20-F/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No.1)

o 

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(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, 2008

OR

o 

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

OR

o 

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, General Manager of Investor Relations

Telephone; +81-75-935-6140 , e-mail: ir@jp.nidec.com

Address: 338 Kuzetonoshiro-cho, Minami-ku, Kyoto 601-8205, Japan

(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*	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,  2008, 144,939,997 shares of common stock were outstanding, including 3,253,184 shares represented by 13,012,736 American Depositary Shares .

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 o

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 o   No x

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 o

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  o    Non-accelerated filer  o

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  o     Other  o  

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  o   Item 18o

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

*

Not for trading, but only in connection with the listing of the American Depositary Shares, each representing one-fourth of one share of Common Stock.

Explanatory Note

This Amendment No. 1 to Form 20-F (the "Form 20-F/A") amends our annual report for the fiscal year ended March 31, 2008, originally filed with the Securities and Exchange Commission ("SEC") on September 22, 2008 (the "Form 20-F"). The Form 20-F/A corrects the Commission file number on the cover page of the Form 20-F/A, corrects the last paragraph of Item 16E, updates Note 26 to our consolidated financial statements and includes amended and currently dated signature page and certifications under Section 302 of the Sarbanes-Oxley Act of 2002, which, as originally filed, omitted a paragraph required by Item 601 of Regulation S-K.

This Form 20-F/A continues to speak as of the date of the Form 20-F and no attempt has been made in this Form 20-F/A to modify or update disclosures in the original Form 20-F except as noted above. This Form 20-F/A does not reflect events occurring after the filing of the Form 20-F or modify or update any related disclosures and information not affected by the amendment is unchanged and reflects the disclosure made at the time of the filing of the Form 20-F with the SEC except as noted above. In particular, any forward-looking statements included in this Form 20-F/A represent management's view as of the filing date of the Form 20-F. Accordingly, this Form 20-F/A should be read in conjunction with any documents incorporated by reference therein and our filings made with the SEC to the filing of the Form 20-F, including any amendments to those filings.

	TABLE OF CONTENTS
		Page
PART I
Item  1.	Identity of Directors, Senior Management and Advisers.	4
Item  2.	Offer Statistics and Expected Timetable.	4
Item  3.	Key Information.	5
Item  4.	Information on the Company.	18
Item  4A.	Unresolved Staff Comments	37
Item  5.	Operating and Financial Review and Prospects.	38
Item  6.	Directors, Senior Management and Employees.	70
Item  7.	Major Shareholders and Related Party Transactions	77
Item  8.	Financial Information	78
Item  9.	The Offer and Listing.	80
Item 10.	Additional Information.	82
Item 11.	Quantitative and Qualitative Disclosures About Market Risk.	98
Item 12.	Description of Securities Other Than Equity Securities.	101
PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies.	101
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds.	101
Item 15.	Controls and Procedures.	102
Item 16A.	Audit Committee Financial Expert.	103
Item 16B.	Code of Ethics.	103
Item 16C.	Principal Accountant Fees and Services.	103
Item 16D.	Exemptions from the Listing Standards for Audit Committees.	104
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchases	106
PART III
Item 17.	Financial Statements	106
Item 18.	Financial Statements	106
Item 19.	Exhibits.	107
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, and “yen” or “¥” means the lawful currency of Japan.

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.

3

PART I

Item 1.

Identity of Directors, Senior Management and Advisers.

Not applicable.

Item 2.

Offer Statistics and Expected Timetable.

Not applicable.

4

Item 3. Key Information.

A. Selected Financial Data.

The following table includes selected historical financial data for the years ended March 31, 2004 through 2008 derived from our 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 in this annual report.

Selected Financial Data

	Year ended March 31,
	2004	2005	2006	2007	2008	2008
	(Yen in millions and U.S. dollars in thousands, except number of shares outstanding and per share amounts)
Income statement data:
Net sales	¥ 277,497	¥ 485,861	¥ 536,858	¥ 629,667	¥ 742,126	$ 7,407,186
Cost of products sold	218,189	370,938	413,012	486,627	583,910	5,828,027
Selling, general and administrative expenses	28,542	35,340	41,188	46,276	51,283	511,857
Operating income	22,015	53,665	53,426	64,009	76,833	766,873
Income before income taxes	19,639	57,290	64,378	65,595	62,683	625,641
Net income	16,089	33,455	40,949	39,932	41,156	410,780
Balance sheet data (period end):
Total assets	¥ 443,886	¥ 484,173	¥ 565,970	¥ 662,623	¥ 671,714	$ 6,704,402
Short-term borrowings	86,636	28,478	43,621	78,848	68,854	687,234
Current portion of long-term debt	2,653	8,493	4,647	3,216	29,196	291,406
Long-term debt	45,025	37,833	32,134	31,560	3,430	34,235
Total shareholders’ equity	110,046	207,040	263,659	305,016	319,584	3,189,779
Common stock	28,995	61,180	65,649	65,868	66,248	661,224
Number of shares outstanding (1)	130,035,796	142,504,926	144,661,292	144,780,492	144,987,492	144,987,492
Per share data:
Net income per share-basic (1)	¥ 125.57	¥ 239.87	¥ 285.47	¥ 276.03	¥ 284.00	$ 2.83
Net income per share-diluted (1)	120.76	228.29	275.05	268.25	276.29	2.76
Cash dividends paid per share	15.00	17.50	25.00	40.00	50.00	0.50

Notes:

(1) Calculated using the average number of shares outstanding for the period (excluding shares held by Nidec). Number of shares outstanding and all per share amounts have been restated to reflect the retroactive effect of the 2 for 1 stock split that took effect on November 18, 2005.

More detailed information regarding diluted shares outstanding is included in Note 20 in our consolidated financial statements included in this annual report.

We increased our share in Nidec Copal Corporation and Nidec Copal Electronics Corporation to over 50% each in January and February 2004, and they became our consolidated subsidiaries. Their results of operations are reflected in our financial statements for the year ended March 31, 2005 from the time of their consolidation.

We acquired an approximately 40% share in Nidec Sankyo Corporation in October 2003 and increased our share to over 50% in February 2004. As a result, the results of operations of this subsidiary are included in our consolidated results of operations from February 2004.

5

Our increase in net sales was mainly due to the impact of the newly consolidated companies during the period. The net sales of Fujisoku Corporation, which has been consolidated since November 2006, Nidec Motors & Actuators and its group companies, which have been consolidated since December 2006, Brilliant Manufacturing Limited and its subsidiaries, which have been consolidated since February 2007 and Japan Servo Co., Ltd. and its subsidiaries, which have been consolidated since April 2007, have contributed to the increase.

Fluctuations in exchange rates between the Japanese yen and 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. We have translated some Japanese yen amounts presented in this annual report into U.S. dollars solely for your convenience. Unless otherwise noted, the rate used for the translations was ¥100.19 per $1.00, which was the approximate exchange rate in Japan on March 31, 2008. These translations do not imply that the yen amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars at these rates or at all.

		High	Low	Average	Period-end
Year ended March 31,
	2004	¥ 120.55	¥ 104.18	¥ 113.07	¥ 104.18
	2005	114.30	102.26	107.49	107.22
	2006	120.93	104.41	113.15	117.48
	2007	121.81	110.07	116.92	117.56
	2008	124.09	96.88	114.31	99.85
Calendar period
	March 2008	103.99	96.88	100.76	99.85
	April 2008	104.56	100.87	102.68	104.53
	May 2008	105.52	103.01	104.36	105.46
	June 2008	108.29	104.41	106.92	106.17
	July 2008	108.19	104.64	106.85	108.10
	August 2008	¥110.48	¥107.59	¥109.36	¥108.69

The above 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.

As of September 15, 2008, the noon buying rate was ¥105.67 per $1.00.

B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds.

Not applicable.

6

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, Seagate, were approximately 11%, 11% and 10% of total net sales for the years ended March 31, 2006, 2007 and 2008, respectively. Sales to our six largest customers represented approximately 34%, 37% and 36% of our net sales for the years ended March 31, 2006, 2007 and 2008, respectively, and the six customers also represented ¥37.0 billion, or 29%, ¥49.1 billion, or 33% and ¥47.6 billion, or 32% of our gross accounts receivable at March 31, 2006, 2007 and 2008, respectively. 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 by a competitor, or its own internally developed components, for inclusion in future product generations; 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.

We depend on the computer industry for sales of our products, and our business may be adversely affected by a decline in the computer market

Our precision motor and fan products are components used primarily in computer systems. A substantial portion of our net sales in turn depends on sales of computers and computer peripherals that incorporate our products. Revenues from hard disk drive spindle motors accounted for 30.7%, 31.5% and 30.1% of our net sales for the years ended March 31, 2006, 2007 and 2008, respectively. Although we have been diversifying our products and entering into new markets, such as motors for use in household 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;

•

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.

7

The downturn of computers and computer peripherals is generally characterized by lower product demand and accelerated reductions of product prices. These conditions prompted restructuring of operations by hardware manufacturers, including makers of hard disk drives, including our customers. Such restructurings involving our customers may result in our customers seeking to reduce costs and inventories, which could in turn reduce our margins or sales volumes. These customers may also switch to suppliers other than us. Such restructuring or similar moves by hard disk drive manufacturers in the future could have a material negative impact on our results of operations if we are unable to increase sales to other hard disk drive manufacturers or increase sales of spindle motors for non-desktop use.

The rate of decline in average selling price accelerates when, as is currently the case in the hard disk drive industry, competitors lower prices to absorb excess capacity, liquidate excess inventories, restructure or attempt to gain market share. During an industry downturn, manufacturers may abruptly stop purchasing additional inventory from suppliers such as us. And because many of our customers have adopted just-in-time inventory management processes, we often maintain up to more than two month’s inventory at or near the customer’s production facility, a practice which may force us to absorb excess inventories when growth slows. Our inventory was ¥64.3 billion at March 31, 2007 and ¥69.8 billion at March 31, 2008. Maintaining inventory increases our capital requirements and costs, complicates our inventory management strategies and makes it more difficult to match manufacturing plans with customer demand, thereby increasing the risk of inventory obsolescence and price erosion during periods of reduced demand, which could in turn have a material adverse effect on our business, financial condition and results of operations.

The hard disk drive industry is fast extending its reach into the realm of digital consumer electronics. The prospect of rapid expansion of the digital consumer electronics market is intensifying the competition between hard disk drive manufacturers and manufacturers of other data-storage alternatives such as semiconductor memory devices.

Excessive competition in the data-storage market, combined with the volatile nature of the digital consumer electronics market, could force hard disk drive manufacturers to exercise unexpectedly drastic production adjustments. Such event could reduce demand for our products, eventually affecting our business, financial condition and results of operations.

We are facing downward pricing pressure in our main product markets, and price declines could reduce our revenues and gross margins

We expect downward pricing pressure in our main product markets to continue. The hard disk drive industry, in particular, is characterized by rapidly declining average selling prices over the life of a product even for those products which are competitive and timely to-market. Our average selling price for hard disk drive spindle motors rose by approximately 4% during the year ended March 31, 2006, although it decreased by approximately 1% and 3% during the years ended March 31, 2007 and 2008, respectively. In general, the average selling price for a given product in the hard disk drive market decreases over time as increases in the supply of competitive products and cost reductions occur and as technological advancements are achieved. There is also intense price competition among hard disk drive manufacturers and, as a result, our principal customers pressure us to lower the prices of our spindle motors. Falling prices reduce ou r margins, cause operating results to suffer and may make it difficult for us to maintain profitability. If we are not able to achieve such cost reductions, develop new customized products or increase our unit sales volume, our business, financial condition and results of operations could be materially and adversely impacted.

8

If our third party suppliers experience capacity constraints or production failures, our production could be significantly harmed

We rely on third party suppliers for some of the materials and equipment used in our manufacturing processes, including connectors and electric circuit unit assemblies. Our production capacity would nevertheless be limited if one or more of these materials were to become unavailable or available in reduced quantities or if we were unable to find alternative suppliers. If our source of materials and supplies were unavailable for a significant period of time, our operating results would be adversely affected.

We face aggressive competition both in the spindle motor market 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

Our major competitors in the area of hard disk drive spindle motors have aimed to maintain or expand their market share in recent periods, which has resulted in intensified competition and a reduction in prices. This trend of severe competition is likely to intensify as our competitors offer very competitive prices in order to grab larger market shares. It is also possible that ball bearing or other subcomponent manufacturers will try to enter the spindle motor market. In the area of mid-size motors for automobiles and household appliances, some of our competitors have substantially greater financial, engineering, manufacturing, marketing, service and support resources than we do and may have substantially greater name recognition, manufacturing expertise and capability and longer standing customer relationships than we do.

To remain competitive in our core business area of spindle motors and to increase our competitiveness in other motor markets in which we are attempting to expand our business, we believe that we must maintain a substantial investment in research and development and expand our manufacturing capability, marketing, sales efforts and customer service and support. We must also develop new products and enhance our existing products in a timely manner. We may not compete successfully in all or some of our markets in the future, and we may not have sufficient resources to continue to make such investments. We may not make the technological advances necessary to maintain our competitive position so that our products will receive industry acceptance. We anticipate that we may have to adjust prices on many of our products to stay competitive, and our profit margins may fall. In addition, technological changes, manufacturing efficiencies or development efforts by our competitors may render our products or technologies obsolete or uncompetitive. Our failure to maintain our competitive position could have a material adverse effect on our business and results of operations.

We may be unable to commercialize customized products that satisfy customers’ needs in a timely manner and in sufficient quantities, which could damage our reputation and reduce sales

Many of our customers work directly with component suppliers such as us to design and build customized products for specific needs. A significant portion of our contracts with these customers 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 products, we may not be able to meet our customers’ product needs or timetables. Although we have not had such problems in the past, any future failure to meet significant customer requirements could damage our reputation and impede our ability to expand our business in markets for these products.

9

We could experience losses or damage to our reputation if any of the end-products in which our motors or other products are incorporated malfunction, causing damage to persons, property or data

Our small precision motors and other products are key components in many consumer electronics devices, particularly data storage devices such as hard disk drives. Widespread malfunction of such devices could lead to consumer dissatisfaction, recalls and, potentially, lawsuits. If such problems are caused by or attributed or alleged to be attributed to defects in our motors, we might be drawn into disputes with our customers, our reputation could be damaged and our results of operations might be adversely affected by lost sales or costs associated with recalls or defending ourselves against legal claims. We may suffer such losses or damage regardless of whether our products were defective.

Our operating results may fluctuate significantly because of a number of factors, many of which are beyond our control

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 following principal factors:

•

fluctuations in product demand as a result of the cyclical and seasonal nature of the industries in which our motor and drive technology 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 or customer mix;

•

entry of new competitors;

•

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

•

deferrals of customer orders in anticipation of new products or enhancements;

•

component and raw material costs and availability, particularly with respect to components obtained from sole or limited sources;

•

system failures, caused for example by power outages;

•

unexpected changes in the macro economy with adverse impacts on markets for our products or our customers’ products that incorporate our products; and

•

natural and man-made disasters, including earthquakes, warfare and acts of terrorism, in Japan or elsewhere.

Reductions in our unit sales will not typically correspond with reductions in these relatively fixed costs. Therefore, such reductions in our unit sales will generally result in reduced or negative margins for our products. Any or all of the above factors could have a material adverse effect on our business, financial condition and results of operations.

10

Our growth has been based in part on acquisitions, and our future growth could be adversely affected if we make acquisitions that turn out to be incompatible with our existing business or unsuccessful, or if we are unable to find suitable acquisition targets

We have achieved much of our growth by acquiring other companies that have provided us with complementary technologies and product lines. To the extent that we are unable to make successful acquisitions, 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. There can be no assurance that our investments will generate the operational and financial returns we expect. The success of 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;

•

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

•

accuracy of financial due diligence.

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

Our growth places strains on our managerial, operational and financial resources

Our future success depends on our ability to expand our organization in line with the growth of our business, including the integration of recently added subsidiaries within the Nidec group. However, our growth has placed, and is expected to continue to place, a significant strain on our managerial, operational and financial resources. Our recent acquisitions and any further growth by us or our subsidiaries or affiliates, or an increase in the number of our strategic relationships, will increase this strain on our managerial, operational and financial resources. This strain may inhibit our ability to achieve the rapid execution necessary to successfully implement our business plan.

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

We have patent protection on certain aspects of our technology and also rely on trade secret, copyright and trademark laws, as well as contractual provisions, to protect our proprietary rights. 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;

11

•

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 specific information relating to the intellectual properties disputes that could have an adverse effect on our results of operations, see Item 4.B. “Business Overview—Legal Proceedings.”

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

Sales to customers outside Japan accounted for 69.1%, 69.1% and 71.1% of our consolidated net sales during the years ended March 31, 2006, 2007 and 2008, respectively. A significant portion of our overseas sales is denominated in currencies other than the Japanese yen, primarily the U.S. dollar. As a result, appreciation of the Japanese yen and other currencies against the U.S. dollar will generally have a negative effect on our operating income and net income. We experience volatility in our results of operations 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 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 rec ent years we have attempted 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. We also enter into forward exchange contracts to hedge portions of our transactional exposure to fluctuations in the value of foreign currencies as compared to the Japanese yen. Nevertheless, we remain exposed to the effects of foreign exchange fluctuations.

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 sixteen 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, Japan Servo Co., Ltd., Nidec Shibaura Corporation, Nidec-Shimpo Corporation, Nidec Motors & Actuators and Nidec Nissin Corporation. 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 p rinciples. Therefore, our segmental 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.

12

We rely on production in developing countries which may become politically or economically unstable and face risks affecting international operations

We produce and sell a large percentage of our products at locations in the following developing countries: China, Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Mexico. In particular, we are growing increasingly reliant on our production bases in China, where we continue to move manufacturing operations in order to take advantage of more competitive production and supply costs. These countries 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 would be able to continue to manufacture our products cost-efficiently or at all. The governmental authorities of those areas may impose regulations or restrictions that would make it difficult, impractical or impossible, whether economically, legally or otherwise, for us to con duct our business there. Dependence on overseas production, especially in developing countries, and managing international operations exposes us to a number of additional risks associated with foreign commerce, including the following:

•

economic slowdown or downturn in the relevant industries in foreign markets;

•

international currency fluctuations;

•

general strikes or other disruptions in working conditions;

•

political instability or terrorist activities;

•

trade restrictions or changes in tariffs;

•

outbreaks, such as avian flu, that inhibit international or regional commerce;

•

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; and

•

potentially adverse taxes.

Any or all of these risks could adversely affect our business, financial condition and results of operations.

We may become subject to more stringent environmental regulations in the future

Our business activities are subject to a wide range of environmental laws and regulations in Japan, Asia, North America, Europe and other areas. These regulations may become more stringent over time. In such a case, 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 could increase and be significant, which would materially and adversely affect our business, financial condition and results of operations.

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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.

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, engineering 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 there can be no assurance that we and our affiliates will be able to attract and retain such additional personnel.

A substantial number of our shares of common stock are eligible for future sale, and the sale of these shares may cause our stock price to decline, even if our business is doing well

As of March 31, 2008, there were 144,939,997 shares of our common stock issued and outstanding, including 23,423,484 shares beneficially owned by our President and CEO, Mr. Shigenobu Nagamori, representing 16.1% of the outstanding shares. 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. Additional sales of a substantial amount of our common stock in the public market, or the perception that 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 usin g 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 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. In addition, a holder of shares constituting less than one unit does not have the right to require us to issue share certificates for those shares. Accordingly the transferability of our shares constituting l ess than one unit is significantly limited. 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.

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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 and 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.

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 the company’s 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.

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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. All or substantially all of our assets and 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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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 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 t hese 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:

•

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;

•

general economic conditions in the information technology, consumer electronics and related product markets, particularly levels of consumer spending;

•

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;

•

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

•

adverse changes in laws, regulations or economic policies in any of the countries where we have manufacturing operations, especially China; and

•

any negative impacts on our businesses from outbreaks of diseases in the countries where we have production plants, such as avian flu.

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Item 4. Information on the Company.

A. History and Development of the Company.

Nidec is a joint stock corporation that was incorporated and registered under the Commercial Code (in May 2006, the Commercial Code was replaced by the Japanese Company Law) 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 telephone number is 81-75-935-6140.  As of March 31, 2008, we operate through 128 subsidiaries located in 17 countries, and five affiliated companies located in five countries. We had 96,897 employees worldwide, 90.8% of which were employed outside Japan, as of March 31, 2008.

