheral equipment for chip mounters at the Nidec Copal group.

Net sales of our machinery accounted for 11.4% of our total net sales for the year ended March 31, 2011 and 9.5% of total net sales for the year ended March 31, 2012.

(Electronic and optical components)

Net sales of our electronic and optical components decreased ¥12,113 million, or 11.2%, from ¥107,693 million for the year ended March 31, 2011 to ¥95,580 million for the year ended March 31, 2012. The decrease in net sales for the year ended March 31, 2012 was mainly due to a decrease in sales of products

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such as shutters and unit components at the Nidec Copal group of ¥7,617 million, or 15.4%, primarily as a result of the disruptions to our manufacturing facilities and customer supply chains caused by the flooding in Thailand, a decrease in sales of products such as control device units for home appliances at the Nidec Sankyo group of ¥3,579 million, or 12.4%, mainly because of the disruptions to the customer supply chains caused by the flooding in Thailand, and a decrease in sales of electronic components, including circuit components and sensors, at the Nidec Copal Electronics group of ¥917 million, or 3.1%, compared to the year ended March 31, 2011.

Net sales of our electronic and optical components accounted for 15.9% of our total net sales for the year ended March 31, 2011 and 14.0% of our total net sales for the year ended March 31, 2012.

(Others)

Net sales of our other products increased ¥3,819 million, or 11.0%, from ¥34,617 million for the year ended March 31, 2011 to ¥38,436 million for the year ended March 31, 2012. This increase in net sales for the year ended March 31, 2012 was primarily due to an increase in sales of automotive parts at the Nidec Tosok group of ¥4,154 million, or 15.9%, compared to the year ended March 31, 2011, resulting from the recovering demand for such parts in China and Europe. The increase in net sales of our other products for the year ended March 31, 2012 was partially offset by a decrease in sales of pivot assemblies for hard disk drives of ¥1,085 million, or 65.4%, for the year ended March 31, 2012 compared to the year ended March 31, 2011.

Net sales of our other products accounted for 5.2% of our total net sales for the year ended March 31, 2011 and 5.7% of total net sales for the year ended March 31, 2012.

Cost of Products Sold

Our cost of products sold increased ¥23,695 million, or 4.7%, from ¥500,034 million for the year ended March 31, 2011 to ¥523,729 million for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, our cost of products sold decreased ¥14,367 million, or 3.1% from ¥469,166 million for the year ended March 31, 2011 to ¥454,799 million for the year ended March 31, 2012. This decrease was mainly due to the overall decrease in sales, which was partially offset by higher raw material costs and labor costs.

As a percentage of net sales, our cost of products sold increased from 74.0% for the year ended March 31, 2011 to 76.8% for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, as a percentage of net sales, cost of products sold increased from 73.2% for the year ended March 31, 2011 to 75.6 % for the year ended March 31, 2012. This increase in the percentages excluding the impact of the newly consolidated subsidiaries was mainly due to a rise in raw material costs, higher labor costs, an increase in units of products sold with lower margins in proportion to the total units of products sold, a decrease in unit prices, and higher fixed costs per unit resulting from lower demand for some products.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses increased ¥123 million, or 0.2%, from ¥55,348 million for the year ended March 31, 2011 to ¥55,471 million for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, our selling, general and administrative expenses decreased ¥3,413 million, or 6.6%, from ¥52,009 million for the year ended March 31, 2011 to ¥48,596 million for the year ended March 31, 2012. This decrease was mainly due to the impact of insurance recoveries in excess of the loss recognized for the water damage to property, plant and equipment, and inventories caused by the flooding in Thailand described above.

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The flooding in Thailand caused water damage to buildings, machinery, and other property, plant and equipment as well as inventories at some of our group companies. For the year ended March 31, 2012, we recognized a loss of ¥19,359 million, which comprised ¥13,730 million of losses relating to property, plant and equipment, and ¥3,539 million of losses relating to inventory associated with water damage, as well as ¥2,090 million of other related costs.

We have insurance policies which cover certain damage directly caused by the flooding. The insurance policies cover the damage associated with buildings, machinery, and other property, plant and equipment as well as inventories. Taking into account the insurance recoveries, we recorded a net gain of ¥3,842 million in operating income for the year ended March 31, 2012, as we recognized insurance recoveries that exceeded the loss.

As a percentage of net sales, selling, general and administrative expenses decreased from 8.2% for the year ended March 31, 2011 to 8.1% for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu as well as the insurance recoveries, as a percentage of net sales, our selling, general and administrative expenses for each of the years ended March 31, 2011 and 2012 were 8.1% and 8.7%, respectively.

Research and Development Expenses

Our research and development expenses increased ¥2,313 million, or 8.3%, from ¥27,737 million for the year ended March 31, 2011 to ¥30,050 million for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, our research and development expenses increased ¥1,176 million, or 4.4%, from ¥26,629 million for the year ended March 31, 2011 to ¥27,805 million for the year ended March 31, 2012. This increase was mainly due to our increased investments in research and development activities relating to products in the “general motors” product category.

For further information on our research and development expenses, including a discussion on an operating segment basis, see “—C. Research and Development, Patents and Licenses, etc.”

As a percentage of net sales, research and development expenses increased from 4.1% for the year ended March 31, 2011 to 4.4% for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, as a percentage of net sales, our research and development expenses increased from 4.2% for the year ended March 31, 2011 to 4.6% for the year ended March 31, 2012.

Operating Income

As a result of the foregoing, our operating income decreased ¥19,799 million, or 21.3%, from ¥92,869 million for the year ended March 31, 2011 to ¥73,070 million for the year ended March 31, 2012.

As a percentage of net sales, operating income decreased from 13.7% for the year ended March 31, 2011 to 10.7% for the year ended March 31, 2012.

Other Income (Expense)

Our other expenses decreased ¥8,689 million, or 79.7%, from ¥10,903 million for the year ended March 31, 2011 to ¥2,214 million for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, our other expenses decreased ¥8,653 million, or 79.6%, from ¥10,873 million for the year ended March 31, 2011 to ¥2,220 million for the year ended March 31, 2012. This decrease was mainly due to a decrease in foreign exchange loss.

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Our foreign exchange loss decreased ¥7,352 million, or 80.7%, from ¥9,108 million for the year ended March 31, 2011 to ¥1,756 million for the year ended March 31, 2012. Excluding the impact of Nidec Motor and Nidec Seimitsu, our foreign exchange loss decreased ¥7,303 million, or 80.5%, from ¥9,073 million for the year ended March 31, 2011 to ¥1,770 million for the year ended March 31, 2012. This decrease was mainly due to a decrease in net foreign currency denominated financial assets and a decrease in fluctuations in the exchange rate between the U.S. dollar and the Japanese yen for the year ended March 31, 2012 compared to the year ended March 31, 2011.

The Japanese yen to the U.S. dollar exchange rates were ¥93.04 to the U.S. dollar as of March 31, 2010 and ¥83.15 to the U.S. dollar as of March 31, 2011. The Japanese yen appreciated against the U.S. dollar to ¥82.19 to the U.S. dollar as of March 31, 2012.

Income from Continuing Operations before Income Taxes

As a result of the foregoing, our income from continuing operations before income taxes decreased ¥11,110 million, or 13.6%, from ¥81,966 million for the year ended March 31, 2011 to ¥70,856 million for the year ended March 31, 2012.

As a percentage of net sales, our income from continuing operations before income taxes decreased from 12.1% for the year ended March 31, 2011 to 10.4% for the year ended March 31, 2012.

Income Taxes

Our income taxes increased ¥492 million, or 2.7%, from ¥18,309 million for the year ended March 31, 2011 to ¥18,801 million for the year ended March 31, 2012. This was primarily due to the increase in the effective income tax rate, which was partially offset by the decrease in income from continuing operations before income taxes.

The effective income tax rate increased 4.2 percentage points from 22.3% for the year ended March 31, 2011 to 26.5% for the year ended March 31, 2012. The increase primarily reflected the net impact of a reduction in tax benefit in foreign subsidiaries, an increase in tax on undistributed earnings, an increase in valuation allowance and a decrease in liabilities for unrecognized tax benefits.

Tax benefit in foreign subsidiaries primarily arose from our operations in Thailand, the Philippines and China. The reduction in tax benefit in foreign subsidiaries was mainly due to decreases in profit of our subsidiaries in Thailand as a result of the flooding and the application to transactions between Nidec Corporation and Nidec Electronics (Thailand) Co., Ltd. of a transfer pricing method that was provisionally agreed to in a bilateral advance pricing arrangement between the tax authorities. The decrease in liabilities for unrecognized tax benefits resulted from the transfer pricing adjustments.

On November 30, 2011, the Japanese National Diet approved various changes to the calculation of the statutory local income tax for companies, effective April 1, 2012. As a result, the normal statutory corporate income tax rate in Japan was reduced from approximately 41.0% to approximately 38.0% from April 1, 2012, and further to approximately 36.0% from April 1, 2015. The statutory tax rate used for calculating deferred tax assets and deferred tax liabilities, where temporary differences would be realized after April 1, 2012, was accordingly reduced from approximately 41.0% to approximately 38.0% or approximately 36.0%, as applicable.

For more information, see Note 16 to our audited consolidated financial statements included elsewhere in this annual report.

Equity in Net (Loss) Income of Affiliated Companies

We had equity in net income of affiliated companies of ¥6 million for the year ended March 31, 2011 and ¥0 million for the year ended March 31, 2012.

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Income from Continuing Operations

As a result of the foregoing, our income from continuing operations decreased ¥11,608 million, or 18.2%, from ¥63,663 million for the year ended March 31, 2011 to ¥52,055 million for the year ended March 31, 2012.

Loss on Discontinued Operations

Our loss on discontinued operations increased ¥1,597 million, or 25.9%, from ¥6,171 million for the year ended March 31, 2011 to ¥7,768 million for the year ended March 31, 2012.

We discontinued the specialty lens unit business of the Nidec Copal group as of March 31, 2011. In addition, as of March 31, 2012, we also discontinued the lens actuator business, the tape drive and disk drive mechanism businesses of the Nidec Sankyo group and the compact digital camera lens unit business of the Nidec Copal group.

For more information, see Note 24 to our audited consolidated financial statements included elsewhere in this annual report.

Consolidated Net Income

As a result of the foregoing, our consolidated net income decreased ¥13,205 million, or 23.0%, from ¥57,492 million for the year ended March 31, 2011 to ¥44,287 million for the year ended March 31, 2012.

Net Income Attributable to Noncontrolling Interests

Our net income attributable to noncontrolling interests decreased ¥1,603 million, or 31.1%, from ¥5,159 million for the year ended March 31, 2011 to ¥3,556 million for the year ended March 31, 2012. This decrease was primarily due to decreases in net income of group companies of which we own less than 100%, including Nidec Sankyo Corporation and Nidec Copal Corporation and their respective subsidiaries, and due to Nidec Corporation increasing its interest in Nidec Servo Corporation from 64% to 100% on October 1, 2010.

Net Income Attributable to Nidec Corporation

As a result of the foregoing, our net income attributable to Nidec Corporation decreased ¥11,602 million, or 22.2%, from ¥52,333 million for the year ended March 31, 2011 to ¥40,731 million for the year ended March 31, 2012.

As a percentage of net sales, our net income attributable to Nidec Corporation decreased from 7.7% for the year ended March 31, 2011 to 6.0% for the year ended March 31, 2012.

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Results of Operations—Year Ended March 31, 2011 Compared to Year Ended March 31, 2010

Net Sales

The following table is a summary of our net sales for the years ended March 31, 2010 and 2011 by product category. For a detailed discussion of our product categories, see “Item 4.B. Information on the Company—Business Overview.”

	(Yen in millions)
	2010		2011		Inc/Dec			%
Net sales:
Small precision motors:
Hard disk drives spindle motors	¥	203,845	¥	196,265	¥	(7,580	)		(3.7	)%
Other small precision brushless DC motors		72,362		70,149		(2,213	)		(3.1	)%
Brushless DC fans		32,651		33,801		1,150			3.5	%
Other small precision motors		18,023		18,883		860			4.8	%
Sub-total		326,881		319,098		(7,783	)		(2.4	)%
General motors		73,381		137,251		63,870			87.0	%
Machinery		47,966		77,329		29,363			61.2	%
Electronic and optical components		94,545		107,693		13,148			13.9	%
Others		28,779		34,617		5,838			20.3	%
Consolidated total	¥	571,552	¥	675,988	¥	104,436			18.3	%

Our net sales increased ¥104,436 million, or 18.3%, from ¥571,552 million for the year ended March 31, 2010 to ¥675,988 million for the year ended March 31, 2011. This increase was primarily due to the contributions of newly consolidated subsidiaries. Such subsidiaries include Nidec Motor Corporation, the former Emerson Electric Co.’s motors and controls business acquired in September 2010, whose sales were ¥35,458 million for the six months ended March 31, 2011. Such subsidiaries also include Nidec Sole Motor Corporation S.R.L. acquired in January 2010, whose sales were ¥15,429 million for the year ended March 31, 2011 and ¥3,032 million for the three months ended March 31, 2010.

