NS Tool : Business Report for the Fiscal Year Ended March31.2023(English)

Fiscal Year Ended March 31, 2023

(April 1, 2022 to March 31, 2023)

Business Report

Brand Statement

The honor of supporting Japan's monozukuri (manufacturing) -the art of manufacturing and craftsmanship-has always been at the root of our company.

As a leading manufacturer of small-diameter carbide end mills, we strive to create valuable products that cater to the needs of our customers and the society.

We will introduce innovative solutions by continuously pushing

the limits of our own technical standards, and present pioneering skills, quality and services to the future, and to the world.

NS TOOL will continue to explore the infinite possibilities and dreams in monozukuri.

Management Philosophy

NS TOOL creates

"Software (technology)," "Hardware (machine)" and "Heart (humanity)."

We contribute to society by developing eco- and human-friendly products.

SOFTWARE

Technology

MachineHumanity

HARDWARE HEART

Contents

1. .... Major Milestones of NS TOOL Group

1. .... NS TOOL Group Network

1. .... Value Creation Process of NS TOOL Group

9 .... "Creating New"

―End Mills that Contribute to Society's Development―

11 .... Top Message

15 .... From Business Sites

1. .... From Manufacturing Site (1)

1. .... Technical Chronology

18 .... From Manufacturing Site (2)

22 .... From Manufacturing Site (3) "Ishikawa-trainingschool"

25 .... From Manufacturing Site (4) CSP Training

1. .... From Manufacturing Site (5) Training by Female Lecturers
2. .... From Sales Site (1) "JIMTOF2022"
3. .... From Sales Site (2) Initiatives of International Sales Department

31 .... Voices from NS TOOL Users

1. .... Financial and Non-Financial Highlights

1. .... Financial Analysis

1. .... Corporate Governance

37 .... Profile of Management Team

39 .... Corporate Governance Structure

1. .... Business and Other Risks
2. .... Round-table Talk: Effectiveness of Board of Directors

1. .... ESG Topics

1. .... Topics
2. .... Corporate Data/Stock Information

Disclaimer

Notes regarding the Company's estimates

This report contains forward looking estimates including plans, strategies, financial performance and other statements. These estimates are based on the determination derived from the information that can be obtained currently. Please note that the actual results are supposed to be affected by various types of risks and uncertainties and, as a result, can be largely differ from these estimates.

1

2

Net sales (¥ million)

12,000

10,000

8,000

6,000

4,000

2,000

0

Major Milestones of NS TOOL Group	"monozukuri" means manufacturing in Japanese.
	*Fiscal year ended at the end of March of each year (end of August until 2001)	Ordinary prot
■ Net sales ■ Ordinary prot	*Fiscal year 2002 has seven months, but the results are converted into the equivalent of 12 months.	(¥ million)

																										3,000
	In 2016, NS TOOL CO., LTD. took a new step forward under the brand statement of "For Crafting Tomorrow." Since our
	establishment in 1954, we have grown side by side with Japan's monozukuri. The new brand statement reflects our pride
	of tireless support on nation's development, and our unwavering commitment to create innovations in small-diameter																							2,500
	cemented carbide end mills and to explore the future of "Made in Japan" together with our users.
	NS TOOL's users are engaged in the development and manufacturing of various products and parts days and nights in the
	cutting-edge field of precision and micro machining, where even the slightest measurement error can compromise the																							2,000
	entire quality. The ultra-downsizing in the electronics world has led to micro-miniaturization,high-level integration, and
	thinning of electronic parts and devices. As a result, technological requirements at monozukuri sites are far greater than
	ever before.
	As a company specializing in small-diameter cemented carbide end mills, NS TOOL constantly improving precision and																							1,500
	durability to meet users' needs and expectations, as well as enhancing our own technological standards to create
	cutting-edge technologies and products.
																										1,000
																										500
																										0
	Oil crisis	Collapse of bubble economy						Global Financial Crisis		Great East Japan Earthquake
																										-500
1954	1972	1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018 2019	2020	2021	2022	2023

History of NS TOOL

1954

1977

1990

1999

2004

2011

2017

Establishes Nisshin Kogu	Starts exporting products	Establishes a consolidated
Seisakusho.	(to Taiwan).	subsidiary G-Tech Co., Ltd.

1961		1979		1991
Establishes Nisshin Kogu	Changes the organization	Changes the trade name to
Seisakusho L.C. in	to Nisshin Kogu Seisakusho	NS TOOL Co., Ltd.
Shinagawa-ku, Tokyo.	Co., Ltd.
				1994
				Declares specialization in
				small-diameter end mills.
History of development, production, and sales activities

Invests in Sato Tool, Ltd.