During the fiscal year ended March 31, 2007, we consolidated three new companies, Fujisoku Corporation, Nidec Motor & Actuators group and Brilliant Manufacturing Limited, thus adding to the scope of our business strategies for further intra-group synergies and the expansion of our overseas business.  We acquired 98.9% of the outstanding shares of Fujisoku Corporation in November 2006 and 100.0% of the voting rights of the Motors & Actuators business of Valeo S.A., France in December 2006.  In addition, we acquired 87.1%, or 406,031,100 shares of the outstanding shares of Brilliant Manufacturing Limited through a tender offer in February 2007.

In April 2007, we acquired 51.7%, or 18,203,000 shares of the common stock of Japan Servo Co., Ltd. through a tender offer, to aim to achieve an optimal blend of the technological expertise and production scale that the two companies have developed to date, particularly in the market of small precision motors. Since we already owned 1,466 shares of Japan Servo’s common stock prior to April 2007, the aggregate amount of shares of Japan Servo we own is 18,204,466 shares.

The following list presents a selected history of our major acquisition activities related the expansion of our small precision motors, mid-size motors, machinery, electronics and optical components and other products businesses:

Small Precision Motors, Machinery and Other Products

Year	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 magnetic recording devices 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 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.

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Year	Event
1997/ 2002	Our subsidiary, Nidec-Shimpo Corporation, acquired 90.0% of the outstanding shares of Read Corporation, currently Nidec-Read Corporation, from Nippon Steel Chemical Co., Ltd. Nidec-Read manufactures engineering inspection equipment for electronics components, including printed circuit boards, ceramics, semiconductors and automotive parts. Nidec-Read became our majority-owned subsidiary in February 2002 as a result of our acquisition of additional shares of Nidec-Shimpo Corporation.
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 owners hip of Nidec Copal Electronics to 40.0% and 51.0% in 1998 and January 2004, respectively.
1998	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 owned 40.0% of the joint venture. We subsequently dissolved the joint venture and purchased the other 60.0% from our former joint venture partners, and Nidec Shibaura became our wholly-owned subsidiary from September 2000. Nidec Shibaura develops and manufactures precision motors for electric appliances and automobiles. Through Nidec Shibaura, we aim to accelerate the pace of development of new, highly competitive products in the worldwide market of motors for household appliances and automobiles.
1999	In October 1999, we acquired 71.0% of the outstanding shares of Nemicon Corporation, currently Nidec Nemicon Corporation. Later that year we acquired an additional 2.1%. Nidec Nemicon produces optical rotary encoders, proximity sensors and other electronic equipment.
2000	We acquired 67.0% of the outstanding shares of Y-E Drive Corporation, currently Nidec Power Motor Corporation, from Yasukawa Electric Corporation. Nidec Power Motor designs, develops, manufactures and services mid-size motors for industrial equipment and home electrical appliances. This acquisition is in line with our strategic plan to expand our business into the field of mid-size motors.
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.
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.

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Year	Event
2006	In December 2006, we acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France. As a result, we have included the results of the Nidec Motor & Actuators group (consisting of seven companies) wholly-owned subsidiaries 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 Brilliant Co., Ltd. Nidec Brilliant Co., Ltd is engaged in manufacturing and sales of base place die-casting and top covers used in hard disk drives.
2008	In April 2007, we acquired 51.7% of the common stock of Japan Servo Co., Ltd. (Effective October 1, 2008, the company’s name will be changed to “Nidec Servo Corporation”.) Japan Servo manufactures and sells motors and motor-applied products.

For the years ended March 31, 2006, 2007 and 2008, our capital expenditures, as shown in our consolidated statements of cash flows for those years, were ¥43,185 million, ¥39,144 million and ¥35,660 million, respectively. Major capital expenditures for the last three fiscal years included the acquisition of property, plant and equipment for hard disk spindle motors that have fluid dynamic bearings in Thailand and the Philippines. We have had no recent significant divestiture and no significant divestitures are currently being planned.

B. Business Overview.

Overview

We believe we are the world’s leading manufacturer of spindle motors for hard disk drives and also produce a variety of other small precision brushless DC motors. We ship our spindle motors to hard disk drive manufacturers throughout the world. For the year ended March 31, 2008, our net sales of hard disk drive spindle motors amounted to ¥223,068 million, representing 30.1% of total net sales of ¥742,126 million. For the year ended March 31, 2007, our net sales of hard disk drive spindle motors amounted to ¥198,196 million, representing 31.5% of total net sales of ¥629,667 million. For the year ended March 31, 2006, our net sales of hard disk drive spindle motors amounted to ¥164,575 million, representing 30.7% of total net sales of ¥536,858 million.

In addition to spindle motors, we focus on the production of:

•

other small precision brushless DC motors used in high-speed, continuous-duty applications, such as CD-ROM drives, CD-read/write, or R/W, DVD drives, high-capacity floppy disk drives, as well as in office equipment, such as facsimile machines, laser printers and photocopy machines;

•

brushless DC fans, which are incorporated in computers, game consoles and other electronic equipment to disperse heat and lower the temperature of critical components;

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mid-size motors used in household appliances, automobiles and industrial equipment;

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machinery;

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electronic and optical components; and

•

others.

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In order to better respond to pricing pressure and customer demands, we have established various overseas operations for research and development, production and sales. We currently have research and development facilities, production facilities and sales offices located in Japan, Asia, North America and Europe. Most of our research and development facilities are concentrated in Japan, where we focus on the development of next-generation motor and drive technology products. Most of our production facilities outside Japan are located in Asian countries such as China, Thailand, the Philippines, Singapore and Vietnam. This allows us to take advantage of lower labor costs while also gaining more direct access to our customers’ production facilities in these regions.

In recent years, we have sought to grow and expand the range of our products by investing in, or acquiring companies with, technologies in motor, drive and other related products. These investments and acquisitions have provided us with ready access to markets for new products and personnel who can work with us in developing products that incorporate their technologies and ours. The products and operating results of recently-acquired consolidated subsidiaries are covered within the description of our business.

Basic Characteristics of Electric Motors

The following description of basic characteristics of electric motors is meant to provide some background information that will help you understand recent trends relating to electric motors, our primary products.

In the first half of the twentieth century, electric motors had a limited number of uses such as driving industrial machinery and pumps. However, with the proliferation of household appliances after World War II, electric motors came to be used in a wider variety of applications and products such as air conditioners, washing machines, refrigerators and other household appliances. Today, sophisticated motors are required by many of the electronic products including computers, information technology equipment and home electronics. Electronic products are becoming increasingly sophisticated, offering greater features through the use of microprocessors, micro disk drives and other components. This increasing complexity requires more precise power quality and greater power reliability. In addition, the increasing costs of electricity, coupled with government regulations and environmental concerns, have contributed to increased demand for more energy-efficient motors. All these trends are contributing to increased demand for more advanced electric motors and rotational equipment technology.

Small precision motors can be classified into three broad categories based on the underlying technology: AC motors, general-purpose brush DC motors and special purpose brushless DC motors. Hard disk drive spindle motors, which are our main product, are a type of special purpose brushless DC motor.

DC Motors and AC Motors

At the most basic level, electric motors are devices that convert electric power into rotating mechanical energy. An electric motor can be powered by alternating current, commonly known as AC, or direct current, commonly known as DC. AC power is supplied to homes, offices and industrial sites directly by power companies, whereas DC power is supplied either through the use of batteries or by converting AC power to DC power.

Both AC motors and DC motors can be used to power most applications. The determination as to which motor is most appropriate depends on considerations of factors such as power source availability, speed variability requirements, torque needs, noise constraints and cost. Torque is a measure of the amount an object will rotate when a given force is applied.

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Because of their simple design, AC motors offer reliable, low maintenance-cost operation for heavy applications. This is why AC motors are preferred for fixed speed applications in the industrial context and for commercial and domestic applications where AC line power can be easily provided. Many machines that require heavy power inputs such as air conditioners, washers, dryers, industrial machinery, fans, blowers, vacuum cleaners, elevators and escalators use AC motors. However, AC motors are not ideal for products that require delicate or precise control because the electronics required to control an AC motor are considerably more expensive than those required to control a DC motor. In addition, due to heat considerations, AC motors usually cannot be operated at low speeds.

DC motors are ideal for products that are more dependent on the precision of speed than power. Controlling the speed of a DC motor is simple. The higher the current becomes, the faster the rotation becomes. Most DC motors will operate over a wider range of speeds and provide better performance than comparable AC motors. The superior performance is partly due to the simplicity of control, but it is also due in part to the fact that most DC motors are designed with variable speed operation in mind, and have added heat dissipation features that allow lower operating speeds. It is also easy to control the motor’s torque because it is proportional to current. By limiting the current, the torque is also limited. This makes DC motors ideal for delicate applications. DC motors have become the motor of choice in the majority of variable speed and torque control applications such as hard disk drives, CD-ROM drives, DVD drives and flop py disk drives. In the area of household appliances, such as cordless vacuum cleaners and other products that have traditionally used AC motors, manufacturers are beginning to switch from AC motors to DC motors due to the need for more energy-efficient and precisely controlled motors that support more sophisticated product features.

Brush DC Motors and Brushless DC Motors

There are two kinds of DC motors: brush and brushless. Brushless DC motors differ from conventional, brush DC motors in that the current which produces mechanical energy is applied to stationary coils via electronic switches without physical contact with the rotor, rather than by stationary rods brushing against the rotating coil. Conventional brush DC motors have several limitations: brush life, brush residue, maximum speed, and electrical noise. By avoiding friction, sparks and the wearing and fragmenting of the brush rods, brushless DC motors provide cleaner, faster, more efficient, quieter operation and longer maintenance-free life than conventional brush DC motors. These characteristics make brushless DC motors suitable for applications such as hard disk drives, for which clean operation is critical, and audio-visual equipment, for which low-noise operation is an important factor.

Although brushless DC motors have many advantages over brush DC motors, the use of brushless DC motors is still primarily confined to precision applications in disk drives and industrial motion equipment that require high efficiency, smooth operation and precise speed control. The higher price of brushless DC motors has been the primary factor slowing their broader adoption. DC motors require not only motor parts, but also drive electronics that currently can cost more than motor parts. Nevertheless, we believe that over time brushless DC motors will be more widely adopted among manufacturers of household appliances, audio-visual equipment and even larger heating, ventilation and air conditioning systems. As consumers come to demand more sophisticated and energy-efficient appliances, and as the production of brushless DC motors for such products reaches higher volumes, prices may fall to levels competitive enough to encourage mor e users to switch from brush DC motors to the more efficient and longer-lasting brushless DC motors.

Fluid Dynamic Bearing Technology in Hard Disk Drive Spindle Motors

Although products vary, all hard disk drives incorporate the same basic technology. One or more rigid disks are attached to a spindle motor assembly that rotates the disks at a high constant speed around a hub. The disks are the components on which data is stored and from which it is retrieved. Read/write heads, mounted on an arm assembly similar in shape to that of a record player, fly extremely close to each disk surface and record data on and retrieve it from concentric tracks in the magnetic layers of the rotating disks. In a hard disk drive, with a gap of less than 0.01 microns (10nm) between the disk and the read/write head, even the smallest error can result in disastrous data damage or loss.

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The most significant technological challenges facing hard disk drive manufacturers today are associated with market demand for increased storage capacity, speed, precision and durability. Storage capacity is measured by areal density, which represents the number of bits of information on a linear inch of the recording track, multiplied by the number of recording tracks on a radial inch of the disk. As the size of computer software and data files has increased and the use of graphic and video files has proliferated, the need has grown for higher capacity, higher performance, smaller size and lighter weight hard disk drives. To achieve these goals, spindle motors capable of higher speeds and greater rotational precision need to be continually developed. Accordingly, the disk drive spindle motor has become an increasingly critical component of disk drive technology.

In fluid dynamic bearings, the bearing function is taken over by a layer of lubricant less than one-tenth the thickness of a human hair. The rotating spindle supported by the lubricant essentially floats in the bearing unit. The non-existence of metal-to-metal friction in fluid dynamic bearings substantially reduces non-repeatable run-out errors caused by surface imperfections of ball bearings. That makes it possible to increase rotational speed, reduce track spacing and increase the number of tracks per inch on the disk. Fluid dynamic bearing hard disk drive spindle motors offer other advantages over conventional ball bearing hard disk drive spindle motors, including better shock absorbance and vibration dampening, less noise and an extended fatigue life. Our fluid dynamic bearing hard disk drive spindle motors can rotate at over 20,000 revolutions per minute compared with the 12,000 to 15,000 revolutions per minute for conventi onal motors with ball bearings. Fluid dynamic bearings reduce operation noise by three to ten decibels compared to ball bearings.

Markets for Nidec Electric Motors

As an independent supplier of electric motors, we manufacture and market small- to mid-size DC electric motors generally categorized as brushless motors, brush motors, stepping motors and servo motors. Our electric motors are mainly directed to the following application areas:

•

Personal computers and servers― Hard disk drives, optical disk drives;

•

Digital home appliances― Hard disk drives, optical disk drives;

•

Home electric appliances;

•

Office equipment;

•

Automotive systems; and

•

Industrial equipment.

Presently, computer hard disk drives constitute the largest application market for our electric motors. In the medium and long terms, we expect home electric appliances and automotive systems, both on a steady digitalization path today, to become equally significant application areas.

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Market for DC Brushless Motors for Hard Disk Drives (HDDs)

According to a study reported by Techno Systems Research Co., Ltd., Japan (TSR) in February 2008, global demand for spindle motors used in HDDs amounted to 518 million units in 2007, representing a 15% increase from 2006. We currently supply spindle motors to all the world’s major HDD manufacturers. In the year ended March 31, 2008, 35% of our HDD motor sales came from Seagate, and the remainder from Western Digital, Hitachi GST, Fujitsu, Toshiba and Samsung.

We currently compete with four HDD motor suppliers: Minebea, Alphana Technology (formerly Victor Company of Japan), Panasonic Shikoku Electronics, and Samsung Electro-Mechanics. Based on TSR’s demand report and our own shipment record, we estimate our share of the global market for HDD spindle motors in 2007 to have ranged between 73% and 75%. Sales of DC brushless motors for hard disk drives are categorized as “Small Precision Motors”.

Given an extensive market presence, the key determinant of our performance in this area of business depends highly on aggregate demand conditions in the global HDD market.

The following are among the key trends in the HDD industry:

•

According to a May 2008 report by TSR, the global demand for HDDs may increase to 567 million units in 2008, up over 13% from 2007.

•

Successive generations of HDD products using perpendicular magnetic recording (PMR) and follow-on technologies are expected to enable average HDD capacities to increase by nearly threefold by 2012.

•

Price competition among HDD manufacturers has been intensified particularly in the 2.5-inch platform, as demand for laptop PCs grows in emerging markets

•

The HDD market is shifting toward small-form factor drives and undergoing competition with flash memory-based storage devices.

•

HDD manufacturers’ horizontal/vertical expansion has been accelerated in recent years.

Market for Brushless DC Motors for Home Electric Appliances

The global electric motor market for major home electric appliances, including air-conditioners, refrigerators and washing machines, is expected to maintain a slow but steady growth in the coming years. Urbanization and increasing per capita income will continue to drive demand for home electric appliances in emerging markets in the Asia-Pacific region, especially China and India. In the meantime, new innovations driven by changing fashion and environmental needs are anticipated to generate new replacement demand in already developed markets.

Among all applications in home electric appliances, the largest application for our electric motors (more precisely, DC brushless motors) at present is room air conditioners, followed by refrigerators and washing machines. DC brushless motors for home electric appliances are categorized as ”Mid-size Motors”.

According to the Japan Refrigeration and Air Conditioning Industry Association (JRAIA), the global demand for room air conditioners reached 74.9 million units in 2007, up 4.4% from 2006, despite a sharp rise in prices of oil and steel in the past few years. We currently supply DC brushless motors for room air conditioners mainly to Japanese major electronics companies.

With our Japanese customers expanding further into overseas markets partly on the strength of the DC brushless motors’ advanced features, we are expecting to compete on a larger scale with overseas suppliers, who are mostly captive and mainly supply conventional DC brush/AC motors.

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With a growing consumer appetite for sophisticated home appliances and increasingly tighter environmental regulations, DC brushless motors are attracting keen interest of home electric appliance manufacturers for its highly controllable, energy-saving advantages over conventional AC/brush type motors. DC brushless motors enable variable control of shaft rotation, helping appliances significantly reduce power consumption and CO2 emissions. As the world’s largest manufacturer of DC brushless motors, we are seeing an indication that stricter requirements on energy efficiency may start opening up new opportunities for DC brushless motors even in emerging countries in the next several years, which are regarded today as price-sensitive, low end-oriented markets.

Market for Brushless DC Motors for Automotive Systems

Demand for electric motors is also growing in the automotive industry, driven by strong consumer preferences for enhanced comfort and the EU directive limiting average emissions from new cars sold in the 27 EU member states to 120g CO2/km by 2012. A paradigm shift in vehicle control is gaining momentum to replace many of the traditional hydraulic-driven mechanical linkage system with electronic control solutions. This translates into more electric motors used in a new vehicle control environment.

In tandem with overall growth of the electric motor market, there seems to be a notable  increase in demand for DC brushless motors used in vehicle electronic drive control system. One such application is the electronic power steering system, which helps improve a car’s fuel efficiency by substituting the conventional hydraulic pump-driven system that constantly wastes electric energy. Going forward, new application areas may include the dual-clutch system, active suspensions and the brake system.

According to our own estimates, the global automotive motor market presently constitutes a trillion yen market (excluding captive sales) and will exhibit a 1.7-fold increase by 2013. Sales of DC brushless motors for automotive systems are categorized as “Mid-size Motors”.

Our Business Strategy

Nidec Corporation pursues sustainable business growth through the establishment of a leadership position in motor technology. With a particular focus on brushless DC motors, we explore new ways to serve the global market with energy-efficient, environment-friendly motor drive solutions.

Basically, we evolve our core competencies through adherence to the following elements:

•

New product built on innovative technology (technical competitiveness);

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New market with long-term growth potential (first mover advantage); and

•

New customer base (market share supremacy, risk diversification).

In order to reach our business goal, we have set out the following action plans for fiscal 2010-2012. Our primary focus is on enhancing the profitability of the continuing core operations and expanding the addressable market for home appliance and automotive motors, our future business pillars.

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1) Profitability enhancement in the production of hard disk drive (HDD) spindle motors

The HDD market is expected to maintain healthy growth in the mid- to long term, backed by a robust PC demand in the emerging markets, growing needs for enterprise data backup, and private demand for high-density audiovisual data contents. In the meantime, however, HDD prices are coming under pressure through intense competition among the six major HDD suppliers, particularly in the market for mobile-PC storage. Lower HDD prices can help HDD gain competitiveness in the laptop market against the alternative solid-state drives (SSD) based on flash memory, but at the same time, indicate increased margin pressure on the component suppliers.

HDD spindle motors represented 30.1% of our total sales in the fiscal year ended March 31, 2008, accounting for an estimated 73% to 75% share of the global market. Taking into consideration all aspects of the present situation, we place first priority for this operation on profitability enhancement and have adopted a threefold approach as outlined below.

i) Internal manufacturing

Presently, subcontracted parts account for approximately two-thirds of our average manufacturing cost per motor unit, and the largest portion of the subcontracting cost derives from hard drive base plates. Internalizing the base plate production is a key to enhancing profitability of our HDD motor business. We took our first steps in this direction in 2007 by acquiring Brilliant Manufacturing Limited (now Nidec Brilliant Corporation), a Singaporean manufacturer of HDD base plates and top covers, and building our own manufacturing capacity in the Philippines and Thailand.

ii) Product mix improvement

Perpendicular Magnetic Recording, together with new data storage technologies including discrete track recording, are expected to enable 500 gigabytes/platter in the 3.5-inch format, 250 gigabytes/platter in the 2.5-inch format and 120 gigabytes/platter in the 1.8-inch format by the end of 2008. The dramatic growth in areal density requires the spindle motor to provide even greater reliability and accuracy at the peak rotation velocity. To meet the stringent quality requirements, we have designed and commercialized our proprietary shaft-fixed-type spindle motor which operates in the higher velocity range without compromising rotation accuracy. Currently designed for 3.5-inch HDD for high-end enterprise servers, these high-value-added models are expected to find their ways into the 3.5-inch HDD for consumer electronics products and 2.5-inch HDD for laptop PCs. Anticipating demand growth, we plan to increase the production capacity of the new models by over 40% toward the end of March 2009. We believe the ongoing trend toward larger hard drive capacity will provide us with an ample opportunity to improve our product mix of this business segment.  

iii) Parts/process standardization

Standardization is intended to reduce production costs primarily by minimizing the number of parts and processes needed for the manufacture of OEM motors. Under the standardized production environment, parts and processes are coordinated and common enough to ensure that all products in the mass customization platform can be built without the setup changes that would undermine flexible manufacturing. We believe standardizing parts and processes will also help simplify supply chain management, improve the average quality levels, and shorten time to market.