Excluding the impact of the newly consolidated subsidiaries, our net sales increased ¥56,581 million, or 10.0% for the year ended March 31, 2011 compared to the year ended March 31, 2010. This increase was mainly due to increases in sales of our “machinery”, “general motors” and “electronic and optical components” product categories, which was offset in part by a decrease in sales of products in the “small precision motors” category. This decrease in sales of small precision motors was primarily due to the appreciation of the Japanese yen against the U.S. dollar.

The strong Japanese yen particularly against the U.S. dollar had, and was expected to continue to have, an adverse impact on our results of operations and financial condition, particularly net sales and shareholders’ equity, as unit prices of many of our products are denominated in U.S. dollars and we have expanded, and continue to seek opportunities to expand, our overseas operations. For example, on September 30, 2010, we acquired Emerson Electric Co.’s motors and controls business, as described below. Appreciation of the Japanese yen against other currencies will also affect our foreign currency translation adjustments, which will in turn negatively affect our shareholders’ equity.

(Small precision motors)

Net sales of small precision motors decreased ¥7,783 million, or 2.4%, from ¥326,881 million for the year ended March 31, 2010 to ¥319,098 million for the year ended March 31, 2011. Net sales of each product category included in “small precision motors” are as discussed below.

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Hard disk drives spindle motors

Net sales of hard disk drives spindle motors decreased ¥7,580 million, or 3.7%, from ¥203,845 million for the year ended March 31, 2010 to ¥196,265 million for the year ended March 31, 2011. This decrease was mainly due to an approximately 8% decrease in average unit price of hard disk drives spindle motors on a Japanese yen basis, which was partially offset by an approximately 5% increase in units sold of hard disk drives spindle motors for the year ended March 31, 2011. On a U.S. dollar basis, our average unit price of hard disk drives spindle motors decreased by approximately 1% for the year ended March 31, 2011.

Although units sold of spindle motors for 2.5-inch hard disk drives for the year ended March 31, 2011 increased approximately 14% compared to the year ended March 31, 2010, units sold of spindle motors for 3.5-inch hard disk drives for the year ended March 31, 2011 decreased approximately 2% compared to the year ended March 31, 2010. Although sales of spindle motors for 2.5-inch hard disk drives for the year ended March 31, 2011 increased approximately 1%, sales of spindle motors for 3.5-inch hard disk drives decreased approximately 7% compared to the year ended March 31, 2010.

Net sales of hard disk drives spindle motors accounted for 35.7% of total net sales for the year ended March 31, 2010 and 29.0% of total net sales for the year ended March 31, 2011.

Other small precision brushless DC motors

Net sales of our other small precision brushless DC motors decreased ¥2,213 million, or 3.1%, from ¥72,362 million for the year ended March 31, 2010 to ¥70,149 million for the year ended March 31, 2011. This decrease was mainly due to an approximately 19% decrease in average unit price of small precision brushless DC motors for optical disk drives on a Japanese yen basis, which was partially offset by an approximately 2% increase in units sold of small precision brushless DC motors for optical disk drives, compared to the year ended March 31, 2010.

Net sales of our other small precision brushless DC motors accounted for 12.7% of total net sales for the year ended March 31, 2010 and 10.4% of total net sales for the year ended March 31, 2011.

Brushless DC fans

Net sales of brushless DC fans increased ¥1,150 million, or 3.5%, from ¥32,651 million for the year ended March 31, 2010 to ¥33,801 million for the year ended March 31, 2011. This increase was mainly due to an approximately 11% increase in units sold of brushless DC fans, which was partially offset by an approximately 8% decrease in average unit price of brushless DC fans on a Japanese yen basis for the year ended March 31, 2011 compared to the year ended March 31, 2010.

Net sales of brushless DC fans accounted for 5.7% of total net sales for the year ended March 31, 2010 and 5.0% of total net sales for the year ended March 31, 2011.

Other small precision motors

Net sales of other small precision motors increased ¥860 million, or 4.8%, from ¥18,023 million for the year ended March 31, 2010 to ¥18,883 million for the year ended March 31, 2011.

Net sales of other small precision motors accounted for 3.1% of total net sales for the year ended March 31, 2010 and 2.8% of total net sales for the year ended March 31, 2011.

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(General motors)

From the second quarter of the year ended March 31, 2011, this product category has been renamed from “mid-size motors” to “general motors,” due to the addition of “large-size motors for industrial use” to this category following our acquisition of Emerson Electric Co.’s motors and controls business on September 30, 2010. The “general motors” product category currently consists of general motors for home appliances, general motors for industrial use, and general motors for automobiles.

Net sales of our general motors increased ¥63,870 million, or 87.0%, from ¥73,381 million for the year ended March 31, 2010 to ¥137,251 million for the year ended March 31, 2011. This increase was mainly due to the contributions of the newly consolidated subsidiaries. Such subsidiaries include Nidec Motor Corporation, the former Emerson Electric Co.’s motors and controls business acquired in September 2010, whose sales were ¥35,458 million for the six months ended March 31, 2011. Such subsidiaries also include Nidec Sole Motor Corporation S.R.L. acquired in January 2010, whose sales were ¥15,429 million for the year ended March 31, 2011 and ¥3,032 million for the three months ended March 31, 2010. Excluding the impact of the newly consolidated subsidiaries, sales of general motors for home appliances and industrial use and sales of general motors for automobiles for the year ended March 31, 2011 increased ¥8,035 million and ¥7,981 million, or 23% and 23%, respectively, compared to the year ended March 31, 2010. Within the “general motors for automobiles” product category, sales of general motors for electric power steering and sales at Nidec Motors & Actuators, respectively, increased for the year ended March 31, 2011 compared to the year ended March 31, 2010.

Net sales of our general motors accounted for 12.8% of our total net sales for the year ended March 31, 2010 and 20.3% of total net sales for the year ended March 31, 2011.

(Machinery)

Net sales of our machinery increased ¥29,363 million, or 61.2%, from ¥47,966 million for the year ended March 31, 2010 to ¥77,329 million for the year ended March 31, 2011. The increase in net sales of machinery for the year ended March 31, 2011 was mainly due to an increase in sales of LCD panel handling robots and card readers at the Nidec Sankyo group of ¥11,658 million, or 54%, compared to the year ended March 31, 2010. The increase in net sales of machinery for the year ended March 31, 2011 was also due in part to an increase in sales of electronic circuit testing systems at the Nidec-Read group of ¥5,830 million, or 83%, mainly reflecting increasing demand for digital equipment, such as smartphones, an increase in sales of machinery at the Nidec-Shimpo group of ¥4,501 million, or 51%, mainly reflecting increasing demand in developing countries, and an increase in sales of press machines for electronic components at Nidec-Kyori group of ¥4,136 million, or 96%, compared to the year ended March 31, 2010. Sales of peripheral equipment for chip mounters at the Nidec Copal group and sales of measuring and inspection machines for air conditioning compressors at the Nidec Tosok group for the year ended March 31, 2011 increased ¥1,683 million and ¥1,138 million, or 51% and 46%, respectively, compared to the year ended March 31, 2010.

Net sales of our machinery accounted for 8.4% of our total net sales for the year ended March 31, 2010 and 11.4% of total net sales for the year ended March 31, 2011.

(Electronic and optical components)

Net sales of our electronic and optical components increased ¥13,148 million, or 13.9%, from ¥94,545 million for the year ended March 31, 2010 to ¥107,693 million for the year ended March 31, 2011. This increase in net sales for the year ended March 31, 2011 was mainly due to an increase in sales of electronic components, including circuit components and sensors, at the Nidec Copal Electronics group of ¥5,506 million, or 23%, and an increase in sales of products such as shutters and lens units for digital cameras and mobile

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phones at the Nidec Copal group of ¥4,726 million, or 11%, compared to the year ended March 31, 2010. Sales of control device units at the Nidec Sankyo group and sales of plastic-mold products at the Nidec Nissin also increased for the year ended March 31, 2011 compared to the year ended March 31, 2010.

Net sales of our electronic and optical components accounted for 16.5% of our total net sales for the year ended March 31, 2010 and 15.9% of our total net sales for the year ended March 31, 2011.

(Others)

Net sales of our other products increased ¥5,838 million, or 20.3%, from ¥28,779 million for the year ended March 31, 2010 to ¥34,617 million for the year ended March 31, 2011. This increase in net sales for the year ended March 31, 2011 was primarily due to an increase in sales of automotive parts at the Nidec Tosok group of ¥5,197 million, or 25%, compared to the year ended March 31, 2010. Sales from the logistics and services related businesses also increased for the year ended March 31, 2011 compared to the year ended March 31, 2010. Sales of pivot assemblies for hard disk drives for the year ended March 31, 2011, however, decreased ¥1,002 million, or 38%, compared to the year ended March 31, 2010.

Net sales of our other products accounted for 5.1% of our total net sales for the year ended March 31, 2010 and 5.2% of total net sales for the year ended March 31, 2011.

Cost of Products Sold

Our cost of products sold increased ¥78,844 million, or 18.7%, from ¥421,190 million for the year ended March 31, 2010 to ¥500,034 million for the year ended March 31, 2011. Excluding the impact of the newly consolidated subsidiaries, our cost of products sold increased ¥36,591 million from ¥418,511 million for the year ended March 31, 2010 to ¥455,102 million for the year ended March 31, 2011. This increase mainly corresponded to the overall increase in sales.

As a percentage of net sales, cost of products sold increased from 73.7% for the year ended March 31, 2010 to 74.0% for the year ended March 31, 2011. Excluding the impact of the recently consolidated subsidiaries, as a percentage of net sales, cost of products sold decreased from 73.6% for the year ended March 31, 2010 to 72.9% for the year ended March 31, 2011. This decrease was primarily due to cost reductions achieved through our streamlining of manufacturing processes, increased in-sourcing of product manufacturing, enhanced economies of scale, and an increase in unit volumes of products with higher margins.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses increased ¥8,539 million, or 18.2%, from ¥46,809 million for the year ended March 31, 2010 to ¥55,348 million for the year ended March 31, 2011. Excluding the impact of the newly consolidated subsidiaries, our selling, general and administrative expenses increased ¥4,383 million from ¥46,533 million for the year ended March 31, 2010 to ¥50,916 million for the year ended March 31, 2011. This increase was mainly due to increases in personnel expenses.

As a percentage of net sales, selling, general and administrative expenses for each of the years ended March 31, 2010 and 2011 were 8.2%.

Research and Development Expenses

Our research and development expenses increased ¥3,466 million, or 14.3%, from ¥24,271 million for the year ended March 31, 2010 to ¥27,737 million for the year ended March 31, 2011. Excluding the impact of the newly consolidated subsidiaries, our research and development expenses increased ¥2,102

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million from ¥24,207 million for the year ended March 31, 2010 to ¥26,309 million for the year ended March 31, 2011. This increase was due mainly to our increased investments in research and development activities relating to the “small precision motors” and “general motors for automobiles” product categories.

As a percentage of net sales, research and development expenses decreased from 4.2% for the year ended March 31, 2010 to 4.1% for the year ended March 31, 2011.

Operating Income

As a result of the foregoing factors, our operating income increased ¥13,587 million, or 17.1%, from ¥79,282 million for the year ended March 31, 2010 to ¥92,869 million for the year ended March 31, 2011.

As a percentage of net sales, operating income decreased from 13.9% for the year ended March 31, 2010 to 13.7% for the year ended March 31, 2011.

Other Income (Expense)

Our other expenses increased ¥7,592 million, or 229.3%, from ¥3,311 million for the year ended March 31, 2010 to ¥10,903 million for the year ended March 31, 2011. Excluding the impact of the newly consolidated subsidiaries, our other expenses increased ¥7,623 million from ¥3,262 million for the year ended March 31, 2010 to ¥10,885 million for the year ended March 31, 2011.

Our foreign exchange loss increased ¥6,147 million, or 207.6%, from ¥2,961 million for the year ended March 31, 2010 to ¥9,108 million for the year ended March 31, 2011. This increase was principally due to the appreciation in the value of the Japanese yen against relevant foreign currencies compared to the previous year. The exchange rate of the Japanese yen against the U.S. dollar as of March 31, 2009, 2010 and 2011 was ¥98.23, ¥93.04 and ¥83.15, respectively. Foreign exchange fluctuations can have a significant impact on our results of operations and financial condition, as we have a substantial amount of U.S. dollar-based purchases of inventory and sales of products.

Income from Continuing Operations before Income Taxes

As a result of the foregoing, our income from continuing operations before income taxes increased ¥5,995 million, or 7.9%, from ¥75,971 million for the year ended March 31, 2010 to ¥81,966 million for the year ended March 31, 2011.

As a percentage of net sales, our income from continuing operations before income taxes decreased from 13.3% for the year ended March 31, 2010 to 12.1% for the year ended March 31, 2011.

Income Taxes

Our income taxes increased ¥741 million, or 4.2%, from ¥17,568 million for the year ended March 31, 2010 to ¥18,309 million for the year ended March 31, 2011. This was primarily due to the increase in income from continuing operations before income taxes, which was partially offset by the decrease in the effective income tax rate.

The effective income tax rate decreased 0.8 percentage points from 23.1% for the year ended March 31, 2010 to 22.3% for the year ended March 31, 2011. The main reasons for the decrease were the net impact of a decrease in tax (benefit) on undistributed earnings and an increase in liabilities for unrecognized tax benefits.