(Niigata Nisshin Co., Ltd.).

2001

Acquires ISO9001 certification.

2002

Makes G-Tech Co., Ltd. and

Sato Tool, Ltd. (Niigata Nisshin Co., Ltd.) wholly-owned subsidiaries.

Acquires ISO14001 certification. Lists on the JASDAQ Stock Exchange.

2009

Establishes NS Engineering Co., Ltd.

Makes Makino Industry Co., Ltd. a wholly-owned subsidiary.

2013

Establishes NS TOOL Hong Kong Ltd.

2016

Reforms the corporate identity.

NS Engineering Co., Ltd. takes over Niigata Nisshin Co., Ltd.

After switching to the Second Section of the Tokyo Stock Exchange, NS TOOL was designated as a First Section stock.

2018

Relocates Headquarters and Tokyo Office.

2021

Establishes NS TOOL USA, INC.

2022

Transitions to the Prime Market of the Tokyo Stock Exchange.

1972

1980

1993

1998

2006

2009

2016

Launches the original "Power End Mill" with helix angle of 50 degrees.

Makes a full-scale entry into the mold market with a cemented carbide solid end mill.

1989

Constructs new Fujisawa Factory and establishes operation of three-production sites.

Completes the first stage of construction of Sendai Factory.

1994

Completes the second stage of construction of Sendai Factory.

Introduces a CNC grinding machine made by Rollomatic SA (Switzerland) for the first time in Japan.

Completes the third stage of construction of Sendai Factory.

Consolidates Production Division and Development Division into Sendai Factory.

2001

Establishes R&D Center on the premises next to Sendai Factory.

2003

Launches a project to develop an original Tool Grinding Machine "TGM."

Launches CBN end mills.

Holds the first NS Private Show.

Completes the first Tool Grinding Machine "TGM" developed by NS TOOL.

Completes the fourth stage of construction of Sendai Factory.

2008

Holds the second NS Private Show.

Establishes a new Manufacturing Center.

2011

Sendai Factory recovers from Great East Japan Earthquake in one month.

Completes the fifth stage of construction of Sendai Factory.

2020

Holds the third	Establishes R&D Center with
"NS TOOL Private Show	All-round Isolation System
2020."	structure.

Opens Sendai inventory center.

NS Engineering Co., Ltd. starts manufacturing small-diameter end mills at its Niigata Factory.

3

4

NS TOOL Group Network

NS TOOL CO., LTD.			NS TOOL CO., LTD.
a Headquarters		b
	Sendai Factory and R&D Center
and Tokyo Office

h

		NS Engineering Co., Ltd.
		Headquarters
		and Main Factory	Sendai Factory
			and R&D Center
			b
Headquarters and Tokyo Office	Sendai factory	i	c
6F. Sumitomo Fudosan
R&D center
Oimachi Ekimae Bldg., 1-28-1, Oi,	NS Engineering Co., Ltd.
Shinagawa-ku, Tokyo 140-0014		Sendai Office
2-11 Matsusakadaira, Taiwa-cho,	Niigata Factory
TEL: [phone]	Kurokawa-gun, Miyagi 981-3408	2-7-2 Matsusakadaira,
FAX: [phone]
TEL: [phone]		Taiwa-cho,
URL: https://www.ns-tool.com/en
FAX: [phone]		Kurokawa-gun,
Business lines	Business lines		Miyagi 981-3408
	TEL: [phone]
Sale of cutting tools, inventory center	Development and manufacture of		FAX: [phone]
	cutting tools, inventory centers

j

Makino Industry Co., Ltd.

g

a

Fukuoka Office

f

e

d

Headquarters

and Tokyo Office

8F. Sankyo Fukuoka Bldg., 2-9-11,

Hakataekiminami, Hakata-ku,

Osaka Office

Nagoya Office

Nagano Office

Fukuoka-shi, Fukuoka 812-0016

2F. Soryu Bldg.,

12F. Nagoya KS Bldg.,

7F. Matsumoto Chuo Bldg.,

TEL: [phone]

2-9-3 Shinmachi, Nishi-ku,

3-1-18, Taiko, Nakamura-ku,

1-17-16, Chuo, Matsumoto-shi,

FAX: [phone]

Osaka-shi, Osaka 550-0013

Nagoya-shi, Aichi 453-0801

Nagano 390-0811

TEL: [phone]

TEL: [phone]

TEL: [phone]

FAX: [phone]

FAX: [phone]

FAX: [phone]

h

NS Engineering Co., Ltd.

i

NS Engineering Co., Ltd.

j

Makino Industry Co., Ltd.