2) Expanding our addressable market for home appliance/automotive motors

Along with the stated efforts in improving profitability of our core, HDD motor business, we seek greater presence in the global home appliances/automotive motor market through the extensive use of our own brushless DC motor technology and integration of a broad range of motor expertise through corporate acquisitions.

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The common thread running through our approach to the automotive/home appliances motor market is the expansion of addressable markets through product diversification. In the home appliance market (the Japanese market, in particular), our brushless DC motors are finding ways into new-generation refrigerators, washing machines, and air-conditioning system which stress operating quietness, power efficiency and controllability. In step with Japanese customers planning to move toward the international markets, we have started increasing production to meet an anticipated demand increase. In April 2007, we acquired Japan Servo Co., Ltd., a former subsidiary of Hitachi, Ltd., successfully extending our reach further into a variety of home appliances applications.

EU directive mandating the reduction of the average CO2 emissions of new cars to 120 g/km by 2012 has reinforced the automobile industry’s technological transition toward highly-sophisticated, electronically-controlled automobile drive systems. These new control systems require a greater number of electric motors to replace the existing hydraulic power package and mechanically-controlled system. Viewing the automotive motor market as a major source of our future growth, we have been proactively investing research and development resources in this area. Currently, automotive applications using our brushless DC motors include electric power steering system and seat/fuel-cell cooling fans. In the next five years, we expect a wider range of drive control systems, such as electric clutches, electric active suspension and brakes to start using our brushless DC motors.

Nidec Motors and Actuators (NMA), formerly Motors & Actuator division of Valeo S.A., France, now serves as a substantial foothold for our automotive motor operations in the European and North American markets. In its final phase of post merger integration, NMA has begun to see a healthy flow of its own automotive motor lines supplied through its streamlined sales channels. Under the current plan, we expect our overall automotive sales from Nidec and NMA to triple by fiscal 2012.

Sales

We regard a timely response to consumer demands as the most important aspect of service. By establishing a sales base in many regions, both inside and outside Japan, we have established a global sales network which covers the world’s key motor markets.

The following table presents a breakdown of total revenues by geographic market for the three years ended March 31, 2006, 2007 and 2008:

		Yen in millions			U.S. dollars in thousands
		For the year ended March 31			For the year ended March 31, 2008
		2006	2007	2008
Sales and operating revenues:
	Japan	¥ 294,307	¥ 341,642	¥ 371,705	$ 3,710,001
	U.S.A.	8,398	10,747	19,513	194,760
	Singapore	72,970	59,488	57,635	575,257
	Thailand	56,246	80,579	109,994	1,097,854
	The Philippines	6,848	12,929	13,374	133,486
	China	30,565	36,884	45,398	453,119
	Other	67,524	87,398	124,507	1,242,709
	Consolidated total	¥ 536,858	¥ 629,667	¥ 742,126	$ 7,407,186

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Because our hard disk drive spindle motors are components used in information technology equipment, the market for which is subject to rapid technological change, it is critical to provide in-depth support, including by locating production, sales and service operations as close as possible to customers. Success in our business depends on the ability to quickly understand and respond to market needs, including product trends, features and specifications, as well as production capacity and pricing. Our Sales Department is constantly evaluating the market in search of new opportunities. Feedback on identified needs is quickly passed on to our Development and Production Departments, and the entire team works together to further the commercialization effort of new products. The rapid acquisition of information and action by our Sales Department enables our Development and Production Departments to respond quickly, so that products mee ting customer requirements can be launched in a timely manner.

Production

We specialize in the field of “Everything that Spins and Moves” centering on drive technology products, namely motors, and have acquired large market share for many of our products by reinforcing motor-related technology and application engineering through mergers and acquisitions. As a result, we have been successful in expanding sales and profits by taking advantage of new market opportunities and demand trends. We divide operations into the five business segments discussed below. While development and design engineering are mostly conducted in Japan, production of small precision motors is conducted in various Asian countries, including Thailand, the Philippines, Singapore, China and Vietnam, based on our basic policy of manufacturing products close to the manufacturing sites of our customers. The manufucture of mid-size motors is also conducted in various countries, including Japan, China, Thailand, Spain, Poland an d Mexico. Machinery is still manufactured mostly in Japan.

Small Precision Motors

We manufacture most of our small precision motors, such as spindle motors for HDDs, brushless DC motors and fan motors in our overseas manufacturing subsidiaries in Thailand, the Philippines, Singapore, China and Vietnam. In addition, we established joint ventures with NTN Corporation in China in August 2002, and in Thailand in November 2005. The joint ventures are producing fluid dynamic bearing units using oil impregnated sintered-alloy metal for our spindle motors for HDDs. These manufacturing operations in Asia have resulted in cost reductions in relation to such factors as capital expenditure, labor costs and taxes. Also, as part of efforts to facilitate production cost reduction, we are promoting the internalization of motor parts in these sites. We have established research and development centers in Japan, which develop new designs and more efficient processing/production technology in order to create advanced new product s. In particular, our technical development centers in Kyoto, Shiga, Nagano and Tottori have been engaged in the design and prototype production for new-products and are promoting the full transfer of their technical expertise, including formation of mass production lines, to our overseas plants.

Mid-Size Motors

The design and development of the mid-size motors is conducted in Japan. Nidec Corporation handles mid-size brushless DC motors for vehicles responding to an increase in the demand for fuel-efficient vehicles generating less emission. Nidec Shibaura Corporation deals with mid-size brushless DC motors for consumer electronics and housing facilities, which are equipped with energy-saving, low noise and longer life features. Nidec Power Motor Corporation handles mid-size motors for energy-efficient machinery. The manufacture of those products is conducted in Japan, China, Thailand, Spain, Poland and Mexico. Manufacturing bases in Japan provide technical support to manufacturing subsidiaries in China, Thailand, Spain, Poland and Mexico.

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Machinery

Semiconductor manufacturing equipment, automatic measuring equipment, image processing equipment, high-speed press machines, printed-circuit-boards inspection equipment, industrial robots and card readers, have mainly been designed, developed and manufactured in Japan. Some of our measuring equipment and high-speed press machines are being manufactured in China.

Electronic and Optical Components

We manufacture encoders, optical components such as camera shutters, lens units and optical pick-up units, electronic parts including pressure sensors, electronics circuit parts and actuators in our subsidiaries ,Nidec Copal Corporation, Nidec Copal Electronics Corporation and Nidec Sankyo Corporation. Shutters and lens units for various cameras are developed and designed by Nidec Copal Corporation in Japan and manufactured in Japan, Thailand and China. Nidec Sankyo Corporation develops, designs and manufactures electronic components such as actuators and optical pick-up units, which are being manufactured in Singapore and China. Electronic components such as pressure sensors and electronics circuit parts are being developed, designed by Nidec Copal Electronics Corporation in Japan and manufactured in Japan and China.

Others

“Others” consists of pivot assemblies and automotive parts. Our manufacturing subsidiary in Singapore conducts the development, design and manufacture of pivot assemblies. Automotive parts are developed and designed in Japan and manufactured in Japan and Vietnam.

Suppliers

We purchase components, raw materials, equipment relevant to the manufacture of our products from various suppliers selected on the basis of superiority in product price, product quality, production lead-time, and associated services. We believe that this policy encourages suppliers to develop technological expertise and cost competitiveness. A large portion of such procurements, except some components for printed circuits, is locally available. We believe that the materials and components necessary for our manufacturing operations are presently available both in quantity and quality.

Key motor parts outsourced are, pressing and stamping parts for the production of hubs, stator cores, and die casts used in brackets motors are mounted on. Other products outsourced include printed-circuit components, including integrated circuits and electromagnetic steel sheets, as well as other electronic parts. In the past, we purchased base plates for motors from suppliers, but now we produce such base plates. Once in the past, an increase in demand for printed circuits caused a shortage of relevant electronic components, including integrated circuits. If similar difficulties should occur in the future, we would be compelled to build stock to meet demand.

Government Regulation and Environmental Standards

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 do not use large volumes of hazardous or toxic chemicals in our manufacturing operations. Moreover, our operations do not require the disposal of large amounts of waste into the environment. Our emissions are sufficiently low so that we are not required to report their amount under the Pollutant Release and Transfer Register.

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Our overseas operations are also subject to environmental regulation. Our operations in the United States, for example, are subject to extensive environmental regulation under a number of laws, including the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental, Response, Compensation and Liability Act and the Toxic Substances Control Act. We are also subject to substantial state legislation that parallels, and in some cases imposes more stringent obligations than, the federal requirements.  Any electronic or electrical equipment sold in the EC are subject to the Restriction of Hazardous Substances Directive (RoHS) 2002/95/EC. This Directive indicates that only products entering the EU must be in compliance.  Still, we consider the Directive to essentially cover our whole lines of products because of the possibility that products we make and sell elsewhere could be eventually destined for the EU as components of other companies’ products.

We believe that leadership in environmental protection is an important competitive factor in the markets for our products. We have given and will continue to give high management priority to environmental matters. We believe that our operations are in substantial compliance with regulatory requirements affecting our facilities and products in each of the markets in which we operate. We monitor these requirements and adjust affected operations and products to ensure that we remain in substantial compliance with these requirements. Almost all of our plants and manufacturing bases, in Japan and overseas, have either received, or are scheduled to receive within the next several years, certifications under the ISO 14001 standards on environmental management systems of the International Organization for Standardization. Also, we have established a committee to investigate ways pursuant to which that we might eliminate the use of lead in our manufacturing processes. As a result, almost all of our current products use lead-free solder, with a few exceptions because of specific customers’ individual requirements.

Our Employees

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

	As of March 31,
	2006	2007	2008
Japan	7,550	7,989	8,909
North America	197	1,146	1,052
Asia (other than Japan)	70,943	79,208	86,162
Europe	31	727	774
Total	78,721	89,070	96,897

Japan

In Japan, as of March 31, 2008, we had 8,909 employees. 3,954 of these employees were engaged in manufacturing operations, 2,011 in research and development and 1,176 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 has no labor union, labor unions have been organized in some of our subsidiaries. There have been no substantial strikes and/or labor disputes. We believe that the relationship between us and our employees is favorable.

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Overseas

As of March 31, 2008, we had 87,988 employees overseas. 80,403 of these employees were engaged in manufacturing operations, 300 in research and development and 583 in sales activities.

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

Intellectual Property

As of March 31, 2008, we owned 1,947 issued patents, 22 utility model registrations and 279 trademarks in Japan as well as 711 issued patents and 23 trademarks in the United States. Every year, we file additional patent applications in Japan, some of which we file in the United States. We also seek patent protection in various other foreign countries where we manufacture or sell our products. As of March 31, 2008, we had a total of 4,146 patent and utility model applications pending in Japan and in the United States. While we believe that our patents are important, in general, no single or group of related patents is essential to us or any of our principal business segments.

We have two strategies for enhancing the protection of our intellectual property rights. First, we distribute descriptions of our patented technology, with schematics, to our development and sales personnel who have more frequent contact with our competitors and their products. By keeping our development and sales personnel informed about the current status and content of our patent and utility model applications and registrations, they are better able to evaluate whether any of our competitors’ products might be infringing our technology. Second, we are putting more effort into obtaining samples of our competitors’ products so that our technical and legal teams can conduct detailed analysis regarding possible patent infringement. Information gained from this process also helps us to obtain more favorable terms during the negotiation of license agreements.

Legal Proceedings

On February 15, 2005, we filed a patent infringement lawsuit in the Northern District of California in the Unites States against Victor Company of Japan, Limited and its subsidiary, JVC Components (Thailand) Co., Ltd., and their sales agents, Kabushiki Kaisha Agilis and Agilis Technology Inc. (collectively “JVC”), charging them with infringing our U.S. Patent Nos. 5,667,309, 6,554,476, 6,343,877 and 6,793,394. These four patents cover our fluid dynamic bearing technology used in spindle motors found in computer hard disc drives. JVC has supplied and continues to supply spindle motors to hard disc drive manufacturers without a license under these patents. We brought this action to prevent JVC from selling, distributing or importing infringing spindle motors in the United States, and from selling or distributing such motors for incorporation into hard disc drives sold, distributed or imported in the United States. On February 8, 2008, JVC and Nidec signed a settlement agreement at Nidec’s head office and all lawsuits were withdrawn.

On March 6, 2007, we filed a patent infringement lawsuit in the Eastern District of Texas in the Unites States against LG Innotek Co., Ltd. (“LGIT”) and its subsidiaries for infringement of U.S. Patent No. 6,242,830, which relates to our bearing technology used for spindle motors in CD, DVD and/or Blu-ray drives.

On July 30, 2008, we filed lawsuits in the Osaka District Court  against Samsung Electro-Mechanics Co., Ltd. (“SEMCO”), an electronic components manufacturer based in Korea, for infringement of three Japanese patents (No. 3344913, 3502266, 3688015) regarding our spindle motors mainly used for CD/DVD drives. We have requested injunctions to preclude SEMCO from marketing such spindle Japanese market.

We are also involved in a number of 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.

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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, 2008:

Name	Country	Principal business	Percentage owned by us as of March 31, 2008
			(%)
Consolidated subsidiaries
Nidec Automobile Motor (Zhejiang) Corporation	China	Manufacturing of motors for automobiles	100.0%
Nidec America Corporation	U.S.A	Sales of fans and precision motors	100.0%
Nidec (Zhejiang) Corporation	China	Manufacture of spindle motors for hard disk drives	100.0%
Nidec (Dalian) Limited	China	Manufacture of small brushless DC motors and fan motors	100.0%
Nidec (Dongguan) Limited	China	Manufacture of small brushless DC motors	100.0%
Nidec Electronics GmbH	Germany	Sales of spindle motors for hard disk drives and fans	100.0%
Nidec Philippines Corporation	Philippines	Manufacture of spindle motors for hard disk drives	99.9%
Nidec (H.K.) Co., Ltd.	Hong Kong	Sales of parts for our products and sales of spindle motors	99.9%
Nidec Singapore Pte. Ltd.	Singapore	Manufacture and sales of pivot assemblies	100.0%
Nidec Taiwan Corporation	Taiwan	Sales of small brushless DC motors and fans	100.0%
Nidec Vietnam Corporation	Vietnam	Manufacturing of fan motors	100.0%
Nidec Electronics (Thailand) Co., Ltd.	Thailand	Manufacture and sales of spindle motors for hard disk drives	99.9%
Nidec Subic Philippines Corporation	Philippines	Manufacture of spindle motors for hard disk drives	100.0%
Nidec (Shanghai) International Trading Co., Ltd.	China	Sales of small brushless DC motors	100.0%
Nidec Nemicon Corporation	Japan	Manufacture and sales of rotary encoders, proximity sensors and other electronic equipment	99.7%
Nidec Power Motor Corporation	Japan	Manufacture and sales of mid-size motors and small AC motors	92.2%
Nidec Shibaura Corporation	Japan	Manufacture and sales of small AC motors	100.0%
Nidec Copal Electronics Corporation *1	Japan	Manufacture and sales of electronic circuit components, pressure sensors, actuators and potentiometers	62.0%

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Name	Country	Principal business	Percentage owned by us as of March 31, 2008
			(%)
Nidec Copal Corporation *1	Japan	Manufacture and sales of optical, electronic and information equipment, photo laboratory system and factory automation equipment	57.5%
Nidec-Kyori Corporation	Japan	Manufacture and sales of high speed automatic presses, feed devices and other industrial machinery	100.0%
Nidec System Engineering (Zhejiang) Corporation	China	Manufacture of factory automation equipment	100.0%
Nidec Logistics Corporation	Japan	Transportation, warehousing, import and export business, packing, environment business, distribution processing and physical distribution	100.0%
Nidec Machinery Corporation	Japan	Manufacture and sales of automatic assembly line machinery and testers	60.0%
Nidec-Shimpo Corporation	Japan	Manufacture and sales of power transmission drives, control devices, measuring and factory automation equipment, ceramic and wood art equipment, and others	100.0%
Nidec Tosok Corporation *1	Japan	Manufacture and sales of precision automotive parts, automatic measuring equipment, semiconductor manufacturing machinery, air/electronic gauges, precision ball screws, other precision measuring devices and manufacture of fan motors	65.4%
Nidec Total Service Corporation	Japan	Insurance agency, real estate business, merchandising, building maintenance and others	100.0%
Nidec Sankyo Corporation *1	Japan	Manufacture and sales of motors, optical pickup units, automated teller machines, home appliance components and factory automation equipment	65.3%
Nidec Motors & Actuators	France	Manufacturing and sales of air flow system, seat positioning system, body closure system, braking, drive-line and steering system	100.0%
Nidec Brilliant Co., Ltd. *2	Singapore	Manufacturing and sales of hard disk drives base plate, brackets and top covers	98.9%
Japan Servo Co., Ltd. *1	Japan	Manufacturing and sales of motors for brushless motors, stepping motors, fans motors, blowers motors, sensors and motor applications	60.4%

Notes:

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

*2 - The company name has changed from “Brilliant Manufacturing Limited” on April 1, 2008.

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Joint Venture with NTN Corporation

On August 28, 2002, Nidec and NTN Corporation established a joint venture, NTN-Nidec (Zhejiang) Corporation, in Pinghu City located near Shanghai, China.

Nidec holds 40% and NTN holds 60% of the equity of the joint venture. The breakdown of the initial paid-in capital of $6.5 million was $2.6 million from Nidec and $3.9 million from NTN. The purpose of the new joint venture company is to manufacture and sell fluid dynamic bearing units made of sintered alloy metal for hard disk drive motors. Production started in April 2003.

A sintered-alloy-based fluid dynamic bearing units by the new joint venture will be used in our fluid dynamic bearing motors for hard disk drives.  Those motors are sold mainly to the computer/server market through Nidec Corporation. In order to expand the market further, the joint ventures have turned their eyes to promising markets such as the audio-visual market and the mobile market, as the demand for hard disk drives in those markets is increasing.

In January 2004, NTN-Nidec (Zhejiang) Corporation increased its paid-in capital to $21 million U.S. dollars from $13 million U.S. dollars in lieu of an exchange of ownership of shares between Nidec and NTN Corporation. This capital investment was used for capital improvements to achieve increased production capability to 8 million pieces per month from the original 3 million.

After the success of the joint venture NTN-Nidec (Zhejiang) Corporation in China, Nidec and NTN Corporation established a second joint venture, NTN-Nidec (Thailand) Corporation, in Rayong Province located at the south of Bangkok Metropolis, Thailand on November 9, 2005.

Nidec holds 40% and NTN holds 60% of the equity of the new joint venture. The first capital of 360 million Baht is paid by NTN in November 2005. In March 24, 2006, Nidec paid the increased capital of 240 million Baht.

As with the first joint venture in China, the purpose of the second joint venture is to manufacture and sell fluid dynamic bearing units made of sintered alloy metal for hard disk drive motors. Production started in June 2006.

As of March 2008, production capability of NTN-Nidec (Zhejiang) Corporation was 8.8 million pieces per month, and the capacity of NTN-Nidec (Thailand) Corporation was 9.7 million pieces per month.

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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, 2008, we operated manufacturing and sales facilities through 26 Japanese subsidiaries and 102 foreign subsidiaries. These facilities are located in Japan, China, Singapore, Europe, the United States, Thailand, Vietnam, Indonesia, the Philippines, South Korea, Malaysia, Taiwan and Mexico.