For a detailed discussion of our income taxes, see Note 16 to our audited consolidated financial statements included elsewhere in this annual report.

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Equity in Net Income (Loss) of Affiliated Companies

We had equity in net income of affiliated companies in the amount of ¥6 million for the year ended March 31, 2011, compared to equity in net loss of affiliated companies in the amount of ¥45 million for the year ended March 31, 2010.

Income from Continuing Operations

As a result of the foregoing, our income from continuing operations increased ¥5,305 million, or 9.1%, from ¥58,358 million for the year ended March 31, 2010 to ¥63,663 million for the year ended March 31, 2011.

As a percentage of net sales, our income from continuing operations decreased from 10.2% for the year ended March 31, 2010 to 9.4% for the year ended March 31, 2011.

Loss on Discontinued Operations

Our loss on discontinued operations increased ¥3,964 million, or 179.6%, from ¥2,207 million for the year ended March 31, 2010 to ¥6,171 million for the year ended March 31, 2011.

We discontinued the semiconductor manufacturing equipment business of the Nidec Tosok group as of September 30, 2009 and the specialty lens unit business of the Nidec Copal group as of March 31, 2011.

For a detailed discussion of our loss on discontinued operations, see Note 24 to our audited consolidated financial statements included elsewhere in this annual report.

Consolidated Net Income

As a result of the foregoing, our consolidated net income increased ¥1,341 million, or 2.4%, from ¥56,151 million for the year ended March 31, 2010 to ¥57,492 million for the year ended March 31, 2011.

Net Income Attributable to Noncontrolling Interests

Our net income attributable to noncontrolling interests increased ¥969 million, or 23.1%, from ¥4,190 million for the year ended March 31, 2010 to ¥5,159 million for the year ended March 31, 2011. This increase was primarily due to increases in net income of some of our group companies that had noncontrolling interests, including the Nidec Sankyo group, the Nidec Tosok group and the Nidec Copal Electronics group, despite a decrease in net income of the Nidec Copal group.

Net Income Attributable to Nidec Corporation

As a result of the foregoing, our net income attributable to Nidec Corporation increased ¥372 million, or 0.7%, from ¥51,961 million for the year ended March 31, 2010 to ¥52,333 million for the year ended March 31, 2011.

As a percentage of net sales, our net income attributable to Nidec Corporation decreased from 9.1% for the year ended March 31, 2010 to 7.7% for the year ended March 31, 2011.

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Segment Information

Based on the applicable criteria set forth in ASC 280, “Segment Reporting”, we have 14 reportable operating segments on which we report in our consolidated financial statements. For the information required by ASC280, see Note 25 to our audited consolidated financial statements included elsewhere in this annual report.

We changed segment reporting to align it with the changes in our management decision-making process for the year ended March 31, 2012. Since September 2011, Nidec Component Technology Group previously included in the All Others segment has been included in the Nidec Electronics (Thailand) segment as we aim to enhance their hard disk drive motors businesses mainly in Thailand. Additionally the Nidec Sole Motor group is no longer included in the Nidec Techno Motor segment but has been included in the Nidec Motor segment since April 2011. All prior period segment information has been reclassified in accordance with the current period presentation to enable comparisons between the relevant amounts for the years ended March 31, 2010, 2011 and 2012.

We acquired Emerson Electric Co.’s motors and controls business on September 30, 2010. The acquired business has been identified as a reportable operating segment, the Nidec Motor segment, since the quarterly reporting period ended December 31, 2010.

The Nidec Corporation segment comprises Nidec Corporation in Japan, which primarily produces and sells hard disk drives spindle motors, DC motors, fans, and general motors for automobiles.

The Nidec Electronics (Thailand) segment comprises Nidec Electronics (Thailand) Co., Ltd., a subsidiary in Thailand, and its consolidated subsidiaries, which primarily produce and sell hard disk drive motors. This segment also includes other subsidiaries in Asia which produce components for hard disk drives.

The Nidec (Zhejiang) segment comprises Nidec (Zhejiang) Corporation, a subsidiary in China, which primarily produces and sells hard disk drive motors.

The Nidec (Dalian) segment comprises Nidec (Dalian) Limited, a subsidiary in China, which primarily produces and sells DC motors and fans but excludes its general motors business for automobiles.

The Nidec Singapore segment comprises Nidec Singapore Pte. Ltd., a subsidiary in Singapore, and its consolidated subsidiary, which primarily sell hard disk drive motors, DC motors, fans, and pivot assemblies.

The Nidec (H.K.) segment comprises Nidec (H.K.) Co., Ltd., a subsidiary in Hong Kong, and its consolidated subsidiaries, which primarily sell hard disk drive motors, DC motors and fans.

The Nidec Philippines segment comprises Nidec Philippines Corporation, a subsidiary in the Philippines, and its consolidated subsidiary, which primarily produce and sell hard disk drive motors.

The Nidec Sankyo segment comprises Nidec Sankyo Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell DC motors, machinery, and electronic parts.

The Nidec Copal segment comprises Nidec Copal Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell optical and electronic parts and machinery.

The Nidec Tosok segment comprises Nidec Tosok Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell automotive parts and machinery.

The Nidec Copal Electronics segment comprises Nidec Copal Electronics Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell electronic parts.

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The Nidec Techno Motor segment comprises Nidec Techno Motor Corporation (renamed from Nidec Techno Motor Holdings Corporation on April 1, 2012), a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell general motors for home appliances and industrial use.

The Nidec Motor segment comprises Nidec Motor Holdings Corporation, a subsidiary in Japan, and other subsidiaries in North America, Latin America, Asia and Europe, which primarily produce and sell general motors for home appliances and industrial use.

The Nidec Motors & Actuators segment comprises Nidec Motors & Actuators in France, other subsidiaries in Europe and North America, and other manufacturing subsidiaries in China, which primarily produce and sell general motors for automobiles.

The All Others segment comprises subsidiaries that are operating segments but not designated as reportable segments due to their immateriality.

In accordance with ASC 205-20, “Presentation of Financial Statements—Discontinued Operations”, amounts in the segment information do not reflect discontinued operations, and previous years’ segment information has been reclassified.

We evaluate performance based on segmental profit and loss, which consists of sales and operating revenues less operating expenses. All segmental operating income or loss is accounted for under Japanese GAAP, except for Nidec Electronics (Thailand), Nidec (Zhejiang), Nidec (Dalian), Nidec Singapore, Nidec (H.K), Nidec Philippines, Nidec Motor and Nidec Motors & Actuators. Therefore, our segmental data has not been prepared under U.S. GAAP on a basis that is consistent with our consolidated financial statements or on any other single basis that is consistent between segments. There are several differences between U.S. GAAP and the underlying accounting bases used by management. The principal differences that affect segmental operating income or loss include accounting for pension and severance costs, and leases. Our segmental operating income or loss is presented in accordance with financial reporting principles and practices generally accepted in Japan. Management believes that monthly segmental information is available on a timely basis, and that it is sufficiently accurate at the segment income or loss level for management’s purposes.

The first of the following two tables shows net sales to external customers and other operating segments by reportable operating segment for the years ended March 31, 2010, 2011 and 2012. The second table shows operating income or loss by reportable operating segment, which includes inter-segment sales and operating revenues and expenses, for the years ended March 31, 2010, 2011 and 2012:

	Year ended March 31,
	2010		2011		2012
	(Yen in millions)
Nidec Corporation
Net sales to external customers	¥	67,285	¥	72,334	¥	46,901
Net sales to other operating segments		77,125		74,406		100,064
Sub total		144,410		146,740		146,965
Nidec Electronics (Thailand)
Net sales to external customers		90,907		86,086		64,226
Net sales to other operating segments		43,695		45,219		36,649
Sub total		134,602		131,305		100,875
Nidec (Zhejiang)
Net sales to external customers		22,948		24,500		26,430
Net sales to other operating segments		6,028		6,618		3,617
Sub total		28,976		31,118		30,047

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	Year ended March 31,
	2010		2011		2012
	(Yen in millions)
Nidec (Dalian)
Net sales to external customers		6,976		4,218		4,269
Net sales to other operating segments		24,274		20,852		15,471
Sub total		31,250		25,070		19,740
Nidec Singapore
Net sales to external customers		26,157		19,082		34,220
Net sales to other operating segments		390		451		448
Sub total		26,547		19,533		34,668
Nidec (H.K.)
Net sales to external customers		51,390		55,724		50,748
Net sales to other operating segments		4,142		1,587		1,162
Sub total		55,532		57,311		51,910
Nidec Philippines
Net sales to external customers		10,891		7,337		15,326
Net sales to other operating segments		28,019		28,504		24,390
Sub total		38,910		35,841		39,716
Nidec Sankyo
Net sales to external customers		68,924		86,027		78,589
Net sales to other operating segments		395		556		396
Sub total		69,319		86,583		78,985
Nidec Copal
Net sales to external customers		53,681		58,396		51,124
Net sales to other operating segments		2,357		2,632		2,318
Sub total		56,038		61,028		53,442
Nidec Tosok
Net sales to external customers		23,345		29,745		33,358
Net sales to other operating segments		156		201		150
Sub total		23,501		29,946		33,508
Nidec Copal Electronics
Net sales to external customers		24,954		30,553		29,098
Net sales to other operating segments		31		27		20
Sub total		24,985		30,580		29,118
Nidec Techno Motor
Net sales to external customers		35,029		42,935		40,058
Net sales to other operating segments		818		889		952
Sub total		35,847		43,824		41,010
Nidec Motor
Net sales to external customers		3,032		50,886		83,999
Net sales to other operating segments		—		—		30
Sub total		3,032		50,886		84,029
Nidec Motor & Actuators
Net sales to external customers		32,186		38,371		44,748
Net sales to other operating segments		9,432		6,702		11,607
Sub total		41,618		45,073		56,355
All Others
Net sales to external customers		54,768		69,402		78,268
Net sales to other operating segments		52,853		55,039		52,944

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	Year ended March 31,
	2010			2011			2012
	(Yen in millions)
Sub total		107,621			124,441			131,212
Total
Net sales to external customers		572,473			675,596			681,362
Net sales to other operating segments		249,715			243,683			250,218
Adjustments(*)		(921	)		392			958
Inter segment elimination		(249,715	)		(243,683	)		(250,218	)
Consolidated total (net sales)	¥	571,552		¥	675,988		¥	682,320

(*) See Note 25 to our audited consolidated financial statements included elsewhere in this annual report.

	Year ended March 31,
	2010			2011			2012
	(Yen in millions)
Operating income or loss:
Nidec Corporation	¥	8,066		¥	6,799		¥	7,497
Nidec Electronics (Thailand)		23,227			21,473			15,027
Nidec (Zhejiang)		2,114			2,351			774
Nidec (Dalian)		4,808			2,658			431
Nidec Singapore		319			245			781
Nidec (H.K.)		661			564			359
Nidec Philippines		6,939			5,403			7,799
Nidec Sankyo		8,578			13,226			7,414
Nidec Copal		5,655			9,557			6,384
Nidec Tosok		2,825			4,009			3,140
Nidec Copal Electronics		2,422			4,969			4,194
Nidec Techno Motor		1,938			4,018			4,591
Nidec Motor		13			240			2,111
Nidec Motors & Actuators		553			1,274			3,126
All Others		11,450			16,184			11,177
Total		79,568			92,970			74,805
Adjustments(*)		(286	)		(101	)		(1,735	)
Consolidated total	¥	79,282		¥	92,869		¥	73,070

(*) See Note 25 to our audited consolidated financial statements included elsewhere in this annual report.

Net sales of Nidec Corporation increased ¥225 million, or 0.2%, from ¥146,740 million for the year ended March 31, 2011 to ¥146,965 million for the year ended March 31, 2012. This increase was primarily due to an increase in demand for general motors for electric power steering, despite a decrease in sales of small precision motors. Net sales to external customers of Nidec Corporation decreased ¥25,433 million, or 35.2%, from ¥72,334 million for the year ended March 31, 2011 to ¥46,901 million for the year ended March 31, 2012. Inter-segment revenues of Nidec Corporation increased ¥25,658 million, or 34.5%, from ¥74,406 million for the year ended March 31, 2011 to ¥100,064 million for the year ended March 31, 2012. In the year ended March 31, 2012, we implemented a strategic decision to distribute some of Nidec Corporation’s products, such as hard disk drives spindle motors, to customers indirectly through Nidec Singapore, resulting in the decrease in Nidec Corporation’s net sales to external customers and the increase in Nidec Corporation’s net sales to other operating segments. Operating income of Nidec Corporation increased ¥698 million, or 10.3%, from

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¥6,799 million for the year ended March 31, 2011 to ¥7,497 million for the year ended March 31, 2012. This increase was primarily due to an increase in fees from Nidec Electronics (Thailand) resulting from transfer pricing adjustments pursuant to the bilateral advance pricing arrangement provisionally agreed to between the tax authorities in Japan and Thailand relating to transactions between Nidec Corporation and Nidec Electronics (Thailand).