Headquarters and Main Factory

Niigata Factory

Headquarters and main factory	Niigata factory	Headquarters and main factory
2-7-2 Matsusakadaira, Taiwa-cho,Kurokawa-gun,	252, Yoshida, Uonuma-shi, Niigata 946-0075	103-1 Tsurukoyama, Shirasaka, Shirakawa-shi,
Miyagi 981-3408	TEL: [phone]	Fukushima 961-0835
TEL: [phone] FAX: [phone]	FAX: [phone]	TEL: [phone] FAX: [phone]
URL: https://www.ns-eg.com		URL: https://makino-kg.co.jp
Business lines	Business lines	Business lines
Coating processing and re-grinding of cutting tools	Manufacture of cutting tools	Developing, manufacturing and sale of plastic
		molded products, mainly tool cases

	NS TOOL Hong Kong Ltd.
	Suzhou Office
	Rm 2107, Phoenix International Apartment,
NS TOOL Hong Kong Ltd.	80 Xingdu Street, Industrial Park,
Suzhou, Jiangsu
Shenzhen Representative Office	TEL: [phone]

Rm 1221, Kerry Center, 2008

Renminnan Road, Luohu District,	m	NS TOOL USA, INC.
Shenzhen, Guangdong		n
TEL: [phone]
FAX: [phone]

l

k

NS TOOL Hong Kong Ltd.

k NS TOOL Hong Kong Ltd.		n NS TOOL USA, INC.

Headquarters	Headquarters
Suite 1001-02, 10th Floor, Kowloon Centre,	2265 Star Ct., Building #3, Rochester Hills, Michigan 48309
33 Ashley Road, Tsim Sha Tsui, Kowloon, Hong Kong	TEL: [phone]
TEL: [phone] FAX: [phone]	URL: https://us.ns-tool.com/en
URL: https://www.ns-tool.com.cn
Business lines	Business lines
Sale of cutting tools, inventory center	Sale of cutting tools, inventory center

5

6

Value Creation Process of NS TOOL Group

- Unlock the dreams and possibilities of monozukuri -

In order to support the precision and micro machining technologies essential for manufacturing electronic and precision parts, which Japan's monozukuri is best at, our Group challenges technologies, quality and services beyond other companies' reach and has been restlessly working to create new added values.

As a group specializing in small-diameter tools, we boast the top share in Japan in the field of small-diameter cemented carbide end mills, and maintain high profit margin and a thorough debt-free management.

NS TOOL Group (Fiscal year ended March 31, 2023)	Proposal-based sales and
engineering support based
	on skills and experience

Specialist of small-diameter end mills	Sales
Net sales	¥9.6 billion
	(Ratio of small-diameter: 77.5%)
Operating profit	¥2.1 billion
Profit attributable to owners of parent	¥1.4 billion
Solid financial base		Scenes from exhibition
Total assets	¥18.8 billion
Shareholders' equity	¥16.9 billion
Equity ratio	90.1 %	CBN
Series
	¥8.4 billion
Cash and deposits

Elite specialists of small-diameter end mills

Employees	352
	Of which, 33 development personnel
Abundant and excellent products
Material × Type × Coating = Approx. 10,000 types
Intellectual property owned
Acquired patents, etc.	55	End mills seminars
Awards received
Ministry of Economy, Trade and Industry
Global Niche Top Companies Selection 100 2020
Monozukuri Japan Conference, The Nikkan Kogyo Shimbun, Ltd.
"Super" Monozukuri Parts Award: 2011 2012 2014 2015 2016 2019 2020 2021 2022	Blade diameter
Received 9 times		measuring
	equipment
News Digest Publishing Co., Ltd.	for confirming
stable quality
ND Marketing Awards	2014

"monozukuri" means manufacturing in Japanese.

Resources for creating added values

R&D Center

(All-round Isolation System)

Micro Edge

Series

Hair processed with our product "Micro Edge"

	Long Neck	Development system
	Series
Parts processing	Mold machining	specialized in
high-precision and
Examples of	Our users	micro machining
Examples of	Development meetings
parts	molds
		Development

PCD Series

Factory building considering	Introduction of owned media
safety, environmental,
and disaster measures

Ministry of Economy, Trade and Industry, etc. Monozukuri Japan Award: Received twice 20052013

Japan Cutting & Wear-resistant Tool Association

Environmental Special Award 2022

Flexible and efficient production system centered on in-house developed grinding machine "TGM"*

Production

In-house developed machinery	Inspection process
"TGM"* achieving both stable
quality and high productivity

7

*TGM: Tool Grinding Machine

8