The following table sets forth information, as of March 31, 2008, with respect to our principal manufacturing facilities and other facilities:

Facility name	Location	Floor space (square meters)	Principal products and function
In Japan
Corporate Headquarters and Central Technical Laboratories (1)	Japan	36,119	Basic research and development and fluid dynamic bearing technology development
Japan Servo Co., Ltd.(1)	Japan	34,128	Manufacturing of mid-size motors
Nidec-Shimpo Corporation (1)	Japan	29,322	Manufacturing of power transmission equipments and measuring equipment
Nidec Power Motor Corporation (1)	Japan	27,459	Manufacturing and sales of mid-size motors
Nidec Shibaura Corporation Head Office (2)	Japan	24,600	Manufacturing and sales of mid-size motors
Nidec Tosok Corporation Head Office and Technical Center (1)	Japan	23,471	Manufacturing of measuring equipment and semiconductor equipment
Nidec Copal Corporation Koriyama Technical Center (1)	Japan	23,384	Development design and material procurement
Shiga Technical Development Center (1)	Japan	20,596	Research and development and manufacturing of spindle motors for hard disk drives, DC motors for PC peripheral devices, mid-size motors for automobiles and pumps and precision motors
Nidec Sankyo Ina Facility (1)	Japan	18,160	Manufacturing of robots
Nidec Copal Corporation Shiojiri Factory (1)	Japan	16,452	Manufacturing of industrial automation and labor-saving equipments
Nidec Tosok Corporation Yamanashi Factory (1)	Japan	16,320	Manufacturing of components for automobiles
Nidec Sankyo Komagane Facility (1)	Japan	14,279	Manufacturing of time switches, AC motors, stepping motor units, and related parts and components
Nidec Copal Electronics Corporation Sano Factory (1)	Japan	14,188	Manufacturing and sales of precision automotive parts
Nidec Copal Precision Parts Corporation Koriyama Factory (1)	Japan	13,872	Manufacturing of precision dies, press stamping components, injection molding components and surface treatment processing components

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Facility name	Location	Floor space (square meters)	Principal products and function
Outside Japan
Nidec Philippines Corporation (3)	Philippines	76,658	Manufacturing of spindle motors for hard disk drives
Nidec Sankyo (H.K.) Co., Limited Shilong Factory (4)	China	68,800	Machining of small motors, stepping motors, stepping motor units, and related parts
Nidec Motors & Actuators (Mexico) S. de R.L. de C.V (1)	Mexico	46,769	Manufacturing of motors for automotive and industrial applications
Nidec (Dalian) Limited	China	50,784	Manufacturing of spindle motors for hard disk drives, DC motors for PC peripheral devices, fans and components for precision motors
Nidec Electronics (Thailand) Co., Ltd. Rojana Factory (1)	Thailand	42,280	Manufacturing of spindle motors for hard disk drives
Nidec Tosok (Vietnam) Co., Ltd. (2)	Vietnam	41,972	Manufacturing of fans and components for automobiles
Nidec Electronics (Thailand) Co., Ltd. Rangsit Factory (1)	Thailand	41,650	Manufacturing of spindle motors for hard disk drives
Nidec (Zhejiang) Corporation	China	41,000	Manufacturing of spindle motors for hard disk drives, assembling motors and accessories
Nidec (Dong Guan) Corporation (4)	China	39,880	Manufacturing of small brushless DC motors for PC peripheral devices and office automation equipment
Nidec Precision (Thailand) Co., Ltd. Rojana Factory (1)	Thailand	37,630	Manufacturing of components for precision motors
Nidec Subic Philippines Corporation (2)	Philippines	35,626	Manufacturing of spindle motors for hard disk drives
Nidec Motors & Actuators (Germany) GmbH (1)	Germany	31,120	Manufacturing of motors for automotive and industrial applications
Nidec Copal (Zhejiang) Co., Ltd.	China	29,718	Manufacturing of components and lens cones for digital still cameras and mini-laboratory systems
Nidec Copal (Thailand) Corporation (1)	Thailand	28,306	Manufacturing of camera components and micro motors
Nidec Copal Electronics (Zhejiang) Co., Ltd.	China	26,000	Manufacturing of actuators
Nidec Shibaura (Zhejiang) Co., Ltd. (2)	China	22,700	Manufacturing of mid-size motors
Nidec Vietnam Corporation (2)	China	21,740	Manufacturing of fan motors
Nidec Sankyo Vietnam Corporation(2)	Vietnam	20,824	Manufacturing of stepping motors
Nidec Sankyo (Fuzhou) Co., Ltd. (2)	China	20,540	Manufacturing of optical pickup units
Nidec-Shimpo (Zhejiang) Co., Ltd.	China	20,310	Manufacturing of power transmission drives
Nidec Precision (Thailand) Co., Ltd. Ayutthaya Factory (1)	Thailand	19,560	Manufacturing of components for precision motors
Nidec Sankyo Electronics (Shaoguan) Co., Ltd.	China	19,548	Manufacturing of motor-driven actuator units
Nidec System Engineering (Zhejiang) Corporation	China	17,390	Manufacturing of various system equipment
Nidec Sankyo (H.K.) Co., Limited Shanghan Electric Plant (4)	China	16,000	Manufacturing of DC motors
Nidec Shibaura Electronics (Thailand) Co., Ltd.(1)	Thailand	15,715	Manufacturing of mid-size motors

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Facility name	Location	Floor space (square meters)	Principal products and function
PT. Japan Servo Batam(1)	Indonesia	14,700	Manufacturing of mid-size motors
Changzhou Servo Motors Co., Ltd.(1)	China	14,220	Manufacturing of mid-size motors
Nidec Pigeon (H.K.) Co., Ltd. Dong Bao Precision Factory (4)	China	14,254	Manufacturing and sales of mechanism for audio
Nidec Automobile Motor (Zhejiang) Corporation (4)	China	13,745	Manufacturing of motors for automobiles
Nidec Power Motor (Zhejiang) Co., Ltd. (2)	China	13,500	Manufacturing of industrial mid-size motors
Nidec Sankyo (Zhejiang) Corporation (4)	China	13,383	Manufacturing of motor-driven actuator units
Nidec Copal Philippines Corporation (2)	Philippines	13,219	Manufacturing of precision mini-motors, press stamping parts, molding parts and surface treatment processing parts
Nidec Nissin (Dalian) Corporation (4)	China	13,260	Manufacturing of engineering plastic dies and moldings
Nidec Sankyo Singapore Pte. Ltd. Batam Factory (4)	Indonesia	13,045	Manufacturing of stepping motors and motor-driven actuator units

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.

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, Machida, Osaka, Nagoya, Fukuoka, Zama and Hiroshima.

As of March 31, 2008, the aggregate book value of the land and buildings we owned was ¥95.6 billion, and the aggregate book value of machinery and equipment we owned was ¥ 92.0 billion. In addition to the property we own, we lease other equipment used in our operations.

Item 4A. Unresolved Staff Comments

We are a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). There are no written comments which have been provided by the staff of the Securities and Exchange Commission (the “SEC” or the “Commission”) regarding our periodic reports under the Exchange Act not less than 180 days before the end of the fiscal year ended March 31, 2008 and which remain unresolved as of the date of the filing of this Form 20-F with the Commission.

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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 consolidated financial statements and other information included 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 under Item 3.D and elsewhere in this annual report.

Overview

Effects of Our Recent Acquisitions Activities on Our Financial Statements

As discussed under Item 4.A of this annual report, we have sought growth by investing in, or acquiring 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. In the past years, we have acquired substantial interests in a number of major companies, several of which were public companies in Japan.

On November 8, 2006, we acquired a 98.9% share in Fujisoku Corporation (“FSKC”). FSKC manufactures and sells industrial switches, memory cards, panel switches and electronic measuring instruments.

On December 27, 2006, we acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France. As part of the acquisition of the Motors & Actuators business of Valeo S.A, we acquired all shares of the companies listed below, and therefore, from the acquisition date, we started consolidating them in our financial statements.

•

Nidec Motors & Actuators

•

Nidec Motors & Actuators (Germany) GmbH

•

NMA Property Verwaltungsgesellschaft mbH

•

Nidec Motors & Actuators (Poland) Sp.Z o.o.

•

Nidec Motors & Actuators (Spain) S.A.

•

Nidec Motors & Actuators (USA) INC.

•

Nidec Motors & Actuators (Mexico) S. de R.L. de C.V.

The NMA group manufactures motors and actuators for automobiles, such as air flow systems, body closure systems, occupant positioning systems and brake systems.

On February 23, 2007, we acquired a 87.1% share in Brilliant Manufacturing Limited (“BML”). BML is engaged in manufacturing and sales of base plate die-casting and top cover used in hard disk drives. By acquiring BML, we increased our manufacturing capability in Asia.

On April 27, 2007, we acquired a 51.8% share in Japan Servo Co., Ltd. (“Japan Servo”). Japan Servo has long been engaged in the manufacture and sale of small motors and motor applied products.

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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. 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.

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, you should read Item 11 “Quantitative and Qualitative Disclosure About Market Risk” and Note 21 to our consolidated financial statements included in this annual report.

39

Results of Operations – Year Ended March 31, 2008 Compared to Year Ended March 31, 2007

The following table sets forth selected information relating to our income and expense items for each of the three years in the period ended March 31, 2008.

	Yen in millions						U.S. dollars in thousands
	For the year ended March 31						For the year ended March 31,
	2006		2007		2008		2008
Net sales	¥ 536,858		¥ 629,667		¥ 742,126		$ 7,407,186
Operating expenses:
Cost of products sold	413,012		486,627		583,910		5,828,027
Selling, general and administrative expenses	41,188		46,276		51,283		511,857
Research and development expenses	29,232		32,755		30,100		300,429
	483,432		565,658		665,293		6,640,313
Operating income	53,426		64,009		76,833		766,873
Other income (expense):
Interest and dividend income	1,664		2,565		2,930		29,244
Interest expense	(1,362	)	(2,022	)	(2,421	)	(24,164	)
Foreign exchange gain (loss), net	7,866		1,757		(14,110	)	(140,832	)
Gain from marketable securities, net	3,869		943		454		4,531
Other, net	(1,085	)	(1,657	)	(1,003	)	(10,011	)
	10,952		1,586		(14,150	)	(141,232	)
Income before income taxes	64,378		65,595		62,683		625,641
Income taxes	(15,213	)	(17,460	)	(15,484	)	(154,546	)
Income before minority interest and equity in earnings of affiliated companies	49,165		48,135		47,199		471,095
Minority interest in income of consolidated companies	8,170		8,130		6,082		60,704
Equity in net losses (income) of affiliated companies	46		73		(39	)	(389	)
Net income	¥ 40,949		¥ 39,932		¥ 41,156		$ 410,780

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Results of Operations – Year Ended March 31, 2008 Compared to Year Ended March 31, 2007

Net Sales

	(Yen in millions)
	2007	2008	Inc/Dec		%
Net sales:
Small precision motors:
Hard disk drives spindle motors	¥ 198,196	¥ 223,068	¥ 24,872		12.5	%
Other small precision brushless DC motors	74,445	92,359	17,914		24.1
Brushless DC fans	38,656	46,525	7,869		20.4
Other small precision motors *	6,684	23,730	17,046		255.0
Sub-total	317,981	385,682	67,701		21.3
Mid-size motors	57,389	96,377	38,988		67.9
Machinery	82,944	73,253	(9,691	)	(11.7	)
Electronic and optical components	144,651	159,266	14,615		10.1
Others	26,702	27,548	846		3.2
Consolidated total	¥ 629,667	¥ 742,126	¥ 112,459		17.9	%

* “Small precision brush DC motors” was changed to “Other small precision motors” from the beginning of this year because the diversity of the products increased.

Details are described by segment below.

Our net sales increased ¥112,459 million, or 17.9%, from ¥629,667 million for the year ended March 31, 2007 to ¥742,126 million for the year ended March 31, 2008. This increase was due mainly to the impact of the newly consolidated subsidiaries and small precision motors, especially hard disk drives spindle motors.

Net sales of Fujisoku Corporation, which has been consolidated since November 2006, is included in “Electronic and optical components”. Nidec Motors & Actuators and its group companies, which have been consolidated since December 2006, are included in “Mid-size motors”. Brilliant Manufacturing Limited and its subsidiaries, which have been consolidated since February 2007, are included in “Small precision motors”. Japan Servo Co., Ltd. and its subsidiaries, which have been consolidated since April 2007, are included in “Small precision motors”.

(Small precision motors)

Net sales of small precision motors increased ¥67,701 million, or 21.3%, from ¥317,981 million for the year ended March 31, 2007 to ¥385,682 million for the year ended March 31, 2008. Net sales of each product included in “small precision motors” are as shown below.

Hard disk drives spindle motors

Net sales of our hard disk drives spindle motors increased ¥24,872 million, or 12.5%, from ¥198,196 million for the year ended March 31, 2007 to ¥223,068 million for the year ended March 31, 2008. Sales volume of hard disk drives spindle motors increased by 16.0% compared to the previous fiscal year. This increase was primarily due to an increase in net sales of spindle motors for 2.5-inch and 3.5-inch hard disk drives. Sales volumes of the motors for 2.5-inch and 3.5-inch hard disk drives increased by 18.7% and 16.2%, respectively. The yen-based average sales price decreased 3.0% in comparison to the previous fiscal year, however, the yen appreciated against the U.S. dollar by 2.3% during the same period. Therefore, in effect, the dollar-based sales prices declined almost 1.0%.

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This was mainly due to a decrease in the average price of motors for 2.5-inch hard disk drives, approximately 1.5% on a dollar basis, in spite of an increase in the average price of 3.5-inch hard disk drives, approximately 1% on a dollar basis.

Net sales of hard disk drives spindle motors accounted for 31.5% of total net sales for the year ended March 31, 2007 and 30.1% of total net sales for the year ended March 31, 2008.

Other small precision brushless DC motors

Net sales of our other small precision brushless DC motors increased ¥17,914 million, or 24.1%, from ¥74,445 million for the year ended March 31, 2007 to ¥92,359 million for the year ended March 31, 2008. Excluding the contribution from newly consolidated companies, net sales of other small precision brushless DC motors increased ¥6,099 million or 8.2%, from ¥74,445 million for the year ended March 31, 2007 to ¥80,544 million for the year ended March 31, 2008. This increase was primarily due to an increase in net sales of stepping motors and brushless DC motors for optical disk drives.

Net sales of our other small precision brushless DC motors accounted for 11.8% of total net sales for the year ended March 31, 2007 and 12.4% of total net sales for the year ended March 31, 2008.

Brushless DC fans

Net sales of brushless DC fans increased ¥7,869 million, or 20.4%, from ¥38,656 million for the year ended March 31, 2007 to ¥46,525 million for the year ended March 31, 2008. This increase was primarily due to an increase in the contribution from newly consolidated companies. Excluding the contribution from newly consolidated companies, net sales of brushless DC fans slightly increased ¥721 million or 1.9%, from ¥38,656 million for the year ended March 31, 2007 to ¥39,377 million for the year ended March 31, 2008.

Net sales of brushless DC fans accounted for 6.1% of total net sales for the year ended March 31, 2007 and 6.3% of total net sales for the year ended March 31, 2008.

Other small precision motors

Net sales of other small precision motors increased ¥17,046 million, or 255.0%, from ¥6,684 million for the year ended March 31, 2007 to ¥23,730 million for the year ended March 31, 2008. This increase was primarily due to an increase in the contribution from newly consolidated companies. Excluding this contribution, net sales of other small precision motors increased slightly ¥66 million or 1.0%, from ¥6,684 million for the year ended March 31, 2007 to ¥6,750 million for the year ended March 31, 2008.

Net sales of other small precision motors accounted for 1.1% of total net sales for the year ended March 31, 2007 and 3.2% of total net sales for the year ended March 31, 2008.

(Mid-size motors)

Net sales of our mid-size motors increased ¥38,988 million, or 67.9%, from ¥57,389 million for the year ended March 31, 2007 to ¥96,377 million for the year ended March 31, 2008. Excluding the contribution from newly consolidated companies, net sales of mid-size motors increased ¥11,724 million or 24.3%, from ¥48,306 million for the year ended March 31, 2007 to ¥60,030 million for the year ended March 31, 2008. This increase was primarily due to an increase in net sales of motors for automobiles such as power steering systems, and for home appliances such as air conditioners.

Net sales of our mid-size motors accounted for 9.1% of our total net sales for the year ended March 31, 2007 and 13.0% of total net sales for the year ended March 31, 2008.

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(Machinery)

Net sales of our machinery decreased ¥9,691 million, or 11.7%, from ¥82,944 million for the year ended March 31, 2007 to ¥73,253 million for the year ended March 31, 2008. This decrease was primarily due to decreases in sales of industrial robots, card readers and high-speed pressing machines, affected by a lower demand resulting from the decreased capital investment by our customers, which offset an increase in net sales of factory automation equipment and semiconductor manufacturing equipment.

Net sales of our machinery accounted for 13.2% of our total net sales for the year ended March 31, 2007 and 9.9% of total net sales for the year ended March 31, 2008.

(Electronic and optical components)

Net sales of our electronic and optical components increased ¥14,615 million, or 10.1%, from ¥144,651 million for the year ended March 31, 2007 to ¥159,266 million for the year ended March 31, 2008. Excluding the contribution from newly consolidated companies, net sales of electronic and optical components increased ¥10,698 million or 7.6%, from ¥141,670 million for the year ended March 31, 2007 to ¥152,368 million for the year ended March 31, 2008. This increase was primary due to an increase in net sales of optical components such as shutters for mobile phones and digital cameras, and electronic components for amusement machines.

Net sales of our electronic and optical components accounted for 23.0% of our total net sales for the year ended March 31, 2007 and 21.5% of total net sales for the year ended March 31, 2008.

(Others)

Net sales of our other products increased ¥846 million, or 3.2%, from ¥26,702 million for the year ended March 31, 2007 to ¥27,548 million for the year ended March 31, 2008. This increase was primarily due to an increase in net sales of automobile parts.

Cost of Products Sold

Our cost of products sold increased ¥97,283 million, or 20.0%, from ¥486,627 million for the year ended March 31, 2007 to ¥583,910 million for the year ended March 31, 2008. Excluding the contribution from the newly consolidated companies, our cost of products sold increased ¥33,810 million, or 7.1% from ¥476,004 million for the year ended March 31, 2007 to ¥509,814 million for the year ended March 31, 2008. This increase was primarily due to the increase in sales volume and a negative impact from changes in exchange rates.

As a percentage of net sales, cost of sales increased from 77.3% for the year ended March 31, 2007 to 78.7% for the year ended March 31, 2008.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses increased ¥5,007 million, or 10.8%, from ¥46,276 million for the year ended March 31, 2007 to ¥51,283 million for the year ended March 31, 2008. Excluding the contribution from the newly consolidated companies, our selling, general and administrative expenses decreased ¥1,754 million, or 3.9% from ¥45,340 million for year ended March 31, 2007 to ¥43,586 million for the year ended March 31, 2008. This decrease was mainly due to a non-recurring gain, a decrease in legal fees, a decrease in commission fees and an increase in the gain resulting from the sales of fixed assets compared to the year ended March 31, 2007.

As a percentage of net sales, selling, general and administrative expenses decreased from 7.3% for the year ended March 31, 2007 to 6.9% for the year ended March 31, 2008.

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Research and Development Expenses

Our research and development expenses decreased ¥2,655 million, or 8.1%, from ¥32,755 million for the year ended March 31, 2007 to ¥30,100 million for the year ended March 31, 2008. Excluding the contribution from the newly consolidated companies, our research and development expenses decreased ¥4,839 million, or 15.1% from ¥32,128 million for the year ended March 31, 2007 to ¥27,289 million for the year ended March 31, 2008. This decrease was primarily due to a decrease in research and development expenses related to mid-sized motors due to the commencement of mass production.

As a percentage of net sales, research and development expenses decreased from 5.2% for the year ended March 31, 2007 to 4.0% for the year ended March 31, 2008.

Operating Income

As a result of the foregoing factors, our operating income increased ¥12,824 million, or 20.0%, from ¥64,009 million for the year ended March 31, 2007 to ¥76,833 million for the year ended March 31, 2008.

As a percentage of net sales, operating income increased from 10.2% for the year ended March 31, 2007 to 10.4% for the year ended March 31, 2008.

Other Income (Expenses)

We had other income in the amount of ¥1,586 million for the year ended March 31, 2007, while we incurred other expenses in the amount of ¥14,150 million for year ended March 31, 2008. This change was mainly due to foreign exchange losses.