Net sales of Nidec Corporation increased ¥2,330 million, or 1.6%, from ¥144,410 million for the year ended March 31, 2010 to ¥146,740 million for the year ended March 31, 2011. The main reason for this increase was an increase in demand for hard disk drives spindle motors and general motors. Net sales to external customers of Nidec Corporation increased ¥5,049 million, or 7.5%, from ¥67,285 million for the year ended March 31, 2010 to ¥72,334 million for the year ended March 31, 2011. Inter segment revenues of Nidec Corporation decreased ¥2,719 million, or 3.5%, from ¥77,125 million for the year ended March 31, 2010 to ¥74,406 million for the year ended March 31, 2011. Operating income of Nidec Corporation decreased ¥1,267 million, or 15.7%, from ¥8,066 million for the year ended March 31, 2010 to ¥6,799 million for the year ended March 31, 2011. This decrease was due primarily to a decrease in royalty and commission fees from subsidiaries and the negative impact of the appreciation of the Japanese yen against the U.S. dollar.

Net sales of Nidec Electronics (Thailand) decreased ¥30,430 million, or 23.2%, from ¥131,305 million for the year ended March 31, 2011 to ¥100,875 million for the year ended March 31, 2012. This decrease was primarily due to the disruptions to our manufacturing facilities and customer supply chains for hard disk drives caused by the flooding in Thailand. Operating income of Nidec Electronics (Thailand) decreased ¥6,446 million, or 30.0%, from ¥21,473 million for the year ended March 31, 2011 to ¥15,027 million for the year ended March 31, 2012. This decrease was primarily due to the increased fee payment to Nidec Corporation resulting from the transfer pricing adjustments pursuant to the bilateral advance pricing arrangement between the tax authorities in Japan and Thailand, in addition to the decrease in sales.

Net sales of Nidec Electronics (Thailand) decreased ¥3,297 million, or 2.4%, from ¥134,602 million for the year ended March 31, 2010 to ¥131,305 million for the year ended March 31, 2011. This was primarily due to the appreciation of the Japanese yen against the U.S. dollar. Operating income of Nidec Electronics (Thailand) decreased ¥1,754 million, or 7.6%, from ¥23,227 million for the year ended March 31, 2010 to ¥21,473 million for the year ended March 31, 2011. This was primarily due to the appreciation of the Japanese yen and other Asian currencies against the U.S. dollar and an increase in depreciation expenses as a result of increased investments in manufacturing facilities in Thailand.

Net sales of Nidec (Zhejiang) decreased ¥1,071 million, or 3.4%, from ¥31,118 million for the year ended March 31, 2011 to ¥30,047 million for the year ended March 31, 2012. This decrease was primarily due to a decrease in sales of hard disk drive spindle motor components to other operating segments. Operating income of Nidec (Zhejiang) decreased ¥1,577 million, or 67.1% from ¥2,351 million for the year ended March 31, 2011 to ¥774 million for the year ended March 31, 2012. This decrease was primarily due to increases in wages and raw material costs.

Net sales of Nidec (Zhejiang) increased ¥2,142 million, or 7.4%, from ¥28,976 million for the year ended March 31, 2010 to ¥31,118 million for the year ended March 31, 2011. This increase was due primarily to an increase in demand for hard disk drives spindle motors, and the contribution of Nidec Bearing (Zhejiang) Corporation, our subsidiary in China previously included in the All Others segment, which was merged into Nidec (Zhejiang) Corporation in April 2011. Operating income of Nidec (Zhejiang) increased ¥237 million, or 11.2%, from ¥2,114 million for the year ended March 31, 2010 to ¥2,351 million for the year ended March 31, 2011. This increase was primarily due to the positive impact of the merger of Nidec Bearing (Zhejiang) Corporation into Nidec (Zhejiang) Corporation.

Net sales of Nidec (Dalian) decreased ¥5,330 million, or 21.3%, from ¥25,070 million for the year ended March 31, 2011 to ¥19,740 million for the year ended March 31, 2012. This decrease was primarily due to a decrease in demand for DC motors in addition to the appreciation of the Japanese yen against the U.S.

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dollar. Operating income of Nidec (Dalian) decreased ¥2,227 million, or 83.8% from ¥2,658 million for the year ended March 31, 2011 to ¥431 million for the year ended March 31, 2012. This decrease was primarily due to an increase in raw material costs and labor costs in addition to lower sales.

Net sales of Nidec (Dalian) decreased ¥6,180 million, or 19.8%, from ¥31,250 million for the year ended March 31, 2010 to ¥25,070 million for the year ended March 31, 2011. This decrease was primarily due to a decrease in sales volume of DC motors as a result of customers’ reductions of inventory. Operating income of Nidec (Dalian) decreased ¥2,150 million, or 44.7% from ¥4,808 million for the year ended March 31, 2010 to ¥2,658 million for the year ended March 31, 2011. This decrease was primarily due to increases in wages and raw material costs in addition to lower sales.

Net sales of Nidec Singapore increased ¥15,135 million, or 77.5%, from ¥19,533 million for the year ended March 31, 2011 to ¥34,668 million for the year ended March 31, 2012. This increase was primarily due to the implementation of our strategic decision to distribute some of Nidec Corporation’s products to customers indirectly through Nidec Singapore. Operating income of Nidec Singapore increased ¥536 million, or 218.8%, from ¥245 million for the year ended March 31, 2011 to ¥781 million for the year ended March 31, 2012. This increase was primarily due to the increase in sales.

Net sales of Nidec Singapore decreased ¥7,014 million, or 26.4%, from ¥26,547 million for the year ended March 31, 2010 to ¥19,533 million for the year ended March 31, 2011, primarily due to a decreases in sales volume for DC motors and hard disk drives spindle motors as a result of a major customer’s transfer of its manufacturing operations to China. Operating income of Nidec Singapore decreased ¥74 million, or 23.2%, from ¥319 million for the year ended March 31, 2010 to ¥245 million for the year ended March 31, 2011. This was primarily due to a decrease in sales volume.

Net sales of Nidec (H.K.) decreased ¥5,401 million, or 9.4%, from ¥57,311 million for the year ended March 31, 2011 to ¥51,910 million for the year ended March 31, 2012. This decrease was primarily due to the disruptions to our manufacturing facilities and customer supply chains caused by the flooding in Thailand in addition to the appreciation of the Japanese yen against the Hong Kong dollar. Operating income of Nidec (H.K.) decreased ¥205 million, or 36.3%, from ¥564 million for the year ended March 31, 2011 to ¥359 million for the year ended March 31, 2012. This decrease was primarily due to an increase in expenses relating to the establishment of additional sales branches for business expansion in China.

Net sales of Nidec (H.K.) increased ¥1,779 million, or 3.2%, from ¥55,532 million for the year ended March 31, 2010 to ¥57,311 million for the year ended March 31, 2011. This increase was primarily due to an increase in sales of hard disk drives spindle motors as a result of stronger customer demand. Operating income of Nidec (H.K.) decreased ¥97 million, or 14.7%, from ¥661 million for the year ended March 31, 2010 to ¥564 million for the year ended March 31, 2011. This decrease was mainly due to an increase in service fees to other subsidiaries.

Net sales of Nidec Philippines increased ¥3,875 million, or 10.8%, from ¥35,841 million for the year ended March 31, 2011 to ¥39,716 million for the year ended March 31, 2012. This increase was primarily due to our decision to increase production of hard disk drives spindle motors in the Philippines in response to the flooding in Thailand. Operating income of Nidec Philippines increased ¥2,396 million, or 44.3%, from ¥5,403 million for the year ended March 31, 2011 to ¥7,799 million for the year ended March 31, 2012. This increase was primarily due to lower material costs and outsourcing manufacturing costs resulting from the changes in the product mix and enhanced internal manufacturing, in addition to the increase in sales.

Net sales of Nidec Philippines decreased ¥3,069 million, or 7.9%, from ¥38,910 million for the year ended March 31, 2010 to ¥35,841 million for the year ended March 31, 2011. This decrease was primarily due to a decrease in sales volume of hard disk drives spindle motors as a result of customers’ reductions of inventory. Operating income of Nidec Philippines decreased ¥1,536 million, or 22.1%, from ¥6,939 million for the year ended March 31, 2010 to ¥5,403 million for the year ended March 31, 2011. This decrease was mainly due to a decrease in sales volume and the appreciation of the Japanese yen and other Asian currencies against the U.S. dollar.

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Net sales of Nidec Sankyo decreased ¥7,598 million, or 8.8%, from ¥86,583 million for the year ended March 31, 2011 to ¥78,985 million for the year ended March 31, 2012. This decrease was primarily due to the postponement of a customer’s planned project requiring capital expenditures on LCD panel handling robots and a decrease in orders from customers adversely affected by the customer supply chain disruptions caused by the flooding in Thailand. Operating income of Nidec Sankyo decreased ¥5,812 million, or 43.9%, from ¥13,226 million for the year ended March 31, 2011 to ¥7,414 million for the year ended March 31, 2012. This decrease was primarily due to higher material costs and overseas production costs, in addition to the decrease in sales.

Net sales of Nidec Sankyo increased ¥17,264 million, or 24.9%, from ¥69,319 million for the year ended March 31, 2010 to ¥86,583 million for the year ended March 31, 2011. This was due primarily to a significant increase in demand for LCD panel handling robots. Operating income of Nidec Sankyo increased ¥4,648 million, or 54.2%, from ¥8,578 million for the year ended March 31, 2010 to ¥13,226 million for the year ended March 31, 2011. This was primarily due to an increase in sales of products with higher margins and improved production cost management such as factory automation.

Net sales of Nidec Copal decreased ¥7,586 million, or 12.4%, from ¥61,028 million for the year ended March 31, 2011 to ¥53,442 million for the year ended March 31, 2012. This decrease was primarily due to the disruptions to our manufacturing facilities and customer supply chains for optical components such as shutters for digital camera caused by the earthquake in northeastern Japan in March 2011 and the flooding in Thailand. Operating income of Nidec Copal decreased ¥3,173 million, or 33.2%, from ¥9,557 million for the year ended March 31, 2011 to ¥6,384 million for the year ended March 31, 2012. This decrease was primarily due to the decrease in sales.

Net sales of Nidec Copal increased ¥4,990 million, or 8.9%, from ¥56,038 million for the year ended March 31, 2010 to ¥61,028 million for the year ended March 31, 2011. This was primarily due to an increase in sales of camera shutters for mobile phones and mold components. Operating income of Nidec Copal increased ¥3,902 million, or 69.0%, from ¥5,655 million for the year ended March 31, 2010 to ¥9,557 million for the year ended March 31, 2011. This increase was primarily due to further cost reduction achieved through such measures as in-sourcing of product manufacturing.

Net sales of Nidec Tosok increased ¥3,562 million, or 11.9%, from ¥29,946 million for the year ended March 31, 2011 to ¥33,508 million for the year ended March 31, 2012. This increase was primarily due to an increase in sales of automotive parts resulting from recovering demand for such parts in China and Europe. Operating income decreased ¥869 million, or 21.7%, from ¥4,009 million for the year ended March 31, 2011 to ¥3,140 million for the year ended March 31, 2012. This decrease was primarily due to an increase in fixed costs resulting from investments to enhance the manufacturing and research and development operations.

Net sales of Nidec Tosok increased ¥6,445 million, or 27.4%, from ¥23,501 million for the year ended March 31, 2010 to ¥29,946 million for the year ended March 31, 2011. This was primarily due to an increase in demand for automotive parts and machinery. Operating income increased ¥1,184 million, or 41.9%, from ¥2,825 million for the year ended March 31, 2010 to ¥4,009 million for the year ended March 31, 2011. This was due to improved production cost management through an expansion of overseas manufacturing in addition to the increase in sales.

Net sales of Nidec Copal Electronics decreased ¥1,462 million, or 4.8%, from ¥30,580 million for the year ended March 31, 2011 to ¥29,118 million for the year ended March 31, 2012. This decrease was primarily due to customers’ reductions of inventory such as trimmer potentiometers and switches. Operating income decreased ¥775 million, or 15.6%, from ¥4,969 million for the year ended March 31, 2011 to ¥4,194 million for the year ended March 31, 2012. This decrease was primarily due to the appreciation of the Japanese yen against the U.S. dollar, in addition to the decrease in sales.

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Net sales of Nidec Copal Electronics increased ¥5,595 million, or 22.4%, from ¥24,985 million for the year ended March 31, 2010 to ¥30,580 million for the year ended March 31, 2011. This was primarily due to an increase in demand for electronic circuit components and sensors. Operating income increased ¥2,547 million, or 105.2%, from ¥2,422 million for the year ended March 31, 2010 to ¥4,969 million for the year ended March 31, 2011. This was primarily due to cost reductions achieved through enhanced economies of scale resulting from the expansion of the segment’s operations, in addition to the increase in sales.

Net sales of Nidec Techno Motor decreased ¥2,814 million, or 6.4%, from ¥43,824 million for the year ended March 31, 2011 to ¥41,010 million for the year ended March 31, 2012. This decrease was primarily due to inventory adjustments-related effects in the European and Asian markets and the negative effects of the flooding in Thailand. However operating income increased ¥573 million, or 14.3%, from ¥4,018 million for the year ended March 31, 2011 to ¥4,591 million for the year ended March 31, 2012. This increase was primarily due to the cessation of manufacturing of unprofitable products, in addition to the insurance income relating to the flooding in Thailand.