We had foreign exchange gain in the amount of ¥1,757 million for the year ended March 31, 2007, while we incurred foreign exchange losses in the amount of ¥14,110 million for the year ended March 31, 2008. This was principally due to the appreciation in the value of the yen against relevant foreign currencies compared to the same period of the previous fiscal year. The exchange rate of the yen against the U.S. dollar as of March 31, 2006, 2007 and 2008 was ¥117.47, ¥118.05 and ¥100.19, respectively.

Gains from marketable securities, net decreased ¥489 million from ¥943 million for the year ended March 31, 2007 to ¥454 million for the year ended March 31, 2008. This decrease was mainly due to a decrease in gain from the sales of marketable securities as compared to the year ended March 31, 2007.

Income before Income Taxes

As a result of the foregoing, our income before income taxes decreased ¥2,912 million, or 4.4%, from ¥65,595 million for the year ended March 31, 2007 to ¥62,683 million for the year ended March 31, 2008.

Income Taxes

Our income taxes decreased ¥1,976 million, or 11.3%, from ¥17,460 million for the year ended March 31, 2007 to ¥15,484 million for the year ended March 31, 2008.

The effective income tax rate for the year ended March 31, 2008 was lower compared to the effective income tax rate for the year ended March 31, 2007. The main reason for this decrease was the net impact of the decrease in the effective tax rate of valuation allowance and tax benefit in foreign subsidiaries and the adoption of FIN 48 as well as the effects of transfer pricing taxation paid for the prior year. For the year ended March 31, 2007, Nidec incurred an additional tax expense of approximately ¥2,850 million as a result of an examination by the tax authority in relation to transfer pricing. There was no such impact in the current year. This decrease in tax expense was partially offset by the impact of FIN 48 in the current year.

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Minority Interest in Income of Consolidated Subsidiaries

Minority interest in income of our consolidated subsidiaries decreased ¥2,048 million, or 25.2%, from ¥8,130 million for the year ended March 31, 2007 to ¥6,082 million for the year ended March 31, 2008. Excluding the contribution from the newly consolidated companies, minority interest in income of our consolidated subsidiaries decreased ¥2,925 million, or 36.0% from ¥8,130 million for the year ended March 31, 2007 to ¥5,205 million for the year ended March 31, 2008. Minority interests of group companies such as Nidec Sankyo Corporation and certain of its subsidiaries decreased ¥3,254 million due primarily to a decrease in their profitability, which more than offset an increase in minority interests in income of other companies such as Nidec Copal Corporation and certain of its subsidiaries.

Equity in Net Losses (Income) of Affiliated Companies

We incurred equity in net loss of affiliated companies in the amount of ¥73 million for the year ended March 31, 2007, while we had equity in net income of affiliated companies in the amount of ¥39 million for the year ended March 31, 2008.

Net Income

As a result of the foregoing, our net income increased ¥1,224 million, or 3.1%, from ¥39,932 million for the year ended March 31, 2007 to ¥41,156 million for the year ended March 31, 2008.

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Results of Operations – Year Ended March 31, 2007 Compared to Year Ended March 31, 2006

Net Sales

	(Yen in millions)
	2006	2007	Inc/Dec		%
Net sales:
Small precision motors:
Hard disk drives spindle motors	¥ 164,575	¥ 198,196	¥ 33,621		20.4	%
Other small precision brushless DC motors	66,463	74,445	7,982		12.0
Brushless DC fans	34,872	38,656	3,784		10.9
Other small precision motors *	7,849	6,684	(1,165	)	(14.8	)
Sub-total	273,759	317,981	44,222		16.2
Mid-size motors	37,767	57,389	19,622		52.0
Machinery	73,243	82,944	9,701		13.2
Electronic and optical components	128,791	144,651	15,860		12.3
Others	23,298	26,702	3,404		14.6
Consolidated total	¥ 536,858	¥ 629,667	¥ 92,809		17.3	%

* “Small precision brush DC motors” was changed to “Other small precision motors” from the beginning of fiscal year ended March 31, 2008 because the diversity of the products increased.

Details are described by segment below.

(Small precision motors)

Hard disk drives spindle motors

Net sales of our hard disk drives spindle motors increased ¥33,621million, or 20.4%, from ¥164,575 million for the year ended March 31, 2006 to ¥198,196 million for the year ended March 31, 2007. Sales volume of hard disk drives spindle motors increased by 21.9% compared to the same period of the previous fiscal year. This increase was primarily due to an increase in net sales of 2.5-inch disk drives motors and 3.5-inch disk drives motors, reflecting strong demand in the information technology industry and consumer electronics.

Net sales of hard disk drives spindle motors accounted for 30.7% of total net sales for the year ended March 31, 2006 and 31.5% of total net sales for the year ended March 31, 2007.

Other small precision brushless DC motors

Net sales of our other small precision brushless DC motors increased ¥7,982 million, or 12.0%, from ¥66,463 million for the year ended March 31, 2006 to ¥74,445 million for the year ended March 31, 2007. This increase was primarily due to an increase in sales of brushless DC motors for optical disk drives, office equipment and home appliances.

Net sales of our other small precision brushless DC motors accounted for 12.4% of total net sales for the year ended March 31, 2006 and 11.8% of total net sales for the year ended March 31, 2007.

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Brushless DC fans

Net sales of our brushless DC fans increased ¥3,784 million, or 10.9%, from ¥34,872 million for the year ended March 31, 2006 to ¥38,656 million for the year ended March 31, 2007.

Net sales of our brushless DC fans accounted for 6.5% of total net sales for the year ended March 31, 2006 and 6.1% of total net sales for the year ended March 31, 2007.

Other small precision motors

Net sales of our other small precision motors decreased ¥1,165 million, or 14.8%, from ¥7,849 million for the year ended March 31, 2006 to ¥6,684 million for the year ended March 31, 2007.

Net sales of our other small precision motors accounted for 1.4% of total net sales for the year ended March 31, 2006 and 1.1% of total net sales for the year ended March 31, 2007.

(Mid-size motors)

Net sales of our mid-size motors increased ¥19,622 million, or 52.0%, from ¥37,767 million for the year ended March 31, 2006 to ¥57,389 million for the year ended March 31, 2007. This increase was primarily due to an increase in net sales of motors for automobiles and for home appliances such as air conditioners. The increase of motors for automobiles includes the net sales of Nidec Motors & Actuators, which we acquired during the year ended March 31, 2007, of ¥9,082 million.

Net sales of our mid-size motors accounted for 7.0% of our total net sales for the year ended March 31, 2006 and 9.1% of total net sales for the year ended March 31, 2007.

(Machinery)

Net sales of our machinery increased ¥9,701 million, or 13.2%, from ¥73,243 million for the year ended March 31, 2006 to ¥82,944 million for the year ended March 31, 2007. This increase was primarily due to an increase in net sales of power transmission drives, card readers and high-speed pressing machines, reflecting the effect of new products and strong demand from increased capital investment by our customers.

Net sales of our machinery accounted for 13.6% of our total net sales for the year ended March 31, 2006 and 13.2% of total net sales for the year ended March 31, 2007.

(Electronic and optical components)

Net sales of our electronic and optical components increased ¥15,860 million, or 12.3%, from ¥128,791 million for the year ended March 31, 2006 to ¥144,651 million for the year ended March 31, 2007. This increase was primarily due to an increase in net sales of optical component such as shutters and lens units for digital cameras and mobile phones, offsetting a decrease in the net sales of optical pickup units. Net sales of electronic circuit also increased, including the net sales of Fujisoku Corporation which we acquired during the year ended March 31, 2007.

Net sales of our electronic and optical components accounted for 24.0% of our total net sales for the year ended March 31, 2006 and 23.0% of total net sales for the year ended March 31, 2007.

(Others)

Net sales of our other products increased ¥3,404 million, or 14.6%, from ¥23,298 million for the year ended March 31, 2006 to ¥26,702 million for the year ended March 31, 2007. This increase was primarily due to an increase in net sales of pivot assemblies.

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Cost of Products Sold

Our cost of products sold increased ¥73,615 million, or 17.8%, from ¥413,012 million for the year ended March 31, 2006 to ¥486,627 million for the year ended March 31, 2007 due primarily to increased sales. As a percentage of net sales, cost of sales increased from 76.9% for the year ended March 31, 2006 to 77.3% for the year ended March 31, 2007.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses increased ¥5,088 million, or 12.4%, from ¥41,188 million for the year ended March 31, 2006 to ¥46,276 million for the year ended March 31, 2007. This increase was due to increases in salaries, bonuses and loss on fixed assets, which more than offset decreases in loss on bad debts for the year ended March 31, 2006, when there was the insolvency of AgfaPhoto GmbH. As a percentage of net sales, selling, general and administrative expenses decreased from 7.7% for the year ended March 31, 2006 to 7.3% for the year ended March 31, 2007.

Research and Development Expenses

Our research and development expenses increased ¥3,523 million, or 12.1%, from ¥29,232 million for the year ended March 31, 2006 to ¥32,755 million for the year ended March 31, 2007. This was primarily due to an increase in expenses for our research and development related to mid-sized motors, mainly used for automobile steering systems, and hard disk spindle motors. As a percentage of net sales, research and development expenses decreased from 5.4% for the year ended March 31, 2006 to 5.2% for the year ended Mach 31, 2007.

Operating Income

As a result of the foregoing factors, our operating income increased ¥10,583 million, or 19.8%, from ¥53,426 million for the year ended March 31, 2006 to ¥64,009 million for the year ended March 31, 2007. As a percentage of net sales, operating income increased from 10.0% for the year ended March 31, 2006 to 10.2% for the year ended March 31, 2007.

Other Income (Expenses)

Other income decreased ¥9,366 million, or 85.5%, from ¥10,952 million for the year ended March 31, 2006 to ¥1,586 million for the year ended March 31, 2007.

Interest and dividend income increased ¥901 million from ¥1,664 million for the year ended March 31, 2006 to ¥2,565 million for the year ended March 31, 2007. This was primarily due to interest income attributable to the increased average balance of our foreign currency deposits and increases in interest rates.

Interest expense increased ¥660 million from ¥1,362 million for the year ended March 31, 2006 to ¥2,022 million for the year ended March 31, 2007. This was primarily due to an increase of our borrowings for M&A transactions, additional investment in subsidiaries and increased interest rates.

Gain from marketable securities, net decreased ¥2,926 million from ¥3,869 million for the year ended March 31, 2006 to ¥943 million for the year ended March 31, 2007. This decrease was mainly due to a decrease in gain on the sales of marketable securities as compared with the year ended March 31, 2006. This decrease primarily relates to the gain of ¥1,123 million based on the business combination of Mitsubishi Tokyo Financial Group, Inc. and UFJ Holdings, Inc., during fiscal year ended March 31, 2006. We recognized this gain in accordance with Emerging Issues Task Force 91-5 (“EITF 91-5”).

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Foreign exchange gain decreased ¥6,109 million from ¥7,866 million for year ended March 31, 2006 to ¥1,757 million for the year ended March 31, 2007. This was principally due to depreciation in the value of the yen against relevant foreign currencies in the fiscal year 2006 compared to the same period of the previous fiscal year. The exchange rate of the yen against the U.S. dollar as of March 31, 2005, 2006 and 2007 was ¥107.39, ¥117.47 and ¥118.05, respectively.

Income before Income Taxes

As a result of the foregoing, our income before income taxes increased ¥1,217 million, or 1.9%, from ¥64,378 million for the year ended March 31, 2006 to ¥65,595 million for the year ended March 31, 2007.

Income Taxes

Our income taxes increased ¥2,247 million, or 14.8%, from ¥15,213 million for the year ended March 31, 2006 to ¥17,460 million for the year ended March 31, 2007.

The effective income tax rate for the year ended March 31, 2007 was higher compared to the effective income tax rate for the year ended March 31, 2006. This was mainly due to the effect of additional tax expenses based on transfer price taxation of ¥2,850 million.

Minority Interest in Income of Consolidated Subsidiaries

Minority interest in income of our consolidated subsidiaries decreased ¥40 million, or 0.5%, from ¥8,170 million for the year ended March 31, 2006 to ¥8,130 million for the year ended March 31, 2007. Minority interest of group companies such as Nidec Sankyo Corporation and certain of its subsidiaries decreased ¥852 million due primarily to a decrease in their profitability, which more than offset an increase in minority interest in income of other companies such as Nidec Copal Corporation and certain of its subsidiaries of ¥812 million. As a result, minority interest in income of consolidated subsidiaries decreased slightly.

Equity in Net Losses of Affiliated Companies

Equity in net losses of our affiliated companies increased ¥27 million, or 58.7%, from ¥46 million for the year ended March 31, 2006 to ¥73 million for the year ended March 31, 2007.

Net Income

As a result of the foregoing, our net income decreased ¥1,017 million, or 2.5%, from ¥40,949 million for the year ended March 31, 2006 to ¥39,932 million for the year ended March 31, 2007.

Segment Information

Based on the applicable criteria set forth in the Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”), we have sixteen reportable operating segments on which we report in our consolidated financial statements. These reportable operating segments are legal entities. One of them is Nidec Corporation, while the others are Nidec’s fifteen consolidated subsidiaries: 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, Japan Servo Co., Ltd., Nidec Shibaura Corporation, Nidec-Shimpo Corporation, Nidec Motors & Actuators, and Nidec Nissin Corporation. For the information required by SF AS No. 131, see Note 25 to our consolidated financial statements included in this annual report.

49

Nidec acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France (“NMA”) in December 2006. As the materiality of the segment increased, NMA has been identified as a reportable operating segment since the three months ended June 30, 2007. Segment information for the year ended March 31, 2007 has been restated to conform to the current presentation. In addition, Nidec acquired a majority of the voting rights of Japan Servo Co., Ltd. (“JSRV”) in April 2007. JSRV has been identified as a reportable operating segment since the six months ended September 30, 2007.

We evaluate our financial performance based on segmental profit and loss, which consists of sales and operating revenues less operating expenses. Segmental profit or loss is determined using the accounting principles in the segment’s country of domicile. Nidec Corporation, Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec Tosok Corporation, Nidec Copal Electronics Corporation, Japan Servo Co. Ltd., Nidec Shibaura Corporation, Nidec-Shimpo Corporation, and Nidec Nissin Corporation apply Japanese GAAP. Nidec Electronics (Thailand) Co., Ltd. applies Thai accounting principles. Nidec (Zhejiang) Corporation and Nidec (Dalian) Limited apply Chinese accounting principles. Nidec (H.K.) Co., Ltd. applies Hong Kong accounting principles. Nidec Singapore Pte. Ltd. applies Singaporean accounting principles, Nidec Philippines Corporation applies Philippine accounting principles and Nidec Motors & Actuators applies mainly Inter national Financial Reporting Standards (“IFRS”). Thus, 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. While there are several differences between U.S. GAAP and the underlying accounting principles used by the operating segments, the principal differences that affect segmental operating profit or loss are accounting for pension and severance costs, directors’ bonuses and leases. We believe that the monthly segmental information is available on a timely basis and that it is sufficiently accurate at the segment profit and loss level for us to manage our business.

The first of the following two tables shows revenues from external customers and other operating segments by reportable operating segment for the years ended March 31, 2006, 2007 and 2008. The second table shows operating profit or loss by reportable operating segment, which includes intersegment revenues, for the years ended March 31, 2006, 2007 and 2008:

	Year ended March 31
	2006	2007	2008	2008
	(Yen in millions and U.S. dollars in thousands)
Nidec
External revenues	¥ 68,613	¥ 89,466	¥ 88,954	$ 887,853
Intersegment revenues	99,607	91,130	100,299	1,001,088
Sub total	168,220	180,596	189,253	1,888,941
Nidec Electronics (Thailand)
External revenues	47,745	67,754	95,859	956,772
Intersegment revenues	29,732	21,486	32,334	322,727
Sub total	77,477	89,240	128,193	1,279,499
Nidec (Zhejiang)
External revenues	¥ 14,995	¥ 14,802	¥ 14,161	$ 141,341
Intersegment revenues	4,377	5,371	10,776	107,556
Sub total	19,372	20,173	24,937	248,897
Nidec (Dalian)
External revenues	3,044	3,637	4,190	41,821
Intersegment revenues	45,629	46,828	43,849	437,658
Sub total	48,673	50,465	48,039	479,479

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	Year ended March 31
	2006	2007	2008	2008
	(Yen in millions and U.S. dollars in thousands)
Nidec Singapore
External revenues	62,009	49,877	45,472	453,858
Intersegment revenues	1,179	347	227	2,266
Sub total	63,188	50,224	45,699	456,124
Nidec (H.K.)
External revenues	24,600	34,738	39,359	392,844
Intersegment revenues	2,702	4,344	4,298	42,898
Sub total	27,302	39,082	43,657	435,742
Nidec Philippines
External revenues	1,186	5,382	5,833	58,219
Intersegment revenues	31,121	42,845	40,649	405,719
Sub total	32,307	48,227	46,482	463,938
Nidec Sankyo
External revenues	70,195	64,907	58,475	583,641
Intersegment revenues	17,977	13,109	13,589	135,632
Sub total	88,172	78,016	72,064	719,273
Nidec Copal
External revenues	46,408	63,008	63,779	636,580
Intersegment revenues	8,977	8,460	6,594	65,815
Sub total	55,385	71,468	70,373	702,395
Nidec Tosok
External revenues	22,081	22,310	25,769	257,201
Intersegment revenues	407	357	293	2,924
Sub total	22,488	22,667	26,062	260,125
Nidec Copal Electronics
External revenues	19,151	19,849	22,392	223,495
Intersegment revenues	2,642	3,133	4,177	41,691
Sub total	21,793	22,982	26,569	265,186
Japan Servo
External revenues	-	-	25,378	253,299
Intersegment revenues	-	-	3,549	35,423
Sub total	-	-	28,927	288,722
Nidec Shibaura
External revenues	13,502	16,146	17,286	172,532
Intersegment revenues	2,702	3,439	3,633	36,261
Sub total	16,204	19,585	20,919	208,793
Nidec-Shimpo
External revenues	9,619	10,748	11,163	111,418
Intersegment revenues	1,514	2,448	2,455	24,503
Sub total	11,133	13,196	13,618	135,921
Nidec Motors & Actuators
External revenues	-	9,079	36,352	362,831
Intersegment revenues	-	-	284	2,835
Sub total	-	9,079	36,636	365,666

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	Year ended March 31
	2006		2007		2008		2008
	(Yen in millions and U.S. dollars in thousands)
Nidec Nissin
External revenues	12,022		10,895		10,847		108,264
Intersegment revenues	907		762		826		8,244
Sub total	12,929		11,657		11,673		116,508
All Others
External revenues	120,041		139,338		171,824		1,714,983
Intersegment revenues	182,093		203,616		235,225		2,347,790
Sub total	302,134		342,954		407,049		4,062,773
Total
External revenues	535,211		621,936		737,093		7,356,952
Intersegment revenues	431,566		447,675		503,057		5,021,030
Adjustments(*)	1,647		7,731		5,033		50,234
Intersegment elimination	(431,566	)	(447,675	)	(503,057	)	(5,021,030	)
Consolidated total (net sales)	¥ 536,858		¥ 629,667		¥ 742,126		$ 7,407,186

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

		Year ended March 31
		2006		2007	2008		2008
		(Yen in millions and U.S. dollars in thousands)
Segment profit or loss:
	Nidec	¥ 8,852		¥ 11,241	¥ 13,980		$ 139,535
	Nidec Electronics (Thailand)	11,335		10,822	12,606		125,821
	Nidec (Zhejiang)	108		275	1,040		10,380
	Nidec (Dalian)	3,718		4,560	4,720		47,110
	Nidec Singapore	1,205		1,545	1,231		12,287
	Nidec (H.K.)	347		386	576		5,749
	Nidec Philippines	1,059		4,407	4,129		41,212
	Nidec Sankyo	9,050		7,109	5,053		50,434
	Nidec Copal	2,524		4,056	3,415		34,085
	Nidec Tosok	435		1,430	1,643		16,399
	Nidec Copal Electronics	2,949		2,688	3,631		36,241
	Japan Servo	-		-	372		3,713
	Nidec Shibaura	(274	)	136	(97	)	(968	)
	Nidec-Shimpo	498		1,412	1,182		11,798
	Nidec Motors & Actuators	-		59	555		5,539
	Nidec Nissin	683		545	610		6,088
	All Others	12,179		12,251	21,997		219,554
	Total	54,668		62,922	76,643		764,977
	Adjustments (*)	(1,242	)	1,087	190		1,896
	Consolidated total	¥ 53,426		¥ 64,009	¥ 76,833		$ 766,873

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

Net sales of Nidec increased ¥8,657 million, or 4.8%, from ¥180,596 million for the year ended March 31, 2007 to ¥189,253 million for the year ended March 31, 2008. This increase of net sales resulted primarily from an increase in net sales of our core business, hard disk drives spindle motors, reflecting strong demand in the information technology industry.