Net sales of Nidec Techno Motor increased ¥7,977 million, or 22.3%, from ¥35,847 million for the year ended March 31, 2010 to ¥43,824 million for the year ended March 31, 2011. This was primarily due to an increase in demand for general motors for industrial use in Japan and home appliances use in Asia. Operating income increased ¥2,080 million, or 107.3%, from ¥1,938 million for the year ended March 31, 2010 to ¥4,018 million for the year ended March 31, 2011. This increase was primarily due to the increase in sales and cost reduction achieved through such measures as in-sourcing of product manufacturing.

Net sales of Nidec Motor increased ¥33,143 million or 65.1%, from ¥50,886 million for the year ended March 31, 2011 to ¥84,029 million for the year ended March 31, 2012. This increase was primarily due to the contribution of the Nidec Motor Corporation and other subsidiaries, which were newly consolidated on or after October 1, 2010. Operating income increased ¥1,871 million from ¥240 million for the year ended March 31, 2011 to ¥2,111 million for the year ended March 31, 2012. This increase was primarily due to the positive impact of the newly consolidated Nidec Motor Corporation and other subsidiaries.

Net sales of Nidec Motor increased ¥47,854 million from ¥3,032 million for the year ended March 31, 2010 to ¥50,886 million for the year ended March 31, 2011. This increase was primarily due to the contribution of the Nidec Motor Corporation and other subsidiaries, which were newly consolidated on or after October 1, 2010. Operating income increased ¥227 million from ¥13 million for the year ended March 31, 2010 to ¥240 million for the year ended March 31, 2011. This increase was primarily due to the positive impact of the newly consolidated Nidec Motor Corporation and other subsidiaries.

Net sales of Nidec Motors & Actuators increased ¥11,282 million or 25.0%, from ¥45,073 million for the year ended March 31, 2011 to ¥56,355 million for the year ended March 31, 2012. This increase was primarily due to an increase in demand for automotive motors in Europe. Operating income increased ¥1,852 million, or 145.4%, from ¥1,274 million for the year ended March 31, 2011 to ¥3,126 million for the year ended March 31, 2012. This increase was primarily due to the increase in sales and cost reduction measures.

Net sales of Nidec Motors & Actuators increased ¥3,455 million or 8.3%, from ¥41,618 million for the year ended March 31, 2010 to ¥45,073 million for the year ended March 31, 2011. This was primarily due to an increase in demand for general motors for automobiles in North American and Europe. Operating income increased ¥721 million, or 130.4%, from ¥553 million for the year ended March 31, 2010 to ¥1,274 million for the year ended March 31, 2011. This increase was primarily due to the increase in sales and cost reduction measures.

With respect to the All Others segment, net sales increased ¥6,711 million, or 5.4%, from ¥124,441 million for the year ended March 31, 2011 to ¥131,212 million for the year ended March 31, 2012. This

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increase was primarily due to the contribution of ¥12,018 million of sales at Nidec Seimitsu and its subsidiaries which were newly consolidated on or after July 1, 2011, partially offset by a decrease in sales of machinery and small precision motors. Operating income decreased ¥5,007 million, or 30.9% from ¥16,184 million for the year ended March 31, 2011 to ¥11,177 million for the year ended March 31, 2012. This decrease was primarily due to an increase in raw material costs

With respect to the All Others segment, net sales increased ¥16,820 million, or 15.6%, from ¥107,621 million for the year ended March 31, 2010 to ¥124,441 million for the year ended March 31, 2011. This increase was primarily due to an increase in demand for machinery such as electronic circuit testing systems. Operating income increased ¥4,734 million, or 41.3% from ¥11,450 million for the year ended March 31, 2010 to ¥16,184 million for the year ended March 31, 2011. This increase was primarily due to the increase in sales.

Accounting Changes

As of April 1, 2011, we adopted FASB Accounting Standards Codification^™ (ASC) 350 “Intangibles—Goodwill and Other” updated by Accounting Standards Update (ASU) No. 2010-28 “When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. The adoption of this standard did not have a material impact on our consolidated financial position, results of operations or liquidity.

As of April 1, 2011, we adopted FASB ASC 805 “Business Combinations” updated by ASU No.2010-29 “Disclosure of Supplementary Pro Forma Information for Business Combinations.” ASU 2010-29 requires a public entity that enters into business combination(s) to disclose pro forma revenue and earnings of the combined entity in the comparative financial statements as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. ASU 2010-29 also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU2010-29 is a provision for disclosure. The adoption of ASU2010-29 did not have any impact on our consolidated financial position, results of operations or liquidity.

As of January 1, 2012, we adopted FASB ASC 820 “Fair Value Measurement” updated by ASU No.2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 amends current U.S. GAAP to create more commonality with IFRS by changing some of the wording used to describe requirements for measuring fair value and for disclosing information about fair value measurements. The adoption of this standard did not have a material impact on our consolidated financial position, results of operations or liquidity.

Recent Accounting Pronouncements to Be Adopted in Future Periods

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to report other comprehensive income and its components in the consolidated statement of changes in equity and requires an entity to report components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. Additionally, in December 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” which indefinitely defers the requirement in ASU 2011-05 to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net

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income is presented and the statement in which other comprehensive income is presented. During the deferral period, the existing requirements in U.S. GAAP for the presentation of reclassification adjustments must continue to be followed. These standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. Early adoption is permitted. These standards are provisions for disclosure. The adoption of these standards will not have any impact on our consolidated financial position, results of operations or liquidity.

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU 2011-08 allows an entity the option of performing a qualitative assessment before calculating the fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step impairment test would be required. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. We are currently evaluating the potential impact of adopting ASU 2011-08 on our consolidated financial position, results of operations or liquidity.

Application of Critical Accounting Policies

Nidec and its subsidiaries in Japan maintain their records and prepare their financial statements in accordance with accounting principles generally accepted in Japan, and its foreign subsidiaries in conformity with those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results may differ from these estimates, judgments and assumptions.

An accounting estimate in our financial statements is a critical accounting estimate if it requires us to make assumptions about matters that are highly uncertain at the time the accounting estimate is made, and either different estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on the presentation of our financial condition, changes in financial condition or results of operations. We have identified the following critical accounting policies with respect to our financial presentation.

Inventories

Our inventories are stated at the lower of cost or market value. Cost is determined principally using the weighted average cost method and the market value is mainly based on net realizable value less direct sales costs. These products are exposed to frequent innovation, the introduction of new products to the market and short product life cycles due to rapid technological advances and model changes. We periodically assess the market value of our inventory, based on sales trends and forecasts and technological changes and write off inventories with no movement for one year or when it is apparent that there is no possibility of future sales or usage. We may have to recognize large amounts of inventory write-offs as a result of an unexpected decline in market conditions, changes in demand or our product line.

Other-than-temporary Losses on Marketable Securities

We review the market value of our marketable securities at the end of each fiscal quarter. Our marketable securities consist of available-for-sale securities and held-to-maturity securities. Other-than-temporary losses on individual marketable securities are charged to income in the period as incurred. Losses on available-for-sale securities are classified as other-than-temporary based on the length of time and the extent to which the fair value has been less than the carrying amount. Our management employs a

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systematic methodology to assess the recoverability of such investments by reviewing the financial position of underlying companies and prevailing market conditions in which these companies operate to determine if our investment in each of these companies is impaired and whether the impairment is other-than-temporary. Held-to-maturity securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

We believe that the accounting estimate related to investment impairment is a critical accounting policy because:

• it is highly susceptible to change from period to period because it requires our management to make assumptions about future financial condition and cash flows of investees; and

• the impact that recognizing an impairment would have on the total assets reported on our balance sheet as well as our operating income would be material.

As of March 31, 2012, the estimated fair value of our marketable securities was ¥14,353 million. We recorded a net loss from marketable securities in the amount of ¥202 million for the year ended March 31, 2012.

The following table shows the other-than-temporary losses on marketable securities.

	Year ended March 31,
	2010		2011		2012
	(Yen in millions)
Other-than-temporary losses on marketable securities	¥	273	¥	202	¥	253

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts based on the historical rate of credit losses experienced. We additionally provide allowances for specific customer accounts deemed uncollectible. Management assesses the need for specific allowances based on changes in the customers’ financial condition and length of time the account has remained overdue. As our customer base is highly concentrated, the nonfulfillment or delay in payment caused by even one of our major customers may require us to record a significant additional allowance. For the year ended March 31, 2012, sales to our two largest customers represented approximately 22% of our net sales. Our accounts receivable are likewise concentrated. At March 31, 2012, the two customers represented ¥39,159 million, or 23%, of our gross accounts receivable. In addition, during economic downturns, a certain number of our customers may have difficulty with their cash flows.

Although we believe that we can make reliable estimates for doubtful accounts, customer concentrations as well as overall economic conditions may affect our ability to accurately estimate the allowance for doubtful accounts. Our allowance for doubtful accounts amounted to ¥496 million as of March 31, 2012. Our trade notes and accounts receivable balance was ¥182,462 million, net of allowance for doubtful accounts, as of March 31, 2012.

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The following table shows the provision for doubtful accounts, net of reversal.

	Year ended March 31,
	2010		2011		2012
	(Yen in millions)
Provision for doubtful accounts, net of reversal	¥	31	¥	26	¥	30

Deferred Tax Assets

As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process requires us to estimate our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as deferred revenue, for tax and accounting purposes. These differences resulted in deferred tax assets and liabilities, which were included within our consolidated balance sheet. As of March 31, 2012, we had deferred tax assets in the amount of ¥36,781 million. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must include an expense within the tax provision in our income statement.

Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We have recorded a valuation allowance of ¥9,786 million as of March 31, 2012, due to uncertainties related to our ability to utilize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward for tax purposes incurred by our subsidiaries. Our determination to record valuation allowances is based on a history of unprofitable periods by the subsidiaries and their estimated future profitability. In the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to establish an additional valuation allowance which could have an adverse effect on our financial position and results of operations.

Impairment of Long-lived Assets

Long-lived assets consist primarily of property, plant and equipment, comprising approximately 28.8% of our total assets as of March 31, 2012, and other intangible assets. We carefully monitor the appropriateness of the estimated useful lives of these assets. Since the fiscal year ended March 31, 2003, the first year we adopted testing for impairment of long-lived assets under ASC 360 “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amounts of these asset groups may not be recoverable, we have reviewed the respective asset groups for impairment. An impairment loss is recognized when the carrying amount of an asset group exceeds the estimated undiscounted future cash flows of the group. We review idle assets for possible impairment based on their condition or based on the probability of future use. Changes in technology, market demand, our planned product mix, or in our intended use of these assets, may cause the estimated period of use or the value of these assets to change. In addition, changes in general industry conditions such as increased competition could cause the value of a certain amount of these assets to change. Estimates and assumptions used in both estimating the useful life and evaluating potential impairment issues require a significant amount of judgment. As such, our judgment as to the recoverability of capitalized amounts and the amount of any impairment will be significantly impacted by such factors.

Acquisitions

In recent years, we have made a number of significant business acquisitions, which had been accounted for using the purchase method of accounting until the fiscal year ended March 31, 2009. As of April 1, 2009, we adopted ASC 805, “Business Combinations”. ASC 805 requires that business acquisitions are accounted for using the acquisition method of accounting. Application of the purchase method and the

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acquisition method requires our management to make complex judgments about the measurement of fair value of the net assets we acquire and estimation of the related useful lives. The determinations of fair value of assets and liabilities are primarily based on factors such as cash flow analysis and quoted market prices among others. We also obtained independent appraisers’ reports for significant purchases.

Valuation of Goodwill

Under ASC 350 “Intangibles—Goodwill and Other”, goodwill acquired in business combinations is not amortized but tested annually for impairment. We test for impairment at the reporting unit level on January 1 of each year. In addition, we test for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Factors we consider important which could trigger an impairment review include the following:

• significant underperformance relative to expected historical or projected future operating results;

• significant changes in the manner of our use of the acquired assets or the strategy for our overall business;

• significant negative industry or economic trends;

• significant decline in the stock price of the acquired entity for a sustained period; and

• market capitalization of the acquired entity relative to its net book value.

This test is a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on discounted future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill.

In order to evaluate the sensitivity of the fair value calculations on the impairment analysis, we apply a hypothetical decrease to the fair value of each reporting unit. Based on our discounted cash flow models, there was sufficient fair value above the carrying amount of reporting units so that we would not expect near term changes in the operating results to trigger an impairment. Also, among the reporting units, when testing the goodwill for impairment allocated to our listed subsidiaries, consideration is given to each listed subsidiary’s carrying amount and its market capitalization adjusted to include an estimated control premium, among other factors. The estimated control premium is derived from reviewing observable transactions involving the purchase of controlling interests in comparable companies. Although exchange traded, trading volumes may be low and the markets for the listed subsidiaries shares may not always be highly liquid. The market capitalization before including the estimated control premium is calculated using the relevant shares outstanding and a stock price at the test date. At the test date, the market capitalization before including the estimated control premium was below the carrying amount of the reporting units for Nidec Sankyo (which includes goodwill of ¥26,100 million in its carrying amount as of March 31, 2012), Nidec Copal (which includes goodwill of ¥16,462 million in its carrying amount as of March 31, 2012) and Nidec Copal Electronics (which includes goodwill of ¥6,561 million in its carrying amount as of March 31, 2012). After including estimated control premiums, the adjusted market capitalization exceeded the carrying value of reporting units for the listed subsidiaries. The exercise of reconciling the adjusted market capitalization to fair value, which is based on discounted future cash flows, further supports our conclusion on the fair value of each of the reporting unit exceeds its carrying amount.