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External revenues of Nidec decreased ¥512 million, or 0.6%, from ¥89,466 million for the year ended March 31, 2007 to ¥88,954 million for the year ended March 31, 2008. Intersegment revenues of Nidec increased ¥9,169 million, or 10.1%, from ¥91,130 million for the year ended March 31, 2007 to ¥100,299 million for the year ended March 31, 2008. Operating profit of Nidec increased ¥2,739 million, or 24.4%, from ¥11,241 million for the year ended March 31, 2007 to ¥13,980 million for the year ended March 31, 2008. This increase was due primarily to the increase in net sales of hard disk drives spindle motors and an increase in royalty and commission fees from subsidiary companies.

Net sales of Nidec increased ¥12,376 million, or 7.4%, from ¥168,220 million for the year ended March 31, 2006 to ¥180,596 million for the year ended March 31, 2007. External revenues of Nidec increased ¥20,853 million, or 30.4%, from ¥68,613 million for the year ended March 31, 2006 to ¥89,466 million for the year ended March 31, 2007. This increase resulted primarily from an increase in net sales in our core business, hard disk drives spindle motors, reflecting continued strong demand in the information technology and consumer electronics industries. The increase also resulted from an increase in sales of hard disk drives spindle motors as a result of a transfer of a large customer from Singapore to China in the current fiscal year, sales to which were previously made through Nidec Singapore Pte. Ltd. but are now made through direct transactions with Nidec Corporation. Intersegm ent revenues of Nidec decreased ¥8,477 million, or 8.5%, from ¥99,607 million for the year ended March 31, 2006 to ¥91,130 million for the year ended March 31, 2007. This decrease resulted primarily from a decrease in sales of hard disk drives spindle motors to the large customer mentioned above through Nidec Singapore Pte. Ltd.  Operating profit of Nidec increased ¥2,389 million, or 27.0%, from ¥8,852 million for the year ended March 31, 2006 to ¥11,241 million for the year ended March 31, 2007. This increase was due primarily to the increase in net sales of hard disk drives spindle motors and an increase in royalty and commission fees from subsidiary companies.

Net sales of Nidec Electronics (Thailand) Co., Ltd. increased ¥38,953 million, or 43.6%, from ¥89,240 million for the year ended March 31, 2007 to ¥128,193 million for the year ended March 31, 2008 due primarily to an increase in sales volume of hard disk drives spindle motors, and the change in the exchange rate. Operating profit increased ¥1,784 million, or 16.5%, from ¥10,822 million for the year ended March 31, 2007 to ¥12,606 million for the year ended March 31, 2008. This was due primarily to a favorable impact from a change in exchange rates.

Net sales of Nidec Electronics (Thailand) Co., Ltd. increased ¥11,763 million, or 15.2%, from ¥77,477 million for the year ended March 31, 2006 to ¥89,240 million for the year ended March 31, 2007 due primarily to an increase in sales of hard disk drives spindle motors to main customers. Operating profit decreased ¥513 million, or 4.5%, from ¥11,335 million for the year ended March 31, 2006 to ¥10,822 million for the year ended March 31, 2007. This decrease resulted primarily from a delay in cost efficiency improvements in production relative to declines in sales prices.

Net sales of Nidec (Zhejiang) Corporation increased ¥4,764 million, or 23.6%, from ¥20,173 million for the year ended March 31, 2007 to ¥24,937 million for the year ended March 31, 2008. This increase was due mainly to the start of full-scale operation of a large customer’s factory in China. Operating profit increased ¥765 million, or 278.2%, from ¥275 million for the year ended March 31, 2007 to ¥1,040 million for the year ended March 31, 2008, due primarily to an increase in sales and a shift in the business from assembling motors to manufacturing of motors with higher margins.

Net sales of Nidec (Zhejiang) Corporation increased ¥801 million, or 4.1%, from ¥19,372 million for the year ended March 31, 2006 to ¥20,173 million for the year ended March 31, 2007. This increase resulted from increased sales of hard disk drives spindle motors, reflecting strong demand. Operating profit increased ¥167 million, or 154.6%, from ¥108 million for the year ended March 31, 2006 to ¥275 million for the year ended March 31, 2007. The increase in operating profit resulted primarily from a shift to more efficient mass production of our hard disk drives spindle motors.

Net sales of Nidec (Dalian) Limited decreased ¥2,426 million, or 4.8%, from ¥50,465 million for the year ended March 31, 2007 to ¥48,039 million for the year ended March 31, 2008. This decrease was due primarily to a decrease in customer demand for brushless DC fans. However, operating profit increased ¥160 million, or 3.5% from ¥4,560 million for the year ended March 31, 2007 to ¥4,720 million for the year ended March 31, 2008. The major reason for this increase was an increase in sales of other small precision brushless DC motors whose margin is higher than DC fans.

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Net sales of Nidec (Dalian) Limited increased ¥1,792 million, or 3.7%, from ¥48,673 million for the year ended March 31, 2006 to ¥50,465 million for the year ended March 31, 2007. This increase was due primarily to an increase in customer demand for other small precision brushless DC motors used in DVD drives. Operating profit increased ¥842 million, or 22.6% from ¥3,718 million for the year ended March 31, 2006 to ¥4,560 million for the year ended March 31, 2007. This increase was due primarily to improvements in production cost efficiency reflecting more efficient mass production of our other small precision brushless DC motors and fans.

Net sales of Nidec Singapore Pte. Ltd. decreased ¥4,525 million, or 9.0%, from ¥50,224 million for the year ended March 31, 2007 to ¥45,699 million for the year ended March 31, 2008 resulting primarily from a decrease in sales of hard disk drives spindle motors to a large customer, which transferred from Singapore to China. Operating profit of Nidec Singapore Pte. Ltd. decreased ¥314 million, or 20.3%, from ¥1,545 million for the year ended March 31, 2007 to ¥1,231 million for the year ended March 31, 2008, due to an increase in production cost of pivot assemblies.

Net sales of Nidec Singapore Pte. Ltd. decreased ¥12,964 million, or 20.5%, from ¥63,188 million for the year ended March 31, 2006 to ¥50,224 million for the year ended March 31, 2007 resulting primarily from a decrease in sales of hard disk drives spindle motors to a large customer, which transferred from Singapore to China in the year ended March 31, 2007. However, operating profit of Nidec Singapore Pte. Ltd. increased ¥340 million, or 28.2%, from ¥1,205 million for the year ended March 31, 2006 to ¥1,545 million for the year ended March 31, 2007, due to an increase in sales of pivot assemblies with higher margins.

Net sales of Nidec (H.K.) Co., Ltd. increased ¥4,575 million, or 11.7%, from ¥39,082 million for the year ended March 31, 2007 to ¥ 43,657 million for the year ended March 31, 2008. This increase was due primarily to an increase in sales of hard disk drives spindle motors which started in 2006. Operating profit of Nidec (H.K.) Co., Ltd. increased ¥190 million, or 49.2%, from ¥386 million for the year ended March 31, 2007 to ¥ 576 million for the year ended March 31, 2008. This increase was due primarily to an increase in sales of hard disk drives spindle motors and other small precision brushless DC motors.

Net sales of Nidec (H.K.) Co., Ltd. increased ¥11,780 million, or 43.1%, from ¥27,302 million for the year ended March 31, 2006 to ¥39,082 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales of hard disk drives spindle motors and other small precision brushless DC motors to a few customers. Operating profit of Nidec (H.K.) Co., Ltd. increased ¥39 million, or 11.2%, from ¥347 million for the year ended March 31, 2006 to ¥386 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales.

Net sales of Nidec Philippines Corporation decreased ¥1,745 million, or 3.6%, from ¥48,227 million for the year ended March 31, 2007 to ¥46,482 million for the year ended March 31, 2008. This decrease was primarily due to a decrease in sales volume to a customer and a decline in sales price to a customer. Operating profit of Nidec Philippines Corporation decreased ¥278 million, or 6.3%, from ¥4,407 million for the year ended March 31, 2007 to ¥4,129 million for the year ended March 31, 2008. This was due to a delay in cost reduction relative to declines in sales prices.

Net sales of Nidec Philippines Corporation increased ¥15,920 million, or 49.3%, from ¥32,307 million for the year ended March 31, 2006 to ¥48,227 million for the year ended March 31, 2007. This increase resulted primarily from an increase in sales of hard disk drives spindle motors to our main customer in China and a few other main customers through Nidec Corporation.  Operating profit of Nidec Philippines Corporation increased ¥3,348 million, or 316.1%, from ¥1,059 million for the year ended March 31, 2006 to ¥4,407 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales of high-price and high-margin goods, namely 2.5 inch hard disk drives spindle motors, reflecting volume efficiency resulting primarily from the large increase in sales.

Net sales of Nidec Sankyo Corporation decreased ¥5,952 million, or 7.6%, from ¥78,016 million for the year ended March 31, 2007 to ¥72,064 million for the year ended March 31, 2008 due to a decrease in sales of industrial robots reflecting a decrease of customer investment in the LCD panel industry. Operating profit of Nidec Sankyo decreased ¥2,056 million, or 28.9%, from ¥7,109 million for the year ended March 31, 2007 to ¥5,053 million for the year ended March 31, 2008. The major reason for this decrease was a decrease in sales of industrial robots.

54

Net sales of Nidec Sankyo Corporation decreased ¥10,156 million, or 11.5%, from ¥88,172 million for the year ended March 31, 2006 to ¥78,016 million for the year ended March 31, 2007 due primarily to a decrease in sales of optical pickup units by withdrawal from low-margin products. Operating profit of Nidec Sankyo decreased ¥1,941million, or 21.4%, from ¥9,050 million for the year ended March 31, 2006 to ¥7,109 million for the year ended March 31, 2007. The major reason for this decrease was a decrease in sales of industrial robots and a drop in sales prices of stepping motors.

Net sales of Nidec Copal Corporation decreased ¥1,095 million, or 1.5%, from ¥71,468 million for the year ended March 31, 2007 to ¥70,373 million for the year ended March 31, 2008. This was due primarily to a decrease in sales of industrial robots and sensor units for electronic parts mounters, despite an increase in sales of shutters for mobile phones. Operating profit of Nidec Copal Corporation decreased ¥641 million, or 15.8%, from ¥4,056 million for the year ended March 31, 2007 to ¥3,415 million for the year ended March 31, 2008 due primarily to an increase in the production cost of vibration motors and a decrease in sales of industrial robots.

Net sales of Nidec Copal Corporation increased ¥16,083 million, or 29.0%, from ¥55,385 million for the year ended March 31, 2006 to ¥71,468 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales of shutters and lens units for digital cameras and mobile phones reflecting strong customer demand. Operating profit of Nidec Copal Corporation increased ¥1,532 million, or 60.7%, from ¥2,524 million for the year ended March 31, 2006 to ¥4,056 million for the year ended March 31, 2007 due primarily to the increase in sales of shutters and lens units for digital cameras and mobile phones.

Net sales of Nidec Tosok Corporation increased ¥3,395 million, or 15.0%, from ¥22,667 million for the year ended March 31, 2007 to ¥26,062 million for the year ended March 31, 2008. This increase was due primarily to an increase in sales of semiconductor manufacturing equipment reflecting the upturn of the semiconductor industry, and increase in sales of automobile parts reflecting the increase of customer’s demand. Operating profit increased ¥213 million, or 14.9%, from ¥1,430 million for the year ended March 31, 2007 to ¥1,643 million for the year ended March 31, 2008. This increase was due primarily to an increase in sales of semiconductor manufacturing equipment and cost reduction in manufacturing of measuring equipments.

Net sales of Nidec Tosok Corporation increased ¥179 million, or 0.8%, from ¥22,488 million for the year ended March 31, 2006 to ¥22,667 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales of semiconductor manufacturing equipment due to increased customer investment in facilities in the semiconductor industry. Operating profit increased ¥995 million, or 228.7%, from ¥435 million for the year ended March 31, 2006 to ¥1,430 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales and cost efficiency improvements in production of semiconductor manufacturing equipment.

Net sales of Nidec Copal Electronics Corporation increased ¥3,587 million, or 15.6%, from ¥22,982 million for the year ended March 31, 2007 to ¥26,569 million for the year ended March 31, 2008. This increase was primarily due to an increase in sales of actuators, reflecting strong demand in the amusement machines industry.  Operating profit increased ¥943 million, or 35.1%, from ¥2,688 million for the year ended March 31, 2007 to ¥3,631 million for the year ended March 31, 2008 due primarily to an increase in sales of actuators.

Net sales of Nidec Copal Electronics Corporation increased ¥1,189 million, or 5.5%, from ¥21,793 million for the year ended March 31, 2006 to ¥22,982 million for the year ended March 31, 2007. This increase was primarily due to an increase in sales of trimmer potentiometers, switches and pressure sensors, reflecting increased demand in the information technology industry and the semiconductor manufacturing equipment industry. However, operating profit decreased ¥261 million, or 8.9%, from ¥2,949 million for the year ended March 31, 2006 to ¥2,688 million for the year ended March 31, 2007. This increase resulted primarily from an increase in research and development expenses and increased personnel expenses.

55

Net sales and operating profit of Japan Servo were ¥28,927 million and ¥372 million for the year ended March 31, 2008, respectively. Japan Servo has been consolidated since April 2007. The Japan Servo segment comprises Japan Servo Co., Ltd., a subsidiary in Japan, which primarily produces and sells DC motors, fans and other small precision motors.

Net sales of Nidec Shibaura Corporation increased ¥1,334 million, or 6.8%, from ¥19,585 million for the year ended March 31, 2007 to ¥20,919 million for the year ended March 31, 2008 due primarily to an increase in sales of mid-size motors for air conditioners. Nidec Shibaura Corporation had operating profit of ¥136 million for the year ended March 31, 2007 and operating loss of ¥97 million for the year ended March 31, 2008, respectively. This decrease resulted primarily from an increase of personnel expenses and research and development expenses.

Net sales of Nidec Shibaura Corporation increased ¥3,381 million, or 20.9%, from ¥16,204 million for the year ended March 31, 2006 to ¥19,585 million for the year ended March 31, 2007 due primarily to an increase in sales of mid-size motors for air conditioners. Nidec Shibaura Corporation had operating loss of ¥274 million for the year ended March 31, 2006 and operating profit of ¥136 million for the year ended March 31, 2007. This increase resulted primarily from increased royalty fees from its subsidiary companies as compared to the same period of the previous fiscal year.

Net sales of Nidec-Shimpo Corporation increased ¥422 million, or 3.2%, from ¥13,196 million for the year ended March 31, 2007 to ¥13,618 million for the year ended March 31, 2008. This increase was due primarily to an increase in sales of power transmission equipment. However, operating profit of Nidec-Shimpo Corporation decreased ¥230 million, or 16.3%, from ¥1,412 million for the year ended March 31, 2007 to ¥1,182 million for the year ended March 31, 2008. This decrease was due primarily to start-up costs of new power transmission equipment products.

Net sales of Nidec-Shimpo Corporation increased ¥2,063 million, or 18.5%, from ¥11,133 million for the year ended March 31, 2006 to ¥13,196 million for the year ended March 31, 2007. This increase was due primarily to an increase in sales of power transmission equipment reflecting an increase in customer demand. Operating profit of Nidec-Shimpo Corporation increased ¥914 million, or 183.5%, from ¥498 million for the year ended March 31, 2006 to ¥1,412 million for the year ended March 31, 2007. This increase was due primarily to the increase in sales and cost reduction.

Net sales of Nidec Motors & Actuators were ¥9,079 million for the year ended March 31, 2007 and ¥36,636 million for the year ended March 31, 2008 respectively. Operating profit of Nidec Motors & Actuators were ¥59 million for the year ended March 31, 2007 and ¥555 million for the year ended March 31, 2008, respectively. Nidec Motors & Actuators has been consolidated since December 2006. The Nidec Motors & Actuators segment comprises Nidec Motors & Actuators (Germany) and other subsidiaries in Europe and North America, which primarily produce and sell motors for automobiles.

Net sales of Nidec Nissin Corporation increased ¥16 million, or 0.1%, from ¥11,657 million for the year ended March 31, 2007 to ¥11,673 million for the year ended March 31, 2008. This increase was primarily due to an increase in sales of engineering plastic moldings for cars. Operating profit of Nidec Nissin Corporation increased ¥65 million, or 11.9%, from ¥545 million for the year ended March 31, 2007 to ¥610 million for the year ended March 31, 2008. This increase was primarily due to an improvement in production costs in manufacturing engineering plastic dies.

Net sales of Nidec Nissin Corporation decreased ¥1,272 million, or 9.8%, from ¥12,929 million for the year ended March 31, 2006 to ¥11,657 million for the year ended March 31, 2007. This decrease was primarily due to a delay in complying with requirements of customers, such as quality and delivery, and a decline of sales prices. Operating profit of Nidec Nissin Corporation decreased ¥138 million, or 20.2%, from ¥683 million for the year ended March 31, 2006 to ¥545 million for the year ended March 31, 2007 due to a decrease in sales of plastic lenses.

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Within the All Others segment, net sales increased ¥64,095 million, or 18.7% from ¥342,954 million for the year ended March 31, 2007 to ¥407,049 million for the year ended March 31, 2008. The main reason of this increase was the addition of newly consolidated subsidiaries.  Operating profit increased ¥9,746 million, or 79.6% from ¥12,251 million for the year ended March 31, 2007 to ¥21,997 million for the year ended March 31, 2008. The main reason of this increase was the expansion in sales of Nidec Sankyo (H.K.) Co., Ltd. and the addition of newly consolidated subsidiaries.

Within the All Others segment, net sales increased ¥40,820 million, or 13.5% from ¥302,134 million for the year ended March 31, 2006 to ¥342,954 million for the year ended March 31, 2007. This increase was primarily due to an expansion in sales of Nidec Copal (Thailand) Co., Ltd.. However, operating profit slightly increased ¥72 million, or 0.6% from ¥12,179 million for the year ended March 31, 2006 to ¥12,251 million for the year ended March 31, 2007. This was primarily due to a decrease in profitability of Nidec Tosok (Vietnam) Co., Ltd. and Nidec Hi-Tech Motor (Thailand) Co., Ltd.

Accounting Changes

In June 2006, the Financial Accounting Standards Board (the “FASB”) released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”). The Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We adopted FIN 48 as of April 1, 2007, as discussed in note No. 19 “Income taxes”.

Recent Accounting Pronouncements to be adopted in future periods

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS 157”), “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for fiscal years beginning after November 15, 2007. As of April 1, 2008, we adopted SFAS No.157. The adoption of SFAS No. 157 did not have a material impact on our consolidated financial position, results of operation or liquidity.

In September 2006, the FASB issued SFAS 158. The measurement date provision of SFAS 158 requires that the measurement of plan assets and benefit obligations be as of the date of the employer’s statement of financial position, not up to three months earlier as had been permitted by Statements 87 and 106. This provision of SFAS 158 is effective for fiscal years ending after December 15, 2008. As of April 1, 2008, we adopted the measurement date provision of SFAS No.158. As a result, on the beginning of the fiscal year ending March 31, 2009, accrued pension and severance costs increased by ¥225 million ($2,246 thousand). Furthermore, retained earnings, net of tax decreased by ¥106 million ($1,058 thousand) and accumulated other comprehensive income, net of tax decreased by ¥5 million ($50 thousand).