When we determine that the carrying value of goodwill and other intangibles may not be recoverable,

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based upon the existence of one or more of the above indicators of impairment, we measure any impairment based on a projected discounted cash flow determined by our management to be commensurate with the risk inherent in our current business model. These models include assumptions which are subject to uncertainty, including forecasted cash flows, changes in technology, customer demand and the pace of economic recovery from natural disasters which could differ from actual performance. Goodwill amounted to ¥80,525 million as of March 31, 2012.

Pension Plans

We account for our defined benefit pension plans based on actuarial valuations. For periodic pension calculation, we are required to assume some components, which include expected return on plan assets, discount rate, rate of increase in compensation levels and average remaining years of service. We use long-term historical actual return information and estimated future long-term investment returns by reference

The following table shows the sensitivity to a change in discount rates and the expected rate of return on plan assets, holding all other assumptions constant.

	Yen in millions
	Effect on pre-tax income			Effect on PBO
	For the year ending March 31, 2013			As of March 31, 2012
Discount rates
0.5% decrease	¥	(15	)	¥	1,153
0.5% increase		15			(1,091	)
Expected rate of return on plan assets
0.5% decrease	¥	(38	)
0.5% increase		38

Income Taxes

We adopted FASB Accounting Standards Codification^™ (ASC), 740 “Income Taxes” on April 1, 2007. We consider many factors when evaluating and estimating income tax uncertainties. These factors include an evaluation of the technical merits of the tax positions as well as the amounts and probabilities of the outcomes that could be realized upon settlement. The actual resolutions of those uncertainties will inevitably differ from those estimates, and such differences may be material to the financial statements.

Revenue recognition

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. For small precision motors, general motors and electronic and optical components, these criteria are generally met at the time a product is delivered to the customers’ site which is the time the customer has taken title to the product and the risk and rewards of ownership have been substantively transferred. These conditions are met at the time of delivery to customers in domestic sales (FOB destination) and at the time of shipment for export sales (FOB shipping point). Revenue for machinery sales is recognized upon receipt of final customer acceptance. At the time the related revenue is recognized, we make provisions for estimated product returns.

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B. Liquidity and Capital Resources.

As part of our efforts to enhance liquidity, we continued to focus particularly on efficient use of capital and better management of foreign exchange risk during the year ended March 31, 2012. For example, in an effort to efficiently use capital, we continued to strive to make effective use of our cash management system, which is shared among our subsidiaries in Japan. We have also created a cash management system that is shared among our subsidiaries in China. In November 2011, we established Nidec Management Shanghai Corporation in China as a subsidiary to supervise and coordinate the surplus cash management of our group companies in China to achieve higher capital efficiency. We also expanded our risk mitigation initiatives, including centralized management of foreign exchange risks and management of the risks associated with exchange rate fluctuations between multiple local currencies. Surplus U.S. dollars owned by our subsidiaries in China were converted into and held in Chinese yuan time deposits, in preparation for a possible Chinese currency revaluation. As of March 31, 2012, our cash and cash equivalents of Chinese yuan were approximately RMB 1,100 million.

Our principal capital needs include (1) purchases of property, plant and equipment and other assets, (2) research and development activities, (3) mergers and acquisitions, (4) investments in subsidiaries, (5) purchases of raw materials, (6) employees’ salaries, wages and other payroll costs, (7) repayment of short-term borrowings and long-term debt, and (8) repurchase of shares of our common stock.

Investments for the purchase of property, plant, equipment and other assets totaled ¥41,446 million for the year ended March 31, 2012. We plan to invest ¥37,455 million in additions to the property, plant and equipment for the year ending March 31, 2013, including plans to purchase property, plant and equipment to replace the assets damaged by the Thai flooding. Outstanding commitments for the purchase of property, plant and equipment and other assets amounted to ¥7,292 million as of March 31, 2012.

Research and development expenses were ¥30,050 million for the year ended March 31, 2012, and are expected to reach approximately ¥36,000 million for the year ending March 31, 2013. For further information on our research and development expenses, see “—C. Research and Development, Patents and Licenses, etc.”

We acquired Sanyo Seimitsu Co., Ltd. (which was subsequently renamed Nidec Seimitsu) on July 1, 2011. As a result of the seller increasing the capital of Nidec Seimitsu prior to its sale to us, we recorded a positive cash inflow of ¥5,201 million from acquisitions of business, net of cash acquired for the year ended March 31, 2012. Since April 2012, we have acquired The Minster Machine Company, a U.S. manufacturer of press machines, and Ansaldo Sistemi Industriali S.p.A., an Italian manufacturer of industrial motors, generators and drives. We intend to continue to seek opportunities for acquiring other companies and making additional investments in our subsidiaries. For a more detailed discussion of our recent acquisitions, see “—A. Operating Results—Overview.”

Our short-term borrowings, consisting of bank loans and commercial paper, were ¥86,608 million as of March 31, 2012, an increase of ¥34,590 million from ¥52,018 million as of March 31, 2011. In October 2011, we established a domestic commercial paper program allowing issuance of up to ¥100,000 million. As of March 31, 2012, we had ¥27,000 million of commercial paper issued under the program and outstanding in the Japanese commercial paper market, which was recorded in short-term borrowings in our audited consolidated balance sheet as of the same date.

Our long-term debt was ¥101,236 million as of March 31, 2012, a decrease of ¥583 million from ¥101,819 million as of March 31, 2011. Our long-term debt primarily consists of an aggregate principal amount of ¥100,000 million of zero coupon euro yen convertible bonds due 2015.

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We currently have a share repurchase plan pursuant to which we are authorized to repurchase the lesser of an aggregate of 5,000,000 shares of our common stock and an aggregate of ¥40.0 billion between February 7, 2012 and February 6, 2013. We did not repurchase any shares under the plan between February 7, 2012 and March 31, 2012. Between April 1. 2012 and June 22, 2012, we repurchased an aggregate of 2,615,100 shares for approximately ¥16.8 billion under the plan. Our previous share repurchase plan expired on February 6, 2012, pursuant to which we repurchased an aggregate of 2,316,700 shares for approximately ¥15.0 billion between February 7, 2011 and February 6, 2012. For more information on our share repurchase plan, see “Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.”

On March 28, 2012, we submitted to the Director General of the Kanto Local Finance Bureau of the Ministry of Finance of Japan a shelf registration statement for issuances of corporate bonds in Japan of an aggregate principal amount of up to ¥200 billion between April 5, 2012 and April 4, 2014. The shelf registration was intended to enhance our flexibility and agility in obtaining funding as an alternative source of funding in addition to financing through financial institutions and other sources and, through the further diversification of funding sources, improve our financial stability. As of the date of this annual report, we have not issued any bonds under the shelf registration statement.

A substantial portion of our unsecured funding is raised by the parent company (Nidec Corporation), and is then lent to its subsidiaries to meet their respective capital requirements. Under this subsidiary funding policy, we seek to lower the financing cost, maintain sufficient line of credit, and ensure agile funding for our group companies.

We also consider extending our funding options to direct financing in order to enhance our financial agility in mergers and acquisitions, research and development activities and facility investments.

We had cash and cash equivalents of ¥130,290 million as of March 31, 2012, compared to ¥94,321 million as of March 31, 2011.

We believe that these funding sources, together with our cash flow from operations, will sufficiently meet our capital requirements for the fiscal year ending March 31, 2013.

Assets, liabilities and shareholders’ equity

Our total assets increased ¥52,196 million from ¥748,205 million as of March 31, 2011 to ¥800,401 million as of March 31, 2012. Excluding the impact of the newly consolidated companies, including Nidec Seimitsu and other subsidiaries, total assets increased ¥37,501 million from ¥748,205 million as of March 31, 2011 to ¥785,706 million as of March 31, 2012. The increase of ¥52,196 million in total assets was mainly due to an increase in cash and cash equivalents of ¥35,969 million as described below in “—Cash Flows,” and an increase in trade accounts receivable of ¥17,164 million as a result of the recovering demand from some customers subsequent to the flooding in Thailand.

Our total liabilities increased ¥37,091 million from ¥337,699 million as of March 31, 2011 to ¥374,790 million as of March 31, 2012. Excluding the impact of the newly consolidated companies, including Nidec Seimitsu and other subsidiaries, total liabilities increased ¥33,390 million from ¥337,699 million as of March 31, 2011 to ¥371,089 million as of March 31, 2012. The increase of ¥37,091 million was mainly due to an increase in short-term borrowings of ¥34,590 million, mostly consisting of Japanese yen-denominated borrowings including the commercial paper described above, as part of our asset liability management.

Our working capital, defined as current assets less current liabilities, increased ¥20,665 million from ¥166,262 million as of March 31, 2011 to ¥186,927 million as of March 31, 2012.

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Our receivable turnover ratio is calculated by dividing net sales for a fiscal year by the fiscal year-end trade notes and accounts receivable balance. Our receivable turnover ratio decreased 0.4 points from 4.1 points for the year ended March 31, 2011 to 3.7 points for the year ended March 31, 2012. This was mainly due to the increase in trade accounts receivable. The inventory turnover ratio is calculated by dividing cost of products sold for a given year by the year-end inventory balance. Our inventory turnover ratio increased 0.2 points from 5.5 points for the year ended March 31, 2011 to 5.7 points for the year ended March 31, 2012, primarily due to the increase in cost of products sold.

Our total shareholders’ equity increased ¥14,932 million from ¥355,250 million as of March 31, 2011 to ¥370,182 million as of March 31, 2012. This increase was mainly due to an increase in retained earnings of ¥28,332 million, which was partially offset by an increase in treasury stock, at cost, of ¥10,155 million. As a result, the ratio of Nidec Corporation shareholders’ equity to total assets decreased 1.3 percentage points from 47.5% as of March 31, 2011 to 46.2% as of March 31, 2012.

Cash Flows

Net cash provided by operating activities decreased ¥26,372 million from ¥83,084 million for the year ended March 31, 2011 to ¥56,712 million for the year ended March 31, 2012. The decrease in net cash provided by operating activities was primarily due to the decrease in consolidated net income of ¥13,205 million and the negative impact of changes in operating assets and liabilities of ¥10,353 million.

For the year ended March 31, 2012, we had ¥56,712 million of cash inflows provided by operating activities mainly due to consolidated net income of ¥44,287 million. However, net cash provided by operating activities were negatively impacted by changes in operating assets and liabilities of ¥25,396 million, which consisted of an increase in operating assets of ¥15,076 million and a decrease in operating liabilities of ¥10,320 million. The increase in operating assets of ¥15,076 million was primarily due to the recovering demand of some customers for our products subsequent to the flooding in Thailand.

For the year ended March 31, 2011, we had ¥83,084 million of cash inflows mainly due to consolidated net income of ¥57,492 million. On the other hand, we had a decrease in operating assets and liabilities of ¥15,043 million which consisted of an increase in operating assets of ¥11,861 million and a decrease in operating liabilities of ¥3,182 million. The increase in operating assets of ¥11,861 million was primarily due to decrease customers demand caused by the earthquake and in northeastern Japan and increased orders from some customers, which resulted in higher inventory levels.

Net cash provided by operating activities decreased ¥6,996 million from ¥90,080 million for the year ended March 31, 2010 to ¥83,084 million for the year ended March 31, 2011. Although our consolidated net income increased ¥1,341 million, net cash provided by operating activities decreased primarily due to the negative impact of changes in operating assets and liabilities of ¥9,858 million.

For the year ended March 31, 2011, we had ¥83,084 million of cash inflows mainly due to consolidated net income of ¥57,492 million. On the other hand, we had a decrease in operating assets and liabilities of ¥15,043 million which consisted of an increase in operating assets of ¥11,861 million and a decrease in operating liabilities of ¥3,182 million. The increase in operating assets of ¥11,861 million was primarily due to decreased customers demand caused by the earthquake and subsequent events in northeastern Japan and increased orders from some customers, which resulted in higher inventory levels.

For the year ended March 31, 2010, we had ¥90,080 million of cash inflows mainly due to consolidated net income of ¥56,151 million. On the other hand, we had a decrease in operating assets and liabilities of ¥5,185 million which consisted of an increase in operating assets of ¥40,979 million and an increase in operating liabilities of ¥35,794 million owing to sales recovery.

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Net cash used in investing activities decreased ¥87,024 million from ¥106,942 million for the year ended March 31, 2011 to ¥19,918 million for the year ended March 31, 2012. The decrease in net cash used in investing activities were primarily due to a decrease in acquisitions of business, net of cash acquired, of ¥56,795 million, insurance proceeds related to property, plant and equipment damaged in flood of ¥20,804 million, and a decrease in additions to property, plant and equipment of ¥13,564 million.

For the year ended March 31, 2012, ¥19,918 million of cash outflows was mainly due to additions to property, plant and equipments of ¥41,446 million, which was partially offset by insurance proceeds related to property, plant and equipment damaged in flood of ¥20,804 million.

For the year ended March 31, 2011, ¥106,942 million of cash outflows was mainly due to additions to property, plant and equipments of ¥55,010 million for constructions of additional plant, and acquisitions of business, net of cash acquired of ¥51,594 million.

Net cash used in investing activities increased ¥66,428 million from ¥40,514 million for the year ended March 31, 2010 to ¥106,942 million for the year ended March 31, 2011. The increase in net cash used in investing activities were mainly due to an increase in acquisitions of business, net of cash acquired, of ¥47,198 million and an increase in additions to property, plant and equipment of ¥18,402 million, resulting from our increased capital investments.

For the year ended March 31, 2011, ¥106,942 million of cash outflows was mainly due to additions to property, plant and equipments of ¥55,010 million for constructions of additional plant, and acquisitions of business, net of cash acquired of ¥51,594 million.

For the year ended March 31, 2010, ¥40,514 million of cash outflows was mainly due to additions to property, plant and equipments of ¥36,608 million for constructions of additional plants, and acquisitions of business, net of cash acquired of ¥4,396 million.

Net cash used in financing activities was ¥814 million for the year ended March 31, 2012, while net cash provided by financing activities was ¥3,764 million for the year ended March 31, 2011.

For the year ended March 31, 2012, ¥814 million of the cash outflows was primarily due to dividends paid to shareholders of Nidec Corporation of ¥12,399 million and purchases of treasury stock of ¥10,155 million. Our cash inflows for the year ended March 31, 2012 resulted from an increase in short-term borrowings of ¥26,060 million.

For the year ended March 31, 2011, ¥3,764 million of the cash inflows was mainly due to the proceeds from the issuance of corporate bonds of ¥100,500 million. Our cash outflows for the year ended March 31, 2011 primarily resulted from a decrease in short-term borrowings of ¥63,205 million, purchases of treasury stock of ¥11,226 million and dividends paid to shareholders of Nidec Corporation of ¥11,143 million.

Net cash provided by financing activities was ¥3,764 million for the year ended March 31, 2011, while net cash used in financing activities was ¥122,779 million for the year ended March 31, 2010.

For the year ended March 31, 2011, ¥3,764 million of the cash inflows was mainly due to the proceeds from the issuance of corporate bonds of ¥100,500 million. Our cash outflows for the year ended March 31, 2011 primarily resulted from a decrease in short-term borrowings of ¥63,205 million, purchases of treasury stock of ¥11,226 million and dividends paid to shareholders of Nidec Corporation of ¥11,143 million.

For the year ended March 31, 2010, ¥122,779 million of the cash outflows was mainly due to a decrease in short-term borrowings of ¥109,100 million and dividends paid to shareholders of Nidec Corporation of ¥7,661 million.

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As a result of the foregoing factors and the effect of exchange rate changes, our total outstanding balance of cash and cash equivalents increased ¥35,969 million from ¥94,321 million as of March 31, 2011 to ¥130,290 million as of March 31, 2012. Currency of cash and cash equivalents consists primarily of the U.S. dollar, the Thai baht, the Japanese yen, the Chinese yuan and the Euro.

We believe that cash generated from operating activities are sufficient to meet our cash obligations for the current fiscal year.

C. Research and Development, Patents and Licenses, etc.

In order to remain competitive, we need to maintain the ability to create products with specialized quality attributes that precisely meet the evolving performance and environmental requirements of our customers. In addition to the continued emphasis on improved running accuracy, controllability, compactness, operational quietness and energy efficiency, we have our research and development activities focus on designing ecology conscious and cost effective products that require less raw materials and energy to manufacture and operate in order to reduce our and our customers’ environmental burden and manufacturing costs.

We allocate our research and development resources primarily towards the development of motors in the “General Motors” and “Small Precision Motors” categories with key priorities placed on the following areas:

• Prototype development targeted at new markets and applications,

• Design improvements intended to reduce raw materials, such as aluminum, steel, copper and permanent magnets (rare-earth compounds), used in our products and thereby achieving superior suitability for miniaturization and low-cost automation,

• Internal development of electronic control units and integrated modular motor drives for automotive systems, and

• Energy-efficient, high-speed hard disk drives spindle motors for use in data center servers.

As of March 31, 2012, we employed 3,153 people engaged in research and development activities mainly in Japan as well as in China, the United States, Germany, Taiwan, Mexico, Vietnam, Italy, Spain, the United Kingdom, Thailand, Indonesia, Poland, South Korea, and Singapore.

We incurred research and development expenses of ¥24,271 million, 27,737 million and 30,050 million for the fiscal years ended March 31, 2010, 2011 and 2012, respectively.

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The following table sets forth our research and development expenses by operating segment for the year ended March 31, 2012:

	Yen in Millions
	For the year  ended March 31, 2012
Nidec Corporation	¥	15,747
Nidec Electronics (Thailand)		—
Nidec (Zhejiang)		—
Nidec (Dalian)		—
Nidec Singapore		—
Nidec (H.K.)		—
Nidec Philippines		—
Nidec Sankyo		3,850
Nidec Copal		1,958
Nidec Tosok		986
Nidec Copal Electronics		1,341
Nidec Techno Motor		1,267
Nidec Motor		2,540
Nidec Motors & Actuators		1,135
All Others		1,226
Total	¥	30,050

Much of our research and development is conducted by our domestic subsidiaries, which we then reimburse for costs incurred. We also cooperate with our affiliates to conduct significant research and development. We anticipate spending approximately ¥36,000 million on research and development in the year ending March 31, 2013. We believe that our research and development expenses are sufficient for sustaining our competitiveness in the motor industry and other industries.

D. Trend Information.

The information required by this item is set forth in “—A. Operating Results,” “—B. Liquidity and Capital Resources” and “Item 4.B. Information on the Company—Business Overview.”

E. Off-Balance Sheet Arrangements.

We have guaranteed approximately ¥86 million of bank loans for employees in connection with their housing costs at March 31, 2012. If an employee defaults on his or her loan payments, we would be liable under the guarantees. The maximum undiscounted amount of our obligation to make future payments in the event of defaults is approximately ¥86 million. The current carrying amount of the liabilities for our obligations under the guarantees is zero.

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F. Tabular Disclosure of Contractual Obligations.

The following tables represent our contractual obligations and other commercial commitments as of March 31, 2012:

	(Yen in millions)
	Payments Due by Period
	Total		Less than 1 year		2-3 years		4-5 years		After 5  years
Contractual Obligations
Long-term Debt	¥	101,910	¥	674	¥	531	¥	100,550	¥	155
Capital Lease Obligations		1,308		652		469		154		33
Interest on debt*1		34		18		12		3		1
Operating Lease Obligations		4,179		1,481		1,203		753		742
Purchase Commitments for Fixed Assets		7,292		7,292		—		—		—
Total Contractual Cash Obligations		114,723		10,117	¥	2,215	¥	101,460	¥	931
Contribution under Pension Plans*2	¥	2,718	¥	2,718		—		—		—
	Amount of Commitment Expiration per Period
	Total amounts committed		Less than 1 year		2-3 years		4-5 years		Over 5 years
Other Commercial Commitments
Guarantees	¥	86	¥	24	¥	17	¥	11	¥	34
Total Commercial Commitments	¥	86	¥	24	¥	17	¥	11	¥	34

*1 Interest at variable interest rates are assumed based on the current applicable rate of 2.5%.

*2 Amounts are only available for payments due in less than one year.

We excluded unrecognized tax benefits from the above contractual obligation table as we are unable to make reasonable estimates of the period of settlements. As of March 31, 2012, we had unrecognized tax benefits of ¥1,766 million. For further information related to our unrecognized tax benefits, see Note 16 to our audited consolidated financial statements included elsewhere in this annual report.

We issued an aggregate principal amount of ¥100,000 million of euro yen convertible bonds due 2015 on September 21, 2010. The net proceeds of the issuance of convertible bonds were applied towards the repayment of existing short-term borrowings. For further information, see Note 11 to our audited consolidated financial statements elsewhere in this annual report.

Our capital commitments as of March 31, 2012 principally consisted of commitments to purchase property, plant and equipment. Commitments outstanding for the purchase of property, plant and equipment and other assets increased from approximately ¥315 million as of March 31, 2011 to approximately ¥7,292 million as of March 31, 2012. Between March 31, 2010 and 2011, commitments outstanding for the purchase of property, plant and equipment and other assets decreased from approximately ¥2,115 million to approximately ¥315 million. The increase in our capital commitments between March 31, 2011 and 2012 were mainly due to increases in commitments for constructions of our new research and development facilities in Japan, and purchases of property, plant and equipment. We expect to make capital expenditures in addition to those for which we have outstanding commitments. See “Item 4.A. Information on the Company—History and Development of the Company” and Item 4.D. Information on the Company—Property, Plants and Equipment.”

For further information on our commitments, see Notes 21 and 23 to our audited consolidated financial statements included elsewhere in this annual report.

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G. Safe Harbor.

See the discussion under “Special Note Regarding Forward-looking Statements.”

Item 6. Directors, Senior Management and Employees.

A. Directors and Senior Management.

The following table provides information about our Directors and Corporate Auditors as of the date of this annual report:

Name	Position	Date of birth	Month in which current term expires	Number of Nidec shares owned as of March 31, 2012		Percentage of common stock outstanding as of March 31, 2012
				(in thousands)
Shigenobu Nagamori	Representative Director, President and Chief Executive Officer	August 28, 1944	June 2013		20,142		14.72	%
Hiroshi Kobe	Representative Director, Executive Vice President and Chief Operating Officer	March 28, 1949	June 2013		236		*
Kenji Sawamura	Member of the Board, Executive Vice President	February 15, 1942	June 2013		8		*
Akira Sato	Member of the Board First Senior Vice President	November 2, 1954	June 2013		0		*
Tadaaki Hamada	Member of the Board, First Senior Vice President	August 14, 1948	June 2013		3		*
Masuo Yoshimatsu	Member of the Board, Senior Vice President and Chief Financial Officer	April 28, 1958	June 2013		3		*
Toshihiko Miyabe	Member of the Board Senior Vice President	June 16, 1958	June 2013		4		*
Shozo Wakabayashi	Member of the Board	November 23, 1943	June 2013		—		*
Noriko Ishida	Member of the Board	August 30, 1948	June 2013		—		*
Ryuichi Tanabe	Corporate Auditor	March 9, 1948	June 2015		0		*
Osamu Narumiya	Corporate Auditor	August 6, 1951	June 2015		1		*
Kazuya Murakami	Corporate Auditor	January 18, 1955	June 2016		—		*

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Name	Position	Date of birth	Month in which current term expires	Number of Nidec shares owned as of March 31, 2012		Percentage of common stock outstanding as of March 31, 2012
				(in thousands)
Chihiro Suematsu	Corporate Auditor	January 29, 1956	June 2014		—		*
Kiichiro Kobayashi	Corporate Auditor	November 29, 1957	June 2014		—		*

Notes:

(1) “—” represents no beneficial ownership in any Nidec shares.

(2) The asterisk represents beneficial ownership of less than 1%.

Shigenobu Nagamori, who founded Nidec Corporation in July 1973, has since been serving as the Company’s Representative Director, President and Chief Executive Officer (CEO). Mr. Nagamori is currently serving as Director and Chairman of Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec Tosok Corporation, Nidec Copal Electronics Corporation, Nidec-Read Corporation, and Nidec Motor Corporation, and as Representative Director and Chairman of Nidec Motor Holdings Corporation, Nidec-Shimpo Corporation, Nidec Seimitsu Corporation, and Nidec Nissin Corporation.

Hiroshi Kobe has since June 2006 served, and was most recently reappointed in June 2012 to serve, as Representative Director, Executive Vice President, and Chief Operating Officer (COO). Mr. Kobe joined Nidec Corporation in July 1973, and became a Member of the Board of Directors in November 1984, a Member of the Board and Managing Director in November 1991, a Member of the Board and Senior Managing Director in April 1996, a Member of the Board and Executive Vice President in April 2000, COO in April 2005, and Representative Director, Executive Vice President and COO in June 2006. Mr. Kobe is currently serving as Representative Director and Chairman of Nidec Logistics Corporation and Nidec Global Service Corporation.

Kenji Sawamura has since June 2006 served, and was most recently reappointed in June 2012 to serve, as a Member of the Board of Directors and Executive Vice President. Mr. Sawamura joined Nidec Corporation as Executive Director in October 1998, and became a Member of the Board in June 2000, a Member of the Board and Senior Managing Director in April 2002, and a Member of the Board and Executive Vice President in June 2006. Mr. Sawamura is currently Executive Advisor to President, supervises Corporate Strategy Office, and is serving as Director and Chairman of Nidec India Private Limited, Nidec (H.K.) Co., Ltd., and Nidec Servo Corporation. Mr. Sawamura was a Member of the Board and Managing Director in his previous employment at Nissan Motor Co., Ltd.

Akira Sato, who was appointed to serve as a Member of the Board and First Senior Vice President of Nidec Corporation in June 2012, joined Nidec as First Senior Vice President in January 2012. Mr. Sato currently supervises CFO Strategy Office, Public Relations, Advertising & Investor Relations Dept., Affiliates Administration Dept., Accounting Dept., Global Tax Planning Dept., Finance Dept., Corporate Administration & Internal Audit Dept., Compliance Office, Legal Dept., and CSR Promotion Office. Mr. Sato was Executive Officer in his previous employment at Nissan Motor Co., Ltd.