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In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), “The Fair Value Option for Financial Assets and Financial Liabilities— including an amendment of FASB Statement No. 115”. SFAS 159 enables entities to choose to measure eligible financial assets and financial liabilities at fair value, with changes in value recognized in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. As of April 1, 2008, we adopted SFAS No.159. As we did not elect the fair value option, the adoption of SFAS No. 159 did not have an impact on our consolidated financial position, results of operation or liquidity.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007) (“SFAS 141R”), “Business Combinations”. SFAS 141R requires that assets acquired, liabilities assumed, contractual contingencies, and contingent consideration be measured at fair value as of the acquisition date, that acquisition-related costs be expensed as incurred, that restructuring costs generally be expensed in periods subsequent to the acquisition date, and that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period impact income tax expense. SFAS 141R is required to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of fiscal year beginning on or after December 15, 2008. We are currently evaluating the potential impact from adopting SFAS 141R on our consolidated financia l position, results of operation or liquidity.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160 (“SFAS 160”), “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. SFAS 160 recharacterizes minority interests in a subsidiary as non-controlling interests and requires the presentation of noncontrolling interests as equity in the consolidated balance sheets, and separate identification and presentation in the consolidated statement of income of net income attributable to the entity and the noncontrolling interest. SFAS 160 also requires all the transactions for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation be recognized as equity transactions. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. We are currently evaluating the potential impact from adopting SFAS 160 on our consolidated financial posit ion, results of operation or liquidity.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161 (“SFAS 161”), “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”. SFAS 161 is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We are currently evaluating the potential impact from adopting SFAS 161 on our consolidated financial position, results of operation or liquidity.

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162 (“SFAS 162”), “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS 162 is effective after 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments. We are currently evaluating the potential impact from adopting SFAS 162 on our consolidated financial position, results of operation or liquidity.

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Application of Critical Accounting Policies

The Company 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 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, which consist primarily of finished products such as hard disk drives spindle motors, 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-off 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 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.

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As of March 31, 2008, the estimated fair value of our marketable securities was ¥13,711 million. We recorded a gain on marketable securities in the amount of ¥454 million for the year ended March 31, 2008.

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

	Year ended March 31
	2006	2007	2008	2008
	(Yen in millions and U.S. dollars in thousands)
Other-than-temporary losses on marketable securities	-	¥ 11	¥ 287	$ 2,865

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, 2008, sales to our six largest customers represented approximately 36% of our net sales. Our accounts receivable are likewise concentrated. At March 31, 2008, six customers represented ¥47,629 million, or 32%, 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 ¥795 million as of March 31, 2008. Our trade notes and accounts receivable balance was ¥166,133 million, net of allowance for doubtful accounts, as of March 31, 2008.

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

	Year ended March 31
	2006	2007	2008	2008
	(Yen in millions and U.S. dollars in thousands)
Provision for doubtful accounts, net of reversal	¥1,164	¥ 117	¥ 312	$ 3,114

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, 2008, we had deferred tax assets in the amount of ¥24,449 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 ¥6,455 million as of March 31, 2008, 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.

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Impairment of Long-lived Assets

Long-lived assets consist primarily of property, plant and equipment, comprising approximately 30% of our total assets as of March 31, 2008, 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 impairment of long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable, we have reviewed the respective assets for impairment. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows. 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 have been accounted for using the purchase method of accounting. The purchase method requires that the net assets, tangible and identifiable intangible assets less liabilities of the acquired company be recorded at fair value, with the difference between the cost of an acquired company and the fair value of the acquired net assets recorded as goodwill. Application of the purchase method requires our management to make complex judgments about the allocation of the purchase price to that of the 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.

Valuation of Goodwill

We assess the impairment of acquired goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. 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.

When we determine that the carrying value of goodwill and other intangibles may not be recoverable, 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. Changes in the projected discounted cash flow could negatively affect the valuations. Goodwill amounted to ¥71,223 million as of March 31, 2008.

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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 to external sources to develop our expected rate of return on plan assets. The discount rate is assumed based on the rates available on high-quality fixed-income debt instruments (rated AA by a recognized rating agency) for which the timing and amount of cash inflows approximates the estimated outflows of the defined benefit plan. We assume a rate of increase in compensation levels and average remaining years of service based on our historical data. Changes in these assumptions will have an impact on our net periodic pensi on cost.

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 ended March 31, 2009		As of March 31, 2008
Discount rates
0.5% decrease	¥ (35	)	¥ 1,685
0.5% increase	9		(1,223	)
Expected rate of return on plan assets
0.5% decrease	¥ (43	)
0.5% increase	43

Income Taxes

We adopted FASB Interpretation No.48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No.109,” 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 assumed. For small precision motors, mid-size 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.

Our principal needs for cash are:

• payments for the purchase of parts and raw materials;

• payments for the purchase of equipment for our production facilities;

• selling, general and administrative expenses such as research and development expenses;

• payments for the purchase of shares of companies targeted under our acquisitions strategy;

• employees’ salaries, wages and other payroll costs;

• repayment of short-term debt;

• payments of dividends to our shareholders; and

• taxes.

We fund our growth primarily with funds generated from operations, proceeds from issuances of new shares, unsecured bonds, including convertible bonds, and borrowings from banks. We believe that these funding sources, as well as future sources of external funding, will be sufficient to meet our capital requirements for the current fiscal year. The uses of funds raised are capital expenditures, investment in and financing of affiliated companies and repayment of borrowings from banks. We intend to implement additional funding programs as the need arises to further strengthen our capital base, and thus enhance the balance between borrowings and equity capital. Part of the funds raised are reserved and utilized for potential mergers and acquisitions.

We actively seek to implement group financing strategies within the Nidec Group in order to improve our cash efficiencies on a consolidated basis and reduce capital costs. We prepared a “cash management system” during the fiscal year ended March 31, 2006 and introduced it in April 2006. Our subsidiaries actively repay loans with higher interest rates from banks and we extend loans with lower interest rates to these subsidiaries. We work to reduce finance costs on a consolidated basis by thoroughly reviewing and managing the group’s financing costs and allocating surplus cash effectively within the group through balancing cash flows and investment activities including mergers and acquisitions.

Total assets increased ¥9,091 million from ¥662,623 million to ¥671,714 million as of March 31, 2008. Excluding the contribution from newly consolidated companies, total assets decreased ¥14,521 million from ¥662,623 million as of March 31, 2007 to ¥648,102 million as of March 31, 2008. Cash and cash equivalents increased ¥12,025 million, as mentioned under “Cash Flows” below. Property, plant and equipment decreased ¥8,413 million due primarily to a decrease in foreign currency effects which offset an increase by newly consolidated companies. Inventories increased ¥5,510 million due primarily to the newly consolidated subsidiaries, such as Japan Servo Co., Ltd. Marketable securities and other securities investment decreased ¥6,532 million due primarily to a decrease of net unrealized gains compared to the previous fiscal year as of March 31, 2007. The decreases in the va lue of marketable securities derived mainly from a sharp decline in the domestic stock market as compared to the previous fiscal year.

Total liabilities decreased ¥7,210 million from ¥291,154 million to ¥283,944 million as of March 31, 2008. Excluding the contribution from newly consolidated companies, total liabilities decreased ¥17,387 million from ¥291,154 million as of March 31, 2007 to ¥273,767 million as of March 31, 2008.This was mainly due to a decrease of short-term borrowings of ¥9,994 million due to repayment.

Working capital, defined as current assets less current liabilities, increased ¥606 million from ¥103,293 million to ¥103,899 million as of March 31, 2008 as compared to March 31, 2007.

Our receivable turnover ratio is calculated by dividing net sales for the fiscal year by the fiscal year-end trade notes and accounts receivable balance. Our receivable turnover ratio was 4.5 for the year ended March 31, 2008, which was compared to 3.8 for the year ended March 31, 2007. The inventory turnover ratio is calculated by dividing cost of products sold for the year ended March 31 by the year-end inventory balance. Our inventory turnover ratio was 8.4 for the year ended March 31, 2008, compared to 7.6 for the year ended March 31, 2007. We have been trying to reduce production levels to enable us to reduce our excess inventory levels and avoid write-offs.

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Total shareholder’s equity increased ¥14,568 million from ¥305,016 million as of March 31, 2007 to ¥319,584 million as of March 31, 2008. This increase was mainly due to an increase in retained earnings of ¥32,927 million more than a decrease in foreign currency translation adjustments of ¥17,107 million. The decrease in foreign currency translation adjustments was due to the depreciation of the yen to the Thai baht. The ratio of stockholders’ equity to total assets increased 1.6% from 46.0% as of March 31, 2007 to 47.6% as of March 31, 2008.

We believe that cash generated from operating activities is sufficient to meet the operating needs in the next year.

Cash Flows

Net cash provided by operating activities increased ¥30,093 million from ¥64,723 million for the year ended March 31, 2007 to ¥94,816 million for the year ended March 31, 2008. The increase was primarily due to improved working capital efficiency and operating profit. This was mainly due to the cash inflows from the following components which constitutes operating cash flows.

• ¥6,337 million of positive impact from an increase in depreciation compared to previous fiscal year;

• ¥7,937 million of positive impact from an increase in  foreign currency adjustments compared to previous fiscal year; and

• ¥7,140 million of positive impact from changes in operating assets and liabilities compared to previous fiscal year.

Net cash provided by operating activities increased ¥8,791 million from ¥55,932 million for the year ended March 31, 2006 to ¥64,723 million for the year ended March 31, 2007. The increase was primarily due to improved working capital efficiency and operating profit.

Cash flow from changes in operating assets and liabilities increased by ¥1,177 million for the fiscal year ended March 31, 2007 compared to the previous fiscal year due primarily to the positive impact from a decrease in inventories in the fiscal year ended March 31, 2007, while there had been a large increase in inventories in the previous fiscal year and the positive impact from an increase in accrued income taxes, there was a negative impact from a decrease in notes and accounts payable in the fiscal year ended March 31, 2007.

In addition, cash flow from the adjustments to reconcile net income to net cash provided by operating activities increased by ¥11,594 million due mainly to;

• ¥4,605 million of positive impact from foreign currency adjustments compared to the previous fiscal year;

• ¥2,926 million of positive impact from a decrease in gain from marketable securities, net compared to the previous fiscal year; and

• ¥3,712 million of positive impact from an increase in depreciation compared to the previous fiscal year.

Net cash used in investing activities decreased ¥35,211 million from ¥78,935 million for the year ended March 31, 2007 to ¥43,724 million for the year ended March 31, 2008. This was mainly due to the decreases in acquisitions of consolidated subsidiaries, payments for additional investments in subsidiaries and additions to property, plant and equipment.

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Net cash used in investing activities increased ¥34,960 million from ¥43,975 million for the year ended March 31, 2006 to ¥78,935 million for the year ended March 31, 2007. This mainly resulted from an increase in acquisition of consolidated subsidiaries, net of cash acquired of ¥25,322 million and an increase in payments for additional investments in subsidiaries of ¥11,305 million.

Net cash used in financing activities was ¥27,280 million for the year ended March 31, 2008 while net cash provided by financial activities was ¥8,943 for the year ended March 31, 2007. The increased cash outflows in financial activities were mainly due to a decrease in short-term borrowings of ¥37,772 million and an increase in the payment for dividends of ¥1,456 million.

Net cash provided by financing activities increased ¥3,599 million from ¥5,344 million for the year ended March 31, 2006 to ¥8,943 million for the year ended March 31, 2007. This was mainly because short-term borrowings increased more than other payments such as repayments of long-term debt and dividends paid in the year ended March 31, 2007.

As a result of the foregoing factors and the effect of exchange rate changes, our total outstanding balance of cash and cash equivalents increased ¥12,025 million from ¥88,784 million as of March 31, 2007 to ¥100,809 million as of March 31, 2008.

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

An important requirement for success in the highly competitive markets in which we operate is the ability to supply products that incorporate cutting-edge technology and quality. Given that competition has been intensifying, one of the major aims of our research and development activities in recent years has been to reduce the cost of designing without affecting the quality of our products.

As of March 31, 2008, we employed approximately 2,311 people engaged in research and development activities mainly in Japan as well as in China, Thailand, Singapore, Taiwan, Germany, Poland, Spain, France and U.S.A.

Our position as the leading supplier of hard disk drive spindle motors to the major hard disk drive manufacturers provides us with access to information regarding the industry needs, which we seek to incorporate into our research and development activities. We seek to proactively develop products that meet the precise needs of each customer.

Based on the precision engineering expertise gained throughout our history of making motors, we have concentrated our research and development activities on drive motor technologies; However, we conduct research in many areas, including basic technologies of spindle motors to be used in information equipment, and technologies for new types of motors such as fluid dynamic bearing technology, which we have been developing for over the past 15 years.

We are diversifying our research and development activities, which were heavily concentrated on small motor technology in the field of spindle motors, to motor and drive technologies. For example, through Nidec Shibaura Corporation and Nidec Tosok Corporation, we focus on the research and development of motors for home electric appliances and motors for automobile parts. Through Nidec-Shimpo Corporation, our subsidiary specializing in power transmission drives and variable speed drives, we have been focusing on the research and development of geared motors for color copiers. By doing so, we have been able to develop and market new products through our integrated sales design and production system.

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In January and February 2004, Nidec Copal, Nidec Copal Electronics and Nidec Sankyo became our consolidated subsidiaries. Nidec Copal has a substantial market share in shutters for digital cameras and has been developing shutters and lens units. It has developed vibration motors for mobile phones and laboratory systems equipment, among other industrial equipment-related products. Nidec Copal Electronics has developed ultra-precision fixed resistors for its circuit parts business and coreless type polygon laser scanners for its actuator business. It has also promoted the development of sensors for its pressure sensor business, mainly for the semiconductor equipment industry. Nidec Sankyo has developed intelligent mechanism products, which have merged fine mechatronics and software, coupled with the development of ultra-precision processing technology. These activities include research and development of multimedia equipment and in formation accessory equipment such as computers, industrial equipment, home electronics and housing equipment.

In April 2005, we opened Motor Engineering Research Laboratory in our Tokyo Office. Motor Engineering Research Laboratory develops basic research for various types of motors and aims to establish the foundation of motor technology going forward for our motor-related business.

Recently, our principal research and development activities have included the following:

•

the development and improvement of basic motor characteristics. For example, in order to achieve a higher transfer rate of memory written on hard disks, higher rotation speeds are required of spindle motors. As a result, spindle motors which were formerly required to generate 5,400 rotations per minute are now required to generate 7,200 to 15,000 rotations per minute. These higher speeds can, however, produce more vibration. Such vibration, as well as the higher density of disks, can disrupt the read-write function of hard disk drives. Accordingly, rotation precision has become more important, and we are conducting research and development with a view to improving such precision;

•

the improvement of analysis and material technologies, including (1) improving technologies for investigating the impact of spindle motors on hard disks, (2) improving the cleanliness of materials and of manufacturing technology and (3) research into the development of uses of new materials for spindle motors;

•

the development and improvement of spindle motors for DVDs;

•

the development and improvement of DC fan motors with a high airflow capacity that helps disperse heat inside end products such as computers, game machines and audio-visual equipments;

•

the development and improvement of optical components including shutters and lens unit for digital cameras and lens products for blue-ray, vibration motors, stepping motors, dye sublimation printer, printer for IC cards and geared motors by Nidec Copal;

•

the development and improvement of actuator, pressure sensors and RF (“radiofrequency”) components by Nidec Copal Electronics;

•

the development and improvement of LCD panel handling robots for large LCD, micro lens actuator units for mobile phone and card readers by Nidec Sankyo; and

•

the development and improvement of compact motors in automobiles for comfort and safety, such as seat adjuster, sunroof closure, windows closure, engine cooling, ABS etc by Nidec Motors and Actuators.

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The core of our research and development activities is our Central Technical Laboratory, located at our headquarters in Kyoto. In addition to basic and applied research, the Central Technical Laboratory supports the development of products that incorporate the latest technology. Market requirements are becoming more demanding. To respond in a reliable and timely matter to these requirements we have established research and development bases in various countries and regions. Nidec operate technical centers most notably in Kyoto, and also in Tokyo, Shiga, Nagano and Tottori Prefectures in Japan. These operations carry out research and development relating not only to the development of new products, but also to improve the quality of and production technology for existing products.

Utilizing state-of-the-art testing, inspection and measurement equipment, we are increasing our understanding and use of various basic technologies, not only precision motor machining technology, but also in fields such as mechanical and materials engineering and applied chemistry. Accurate and prompt inspection, analysis and measurement performed using state-of-the-art equipment are an integral element of our product and process development. The manufacture of precision motors requires high precision, measurement and analysis at the level of hundredths of a micron. Each material must be analyzed at the molecular level in order to prevent contamination, dust and gases, which are generated by adhesives and other materials and which can infiltrate minute gaps between the disk surface and the head. Using the latest equipment, our Research and Development Department conducts rigorous inspection, measurement and analysis, and utilizes the results to improve product design and process capabilities.

Similarly, we respond to challenges such as noise reduction, using advanced equipment and our own methods. Today, noise reduction is a significant issue in the computer and consumer electronics fields. In order to address this issue, we have constructed acoustic test rooms, consisting of reverberation and sound anechoic chambers which conform to international standards, where we conduct tests, measurement and analysis.

In addition to its motor business, Nidec Copal operates technology development centers in Itabashi, Tokyo and Koriyama, Fukushima Prefecture. Nidec Copal Electronics has technology development centers in Tajiri, Miyagi Prefecture and Sano, Tochigi Prefecture. Nidec Sankyo operates its technology development centers in Shimosuwa, Komagane and Chino in Nagano Prefecture and Itabashi, Tokyo.

We incurred research and development expenses of ¥29,232 million for the year ended March 31, 2006, ¥32,755 million for the year ended March 31, 2007 and ¥30,100 million for the year ended March 31, 2008.

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 ¥35,000 million on research and development in the year ending March 31, 2009. 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 Item 4.B of this annual report.

E. Off-Balance Sheet Arrangements.

We have guaranteed approximately ¥293 million ($2,924 thousand) of bank loans for employees for their housing costs. If an employee defaults on his/her loan payments, we are required to perform under such guarantees. The undiscounted maximum amount of our obligation to make future payments in the event of defaults is approximately ¥293 million ($2,924 thousand). 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, 2008.

	(Yen in millions)
Contractual Obligations	Payments Due by Period
	Total	Less than 1 year	2-3 years	4-5 years	After 5 years
Long-term Debt	¥ 27,399	¥ 27,124	¥ 57	¥ 68	¥ 150
Capital Lease Obligations	5,227	2,072	2,583	551	21
Interest on debt *1	298	135	141	15	7
Operating Leases	4,782	871	1,422	1,158	1,331
Purchase Commitments for fixed aseets	8,389	8,389	-	-	-
Total Contractual Cash Obligations	46,095	38,591	¥ 4,203	¥ 1,792	¥ 1,509
Contribution under pension plans *2	¥ 2,289	¥ 2,289	-	-	-
Other Commercial Commitments	Total Amounts Committed	Amount of Commitment Expiration per Period
		Less than 1 year	2-3 years	4-5 years	Over 5 years
Guarantees	¥ 293	¥ 46	¥ 39	¥ 38	¥ 170
Total Commercial Commitments	¥ 293	¥ 46	¥ 39	¥ 38	¥ 170
	(U.S. dollars in thousands)
Contractual Obligations	Payments Due by Period
	Total	Less than 1 year	2-3 years	4-5 years	After 5 years
Long-term Debt	$ 273,470	$ 270,725	$ 569	$ 679	$ 1,497
Capital Lease Obligations	52,171	20,681	25,781	5,499	210
Interests on debt *1	2,974	1,347	1,407	150	70
Operating Leases	47,729	8,693	14,193	11,558	13,285
Purchase Commitments for fixed aseets	83,731	83,731	-	-	-
Total Contractual Cash Obligations	460,075	385,177	$ 41,950	$ 17,886	$ 15,062
Contribution under pension plans *2	$ 22,847	$ 22,847	-	-	-
Other Commercial Commitments	Total Amounts Committed	Amount of Commitment Expiration per Period
		Less than 1 year	2-3 years	4-5 years	Over 5 years
Guarantees	$ 2,924	$ 459	$ 389	$ 379	$ 1,697
Total Commercial Commitments	$ 2,924	$ 459	$ 389	$ 379	$ 1,697

*1 Interests at variable interest rates are assumed based on the current applicable rate of 2.0%.

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

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Our capital commitments as of March 31, 2008 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 ¥3,317 million on March 31, 2007 to approximately ¥8,389 million on March 31, 2008, and increased from approximately ¥1,630 million on March 31, 2006 to approximately ¥3,317 million on March 31, 2007, respectively. The increase for the year ended March 31, 2008 was due mainly to the expantion of the Nagano Technical Center, one of Nidec’s Japan-based R&D facilities, and JSRV, new consolidated subsidiary in April 2008. The increase for the year ended March 31, 2007 was due mainly to an increase in investments in facilities equipment compared to the previous year. See Note 24 to our consolidated financial statements included in this annual report. We expect to make capital expenditures in addition to those for which we have outstanding commitments.