Tadaaki Hamada has since June 2009 served, and was most recently reappointed in June 2012 to serve, as a Member of the Board and First Senior Vice President. Mr. Hamada, originally from The Mitsubishi Bank, Ltd. (currently, The Bank of Tokyo-Mitsubishi UFJ, Ltd.) which he joined in April 1971, joined Nidec Corporation as Executive Director in February 2000, and became a Member of the Board in June 2004, Managing Director in April 2005, and a Member of the Board and Senior Vice President in June 2008. Mr. Hamada currently supervises Human Resources Dept., Corporate Planning Dept., Intellectual Property Dept, International Business Administration Dept., Strategic Technology and Business Planning Dept., and Nidec Research and Development Center, Japan, and is serving as Chairman of Trade Control Committee for Security.

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Masuo Yoshimatsu has since June 2009 served, and was most recently reappointed in June 2012 to serve, as a Member of the Board, Senior Vice President and Chief Financial Officer (CFO). Mr. Yoshimatsu joined Nidec Corporation as Executive Consultant in January 2008, and became a Member of the Board and Vice President in June 2008. Mr. Yoshimatsu currently supervises CFO Strategy Office, Public Relations, Advertising & Investor Relations Dept., Accounting Dept., Global Tax Planning Dept., and Finance Dept., and serves as General Manager of CFO Strategy Office. He also serves as Director and Chairman of Nidec Management Shanghai Corporation. Mr. Yoshimatsu was a Member of the Board and General Manager of Finance and Accounting Division in his previous employment at SS Pharmaceutical Co., Ltd.

Toshihiko Miyabe, who was appointed to serve as a Member of the Board and Senior Vice President of Nidec Corporation in June 2012, joined Nidec Corporation in April 1983. He currently serves as President of FDBM Business Unit and General Manager of the Unit’s Production Division, and Director and Chairman of Nidec Electronics (Thailand) Co., Ltd., Nidec (Zhejiang) Corporation, Nidec Philippines Corporation, and Nidec Subic Philippines Corporation.

Shozo Wakabayashi has since June 2010 served, and was most recently reappointed in June 2012 to serve, as an Outside Member of the Board of Directors. Mr. Wakabayashi joined Ministry of Finance of Japan in April 1967, was appointed to serve as Chief of the Osaka Regional Taxation Bureau in July 1994, Secretary-General of the Securities and Exchange Surveillance Commission in July 1996, Administrative Vice-Minister of Okinawa Development Agency in June 1998, and Senior Managing Director of Japan Securities Dealers Association in July 2001. Mr. Wakabayashi currently serves as Representative Director and Chairman of Japan Earthquake Reinsurance Co., Ltd.

Noriko Ishida was appointed to serve as an Outside Member of the Board of Directors in June 2012. Ms. Ishida became Osaka Bar Association’s registered attorney in April 1976, Deputy Chairperson of the Association in April 2001, an Executive Board Member of Japan Federation of Bar Associations in April 2010, and Refugee Examination Counselor in May 2010. Ms. Ishida serves as President of Ishida Law Firm (currently Lion Bashi Law Firm) and Chairperson of Osaka City Human Rights Promotion Council.

Ryuichi Tanabe was appointed to serve as an Outside Corporate Auditor in June 2011. Mr. Tanabe joined Ministry of Foreign Affairs of Japan in April 1970. He was appointed to serve as Director of Overseas Public Relations of Information Bureau in May 1986, and became Counselor of the Japanese Embassy in Germany in July 1988, Minister of the Japanese Embassy in Saudi Arabia in October 1990, Minister of the Japanese Embassy in Austria in August 1992, Consul-General in Munich, Germany in August 1994, Minister of the Japanese Embassy in India in July 1997, Director-General for International Affairs of the Tokyo Metropolitan Government in July 1999, Ambassador Extraordinary and Plenipotentiary of Japan to Serbia and Montenegro in April 2003, Ambassador Extraordinary and Plenipotentiary of Japan in charge of Afghanistan Assistance Coordination in September 2005, Ambassador Extraordinary and Plenipotentiary of Japan to Poland in September 2006, Ambassador Extraordinary and Plenipotentiary for Kansai Region in September 2009, and Representative of the Government of Japan in June 2010.

Osamu Narumiya was appointed to serve as a Corporate Auditor in June 2011. Mr. Narumiya joined the Ministry of International Trade and Industry (currently, Ministry of Economy, Trade and Industry) of Japan in April 1976. He was appointed to serve as First Secretary at the Embassy of Japan in Singapore in April 1987, and became Director of the Information Management Division at Minister’s Secretariat in May 1995, Deputy Director-General (responsible for bilateral cooperation) at the Minister’s Secretariat in July 2002, Director of the Japan Bicycle Racing Association in September 2003, and Senior Managing Director of the National Federation of Small Business Associations in June 2004. Mr. Narumiya joined Nidec Corporation as Executive Consultant in June 2007 and became a Member of the Board in the same month. Mr. Narumiya served as Vice President of Nidec Corporation from June 2008 to June 2011.

Kazuya Murakami was appointed to serve as an Outside Corporate Auditor in June 2012. Mr. Murakami joined Ministry of Finance of Japan in April 1977, and served as Chief of Nagoya Regional Taxation Bureau’s Ise Tax Office, Executive Director to International Monetary Fund (IMF) in July1984, Director of Central Asian Bureau of European Bank for Reconstruction and

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Development (EBRD) in June 1996, Director of Fukuoka Local Finance Branch Bureau of Ministry of Finance of Japan in July 2002, Counselor of the Minister’s Secretariat (Custom & Tariff Bureau) in July 2004, Director of EBRD in July 2005, Director of Kanto Local Finance Bureau of Ministry of Finance of Japan in July 2008, and Director of Organization for Small & Medium Enterprises and Regional Innovation, JAPAN, which is an independent administrative agency under Ministry of Economy, Trade and Industry of Japan, in August 2009.

Chihiro Suematsu was appointed to serve as an Outside Corporate Auditor in June 2010. Mr. Suematsu joined McKinsey and Company in November 1985, was appointed to serve as Representative Director and President of Advanced Consulting Network, Inc. in November 1988, and became an assistant professor at Kyoto University Graduate School of Economics in April 2001. Mr. Suematsu currently serves as a professor at Kyoto University Graduate School of Management (Doctor of Economics) and Graduate School of Economics (Doctor of Economics), and an Outside Member of the Board of Directors of Zero-Sum, Ltd.

Kiichiro Kobayashi was appointed to serve as an Outside Corporate Auditor in June 2010. Mr. Kobayashi joined Mitsukoshi, Ltd. in April 1980, became a Senior Researcher at the Mitsubishi Research Institute, Inc. in March 1989, and completed his doctoral program at Keio University Graduate School of Business Administration (Ph.D.) in September 1996. Mr. Kobayashi then became a Visiting Scholar at Harvard Business School in April 1997, a Full-time Lecturer at Keio University Graduate School of Business Administration in April 1998, an assistant professor at the same school in April 2000, and an Outside Member of the Board of Directors of NEC Fielding, Ltd. in June 2010. Currently, Mr. Kobayashi teaches at Keio University as a professor.

Our Board of Directors has the ultimate responsibility for the administration of our affairs. Our Articles of Incorporation provide for not more than twenty Directors. Directors are elected at a general meeting of shareholders, and the normal term of office of Directors is one year, although they may serve any number of consecutive terms. The Board of Directors elects one or more Representative Directors, who have the authority individually to represent us. The Board of Directors may also elect one Chairman of the Board of Directors, one President, one or more Executive Vice Presidents, First Senior Vice Presidents, Senior Vice Presidents and Vice Presidents. Shigenobu Nagamori is the Representative Director, President and Chief Executive Officer. Hiroshi Kobe is the Representative Director, Executive Vice President and Chief Operating Officer, and Masuo Yoshimatsu is a Member of the Board, Senior Vice President and Chief Financial Officer. Our Executive Officers serve at the discretion of the Board of Directors.

Our Articles of Incorporation provide for not more than five Corporate Auditors. Currently, we have five Corporate Auditors: Ryuichi Tanabe, Osamu Narumiya, Kazuya Murakami, Chihiro Suematsu and Kiichiro Kobayashi. The Corporate Auditors may not at the same time be directors, officers or employees of us or any of our subsidiaries, and at least one-half of them must be a person who has never been a director, officer or employee of us or any of our subsidiaries at any time prior to their election as a Corporate Auditor. Corporate Auditors are elected at a general meeting of shareholders, and the normal term of office of a Corporate Auditor is four years, although they may serve any number of consecutive terms.

Three of our Corporate Auditors, Ryuichi Tanabe, Osamu Narumiya, and Kazuya Murakami are full-time Corporate Auditors. Except Osamu Narumiya, all of our Corporate Auditors are from outside the Nidec group. Our five Corporate Auditors form our Board of Corporate Auditors. Corporate Auditors are under a statutory duty to review the administration of our affairs by the Directors, to examine our financial statements and business reports to be submitted by the Board of Directors to the general meetings of shareholders and to report their opinions thereon to the shareholders. They are required to attend meetings of the Board of Directors and are entitled to express their opinions, but they are not entitled to vote. Corporate Auditors also have a statutory duty to provide their report to the Board of Corporate Auditors, which must submit its auditing report to the Representative Directors. The Board of Corporate Auditors also determines matters relating to the duties of the Corporate Auditors, such as auditors’ policy and methods of investigation of our affairs.

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In addition to Corporate Auditors, we must appoint independent certified public accountants, who have the statutory duties to examine the financial statements to be submitted by the Board of Directors to the annual general meetings of shareholders, report on the financial statements to the Board of Corporate Auditors and the Representative Directors, and examine the financial statements to be filed with the Minister of Finance of Japan.

No family relationship exists among any of our directors and corporate auditors. None of our directors or corporate auditors is party to a service contract with us that provides for benefits upon termination of employment.

B. Compensation.

The aggregate compensation paid, including bonuses and benefits in kind granted, but excluding retirement allowances paid, to our Directors and Corporate Auditors by Nidec Corporation during the fiscal year ended March 31, 2012 was ¥332 million. Of this amount, an aggregate of ¥276 million was paid to our Directors (excluding our outside Directors), an aggregate of ¥15 million to our Corporate Auditors (excluding our outside Corporate Auditors), and an aggregate of ¥41 million to our outside Directors and outside Corporate Auditors. None of our Directors and Corporate Auditors were paid any compensation for their respective services in any capacities to our subsidiaries.

Under the applicable Japanese disclosure rules, we are required to disclose the amount of compensation paid by us and our subsidiaries to a Director or Corporate Auditor on an individual basis if the amount is ¥100 million or more during a fiscal year. For the fiscal year ended March 31, 2012, none of our Directors or Corporate Auditors received compensation equal to or exceeding ¥100 million.

On a group-wide basis, the aggregate compensation paid, including bonuses and benefits in kind granted, but excluding retirement allowances paid, to our Directors and Corporate Auditors by Nidec Corporation and to the directors and corporate auditors of our subsidiaries by such subsidiaries during the fiscal year ended March 31, 2012 was ¥2,267 million.

In accordance with customary Japanese business practices, a retiring director or corporate auditor receives a lump-sum retirement allowance, which is subject to the approval of the general meeting of shareholders. In the fiscal year ended March 31, 2012, no such retirement allowance was paid to our Directors or Corporate Auditors. Separately, an aggregate ¥7 million in retirement allowances was paid by our subsidiaries to their respective retiring directors and corporate auditors, none of whom are Directors or Corporate Auditors of Nidec Corporation.

C. Board Practices.

The information required by this item is set forth in “—A. Directors and Senior Management.”

D. Employees.

The following table shows the number of our employees as of the dates indicated:

	As of March 31,
	2010		2011		2012
Japan		8,758		8,730		10,470
North and South America		853		6,954		7,305
Asia and Oceania		84,870		88,219		87,947
Europe		2,001		1,970		1,767
Total		96,482		105,873		107,489

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Note: The total number of our employees increased 9,391 as of March 31, 2011 compared to March 31, 2010 mainly due to our acquisition of Emerson Electric Co’s motors and controls business.

Japan

In Japan, as of March 31, 2012, we had 10,470 employees. Of these employees, 5,245 employees were engaged in manufacturing operations, 2,091 in research and development and 988 in sales activities.

Most of our employees receive compensation on the basis of fixed annual salaries and twice-a-year bonuses. In addition, we have a separate bonus system to reward employees who make significant technological contributions to our operations as reflected primarily by patent registrations. We emphasize and reward individual skills and performance. We have started to incorporate performance-linked elements into our domestic compensation and promotion systems to make us more competitive in Japan in recruiting and retaining highly-skilled individuals. Under our retirement allowance system, eligible employees are entitled to a lump-sum allowance and a retirement annuity upon their retirement.

In Japan, although Nidec Corporation has no labor union, labor unions have been organized in some of its subsidiaries. There have been no material strikes or labor disputes. We believe that the relationship between us and our employees is favorable.

Overseas

As of March 31, 2012, we had 97,019 employees overseas. Of these employees, 86,083 employees were engaged in manufacturing operations, 1,062 in research and development and 1,024 in sales activities.

No material strikes or labor disputes have occurred overseas and we believe that the relationship between us and our employees is fav