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Item 6. Directors, Senior Management and Employees.

A. Directors and Senior Management.

Directors, Executive Officers and Corporate Auditors

The following table provides information about our Directors, Executive Officers 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, 2008	Percentage of common stock outstanding as of March 31, 2008
				(in thousands)
Shigenobu Nagamori	Representative Director, President and Chief Executive Officer	August 28, 1944	June 2009	23,423	16.1%
Hiroshi Kobe	Representative Director, Executive Vice President and Chief Operating Officer	March 28, 1949	June 2009	235	*
Yasunobu Toriyama	Member of the Board, Executive Vice President and Chief Financial Officer	September 18, 1938	June 2009	15	*
Kenji Sawamura	Member of the Board, Executive Vice President	February 15, 1942	June 2009	8	*
Juntaro Fujii	Member of the Board, Executive Vice President	February 20, 1945	June 2009	2	*
Yasuo Hamaguchi	Member of the Board, First Senior Vice President	September 27, 1949	June 2009	275	*
Tadaaki Hamada	Member of the Board,  Senior Vice President	August 14, 1948	June 2009	1	*
Tetsuo Inoue	Member of the Board, Vice President	June 22, 1948	June 2009	6	*
Masuo Yoshimatsu	Member of the Board, Vice President	April 28, 1958	June 2009	3	*
Hideo Asahina	Corporate Auditor	March 28, 1938	June 2011	1	*
Ryoji Takahashi	Corporate Auditor	April 22, 1941	June 2011	13	*
Shiro Kuniya	Corporate Auditor	February 22, 1957	June 2010	-	*
Yoshiro Kitano	Corporate Auditor	September 30, 1935	June 2010	-	*
Susumu Ono	Corporate Auditor	November 12, 1948	June 2011	-	*

Note: The asterisk represents beneficial ownership of less than 1%.

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Shigenobu Nagamori, who founded Nidec Corporation in July 1973, has since been serving as the Company’s Representative Director, President & Chief Executive Officer (CEO). Mr. Nagamori, investing his capitals in many companies, is currently serving as Representative Director and Chairman of Nidec Sankyo Corporation, Member of the Board and Chairman of Nidec Copal Corporation, Nidec Tosok Corporation, Nidec Copal Electronics Corporation, Japan Servo Co., Ltd. and Nidec-Read Corporation, and Representative Director and Chairman of Nidec-Shimpo Corporation, Nidec-Kyori Corporation, Nidec Logistics Corporation, and Nidec Machinery Corporation, Representative Director and Chairman of Nidec System Engineering (Zhejiang) Corporation, and Representative Director and Chairman of Nidec Nissin Corporation.

Hiroshi Kobe has been appointed to serve as Representative Director, Executive Vice President & Chief Operating Officer (COO) as of June 2008.  Mr. Kobe joined Nidec Corporation in July 1973, and became Member of the Board in November 1984, Member of the Board and Managing Director in November 1991, Member of the Board and Senior Managing Director in April 1996, Member of the Board and Vice President in April 2000, COO in April 2005, and Representative Director, Executive Vice President & COO in June 2006.  Mr. Kobe is currently in charge of supervising the Motor Engineering & Research Laboratory, SPM (spindle motor) Quality Control Dept., and Compliance Office, and serving as Representative Director and Chairman of Nidec Korea Corporation and Nidec Total Service Corporation as well.

Yasunobu Toriyama has been appointed to serve as Member of the Board, Executive Vice President, and Chief Financial Officer (CFO) as of June 2008.  Mr. Toriyama, who became Deputy GM of the Accounting Dept. at Koyo Seiko Co., Ltd. (the current JTEKT Corporation) in June 1980, joined Nidec Corporation as Executive Director in April 1991, and became Member of the Board in June 1991, Member of the Board and Executive Vice President in April 2002, and Member of the Board, Executive Vice President & CFO in April 2005, and he is currently in charge of supervising administrative departments, the Risk Management Office, Finance Dept., and Information Systems Dept.

Kenji Sawamura has been appointed to serve as Member of the Board and Executive Vice President as of June 2008.  Mr. Sawamura joined Nidec Corporation as Executive Director in October 1998, and became Member of the Board in June 2000, Senior Managing Director in April 2002, and Member of the Board and Executive Vice President in June 2006, and he is in charge of supervising the ADF business, Shiga Technical Center, Tottori Technical Center, Corporate Purchasing Dept., ADF Quality Control Dept., and Die & Molding Dept., and serving as Member of the Board, Chairman & CEO of Nidec America Corporation, Representative Director, Chairman & CEO of Nidec Electronics GmbH, Representative Director and Chairman of Nidec (Dalian) Limited, Nidec Automobile Motor (Zhejiang) Corporation, and Nidec (Dongguan) Limited, Member of the Board, Chairman & CEO of Nidec Vietnam Corporation, Representative Director and Chairman of Nide c Shibaura Corporation, Member of the Board and Chairman of Nidec Motors & Actuators, Representative Director and Chairman of Nidec Nemicon Corporation and Nidec Power Motor Corporation.  Mr. Sawamura was Managing Director in his previous employment at Nissan Motor Co., Ltd.

Juntaro Fujii, who has been appointed to serve as Member of the Board and Executive Vice President as of  June 2008, joined Nidec Corporation as Executive Consultant in June 2006, and became Member of the Board and Executive Vice President in June 2006.  Mr. Fujii, previously a Member of the Board and President of Mitsubishi UFJ Research & Consulting Co., Ltd., is currently in charge of supervising the Corporate Strategy Office.

Yasuo Hamaguchi, who has been appointed to serve as Member of the Board and First Senior Vice President as of June 2008, joined Nidec Corporation in April 1974, and became Member of the Board in June 1993, Managing Director in June 1998, and Senior Managing Director in April 2002.  Mr. Hamaguchi is currently in charge of supervising the SPM businesses, SPM purchasing departments, and Nidec Brilliant Co., Ltd., and serving as Representative Director and Chairman of Nidec Electronics (Thailand) Co., Ltd. and Nidec (Zhejiang) Corporation, Member of the Board and Chairman of Nidec Singapore Pte. Ltd., and Representative Director and Chairman of Nidec Philippines Corporation.

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Tadaaki Hamada has been appointed to serve as Member of the Board and Senior Vice President as of June 2008. Mr. Hamada, originally from Mitsubishi Bank (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 Member of the Board in June 2004, and Managing Director in April 2005.  Mr. Hamada is currently in charge of supervising the General Affairs Dept., Human Resources Dept., Secretarial Office, Corporate Planning Dept., Intellectual Property Dept., Legal Dept., and Overseas Affiliates Administration Dept., and serving as General Manager of the Corporate Planning Dept.

Tetsuo Inoue, originally from Sumitomo Bank (the current Sumitomo Mitsui Banking Corporation) which he joined in April 1972, has been appointed to serve as Member of the Board and Vice President as of June 2008, joined Nidec Corporation as Executive Director in December 1999, and became Member of the Board in June 2002.  Mr. Inoue is currently in charge of supervising, and serving as General Manager of the Affiliates Administration Dept.

Masuo Yoshimatsu, who has been appointed to serve as Member of the Board and Vice President as of June 2008, joined Nidec Corporation as Executive Consultant in January 2008, and he is currently in charge of supervising the IR Dept., Public Relations & Advertising Dept., Accounting Dept. and CSR Promotion Office.  Mr. Yoshimatsu was Member of the Board and General Manager of Finance and Accounting Division of SS Pharmaceutical Co., Ltd.

Hideo Asahina has been serving as Standing Auditor since June 2003.  He became Director of Kobe Customs, Ministry of Finance in June 1985, and Finance Minister’s Secretariat Councilor for International Finance Bureau in June 1986.  He became Director of Finance Corporation of Local Public Enterprise in October 1988, and President of Osaka Securities Finance Co., Ltd. in June 1991.  He has served as Director General of the Commemorative Association for the Japan World Exposition 1970 since July 1996.

Ryoji Takahashi joined Nidec in March 1994, and was appointed as General Manager of the General Affairs Department in April of the same year.  Mr. Takahashi became General Manager of the Intellectual Property Department in October 1998, General Manager of the Compliance Office and Risk Management Office in May 2003, and Standing Auditor in June 2007.

Shiro Kuniya was enrolled in the Osaka Bar Association and joined Oh-Ebashi Law Office (the current Oh-Ebashi LPC & Partners) in April 1982.  He is a Senior Partner at Oh-Ebashi LPC & Partners.  He has been serving as Nidec Corporation’s Auditor since June 2006.

Yoshiro Kitano became a registered certified public accountant in September 1980 and a licensed tax accountant in December 1990.  He established Yoshiro Kitano Certified Public Accountant Office in January 2001.  He has been serving as Nidec Corporation’s Auditor since June 2006.

Susumu Ono started his career as a prosecutor for the Osaka District Public Prosecutor’s Office in April 1974, and was seconded to the Ministry of Foreign Affairs to serve as First Secretary at the Japanese Embassy in the People’s Republic of China.  Mr. Ono returned to his work as a prosecutor for the Osaka District Public Prosecutor’s Office in April 1988, became Deputy General Manager of the Office’s Criminal Investigations Department in April 1995, and General Manager of the Criminal Investigations Department of the Kyoto District Public Prosecutor’s Office in July 1996, and General Manager of the General Affairs Department of the Osaka District Public Prosecutor’s Office in April 1998.  Mr. Ono became a registered attorney in May 1999, and started serving as Nidec Corporation’s Auditor in June 2007.

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The following table provides information about our Executive Officers 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, 2008	Percentage of common stock outstanding as of March 31, 2008
				(in thousands)
Seizaburo Kawaguchi	Senior Vice President	October 27, 1953	June 2009	21	*
Norimasa Goto	Senior Vice President	March 1, 1947	June 2009	0	*
Seiichi Hattori	Senior Vice President	December 30, 1953	June 2009	20	*
Kiyoyoshi Takegami	Senior Vice President	December 28, 1954	June 2009	49	*
Takashi Iwata	Vice President	April 9, 1947	June 2009	2	*
Masahiro Hishida	Vice President	October 23, 1954	June 2009	-	*
Takashi Watanuki	Vice President	November 19, 1952	June 2009	0	*
Osamu Narumiya	Vice President	August 6, 1951	June 2009	0	*
Tsuyoshi Takahashi	Vice President	August 10, 1945	June 2009	-	*
Tadashi Matsumoto	Vice President	August 11, 1952	June 2009	-	*
Hitoshi Inoue	Vice President	December 24, 1952	June 2009	1	*
Akira Kagata	Vice President	March 7, 1943	June 2009	1	*
Genzo Arakawa	Vice President	June 18, 1949	June 2009	0	*
Toshihiko Miyabe	Vice President	June 16, 1958	June 2009	4	*
Hitoshi Tatsuno	Vice President	January 8, 1959	June 2009	5	*
Kuniyasu Tampo	Vice President	January 21, 1960	June 2009	8	*

Note: The asterisk represents beneficial ownership of less than 1%.

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Seizaburo Kawaguchi

Senior Vice President

(Member of the Board, Chairman & CEO, Nidec Brilliant Co., Ltd.)

Norimasa Goto

Senior Vice President

In charge of supervising DCM (direct current motor) and Fan business

(Representative Director and Chairman, Nidec (New Territories) Co., Ltd.,

Member of the Board and Vice Chairman, Nidec (Dalian) Limited, Nidec (Dongguan) Limited and Nidec Vietnam Corporation）

Seiichi Hattori

Senior Vice President

In charge of supervising sales departments

(Representative Director and Chairman, Nidec (H.K.) Co., Ltd.)

Kiyoyoshi Takegami

Senior Vice President

Assisting SPM business operations,

In charge of supervising SPM Business Development and Technology Dept., and SPM Corporate Strategy Office

Takashi Iwata

Vice President

In charge of supervising Corporate Administration & Internal Audit Dept. and International Business Administration Dept.

General Manager, Corporate Administration & Internal Audit Dept. and International Business Administration Dept.

Masahiro Hishida

Vice President

(Member of the Board and First Senior Vice President, and in charge of supervising sales departments of, Nidec Shibaura Corporation and Nidec Power Motor Corporation.)

Takashi Watanuki

Vice President

In charge of supervising A/B business

(Vice President, Nidec (Dalian) Limited

Member of the Board and Vice Chairman, Nidec Automobile Motor (Zhejiang) Corporation)

Osamu Narumiya

Vice President

In charge of supervising Human Resources Dept. and General Affairs Dept ,Tokyo office

Tsuyoshi Takahashi

Vice President

General Manager, Central Technical Laboratory

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Tadashi Matsumoto

Vice President

(Member of the Board and First Senior Vice President, Nidec-Read Corporation, General Manager, Corporate Strategy Office)

Hitoshi Inoue

Vice President

General Manager, Shiga Technical Center

General Manager, Research & Development Center IV, Shiga Technical Center

Akira Kagata

Vice President

General Manager, Process Engineering Dept, Central Technical Laboratory

Genzo Arakawa

Vice President

(Member of the Board and Senior Vice Presidnet, Japan Servo Co., Ltd.

General Manager, Business Administration Div., and in charge of supervising Corporate Planning Dept.

and Information Systems Dept., Japan Servo Co., Ltd.)

Toshihiko Miyabe

Vice President

(Representative Director and President, Nidec Philippines Corporation)

Hitoshi Tatsuno

Vice President

(Member of the Board and President, Nidec (Dalian) Limited)

Kuniyasu Tampo

Vice President

(Representative Director and President, Nidec Electronics (Thailand) Co., Ltd.)

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 Yasunobu Toriyama is the Member of the Board, Executive Vice President and Chief Financial Officer. Our Executive Officers serve at the discretion of the Board of Directors.

Corporate Auditors

Our Articles of Incorporation provide for not more than five Corporate Auditors. Currently, we have five Corporate Auditors: Hideo Asahina, Ryoji Takahashi, Shiro Kuniya, Yoshiro Kitano and Susumu Ono. 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.

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Two of our Corporate Auditors, Hideo Asahina and Ryoji Takahashi, are full-time Corporate Auditors. Except Ryoji Takahashi, 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.

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

B. Compensation.

The aggregate compensation, including bonuses, paid by us to our Directors and Corporate Auditors as a group during the year ended March 31, 2008 was ¥2,671 million. In accordance with customary Japanese business practices, a retiring Director or Corporate Auditor receives a lump-sum retirement payment, which is subject to the approval of the general meeting of shareholders. In the year ended March 31, 2008, retirement payments in the aggregate amount of ¥243 million were made.

We are currently authorized to issue rights to subscribe for or purchase up to 593,400 shares (after an adjustment to reflect the effect of the stock split discussed below) of our common stock to our directors, corporate auditors and employees for no consideration for the purposes of increasing their incentive and motivation to enhance our business performance and to promote shareholder-oriented management. On November 18, 2005, we completed a two-for-one stock split. As a result, the exercise price changed to ¥3,675 per share of common stock.

C. Board Practices.

The information required by this item is set forth in Items 6.A and 6.B of this annual report.

D. Employees.

The information required by this item is set forth in Item 4.B of this annual report.

E. Share Ownership.

The information required by this item is set forth in Item 6.A of this annual report. On May 14, 2003, we issued rights to purchase 296,700 shares of our common stock to directors, corporate auditors and certain employees for no consideration. These rights were exercisable under certain conditions for the period between July 1, 2004 and June 30, 2007 and the exercise price was set at ¥7,350 per share of common stock, subject to certain adjustments.

On November 18, 2005, we completed a two-for-one stock split. As a result, the exercise price changed to ¥3,675 per share of common stock.

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Item 7. Major Shareholders and Related Party Transactions.

A. Major Shareholders.

To our knowledge, as of March 31, 2008, the following persons beneficially owned more than 5% of our outstanding common stock:

Shareholders	Number of shares of common stock owned (thousands)	Percentage of common stock outstanding
Shigenobu Nagamori	23,423	16.1	%
FMR L.L.C. *1	8,276	5.7	%
JP Morgan Asset Management *2	7,393	5.0	%
Mitsubishi UFJ Financial Group, Inc. *3	7,385	5.0	%
Fidelity Investments Japan *4	7,258	5.0	%

__________

Notes:

*1: As of March 31, 2008, and based on the report filed on that date by FMR L.L.C. with the U.S. Securities and Exchange Commission, which disclosed its beneficial ownership of our common stock.

*2: As of March 31, 2008, and based on the report filed on that date by JP Morgan Asset Management  with the Financial Services Agency in Japan, which disclosed its and its affiliates’ beneficial ownership of our common stock.

*3: As of March 31, 2008, and based on the report filed on that date by Mitsubishi UFJ Financial Group, Inc. with the Financial Services Agency in Japan, which disclosed its and its affiliates’ beneficial ownership of our common stock.

*4: As of March 31, 2008, and based on the report filed on that date by Fidelity Investments Japan with the Financial Services Agency in Japan, which disclosed its beneficial ownership of our common stock.

The voting rights of the shareholders described above are identical to those of our other shareholders.

As of March 31, 2008, there were 144,987,492 shares of our common stock outstanding held by 22,977 shareholders of record, including 118 shareholders of record with addresses in the United States who held 18,989,710 shares, representing approximately 13.0% of our outstanding common stock as of that date.

To our knowledge, we are not, directly or indirectly, owned or controlled by any other corporation or by any government or by any other natural or legal persons, severally or jointly. We know of no arrangements the operation of which may at a later time result in a change of control of Nidec.

B. Related Party Transactions.

Since April 1, 2003, except as described below, we have not entered into any material transactions with our directors, officers, corporate auditors or their respective family members or enterprises over which they can exert significant influence.

As of March 31, 2008, President Nagamori held of record 8.2％ and S. N Kohsan, a business entity indirectly owned by him, held of record 6.1％ of our outstanding shares. President Nagamori’s immediate family held an additional 1.8％ of our outstanding shares as of the same date.

We have entered into various manufacturing, sales and purchase arrangements with our affiliates, most of which involve the production of components or products that we sell.

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C. Interests of Experts and Counsel.

Not applicable.

Item 8. Financial Information.

A. Consolidated Statements and Other Financial Information.

Financial Statements

The information required by this item is set forth in our consolidated financial statements included in this annual report.

Legal or Arbitration Proceedings

The information on legal or arbitration proceedings required by this item is set forth in Item 4.B. of this annual report.

Dividend Policy

We normally pay cash dividends twice per year. Our Board of Directors resolves the dividend to be paid following the end of each fiscal year. We pay the dividend to holders of record as of the immediately preceding March 31. In addition to these year-end dividends, we normally pay interim dividends in the form of cash distributions from our retained earnings to our shareholders also of record as of September 30 in each year by resolution of our Board of Directors. We normally pay the interim dividend in December and the year-end dividend in June.

The following table sets forth the year-end and interim dividends paid to holders of record of our common stock for each of the record dates shown. Yen per share dividend amounts are translated solely for your convenience into U.S. dollars at the noon buying rate for Japanese yen announced by the Federal Reserve Bank of New York on the dividend payment date.

Record date	Dividends per share
	Yen			U.S. dollar
September 30, 2003	¥	7.5	*	$	0.069
March 31, 2004 **		7.5	*		0.070
September 30, 2004		10.0	*		0.095
March 31, 2005 **		12.5	*		0.115
September 30, 2005		12.5	*		0.104
March 31, 2006 **		20.0			0.173
September 30, 2006		20.0			0.172
March 31, 2007 **		25.0			0.206
September 30, 2007		25.0			0.224
March 31, 2008	¥	30.0		$	0.280

* A two-for-one stock split on the Company’s common stock effective November 18, 2005 was implemented for shareholders of record as of September 30, 2005. Therefore the dividends per share have been accordingly adjusted to reflect the effect of the stock split.

** Our Board of Directors recommended the dividend to be paid the end of each fiscal year. This recommended dividend must then be approved by shareholders at the general meeting of shareholders required to be held in June of each year under the Commercial Code of Japan (in May 2006, the Commercial Code was replaced by the new Company Law).

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It is the present intention of the Board of Directors to continue to pay cash dividends on a semiannual basis and to provide a stable level of dividends to our shareholders. The declaration and payment of dividends are, however, subject to our future earnings, financial condition and other factors, including statutory and other restrictions with respect to the payment of dividends.

Dividends paid to shareholders outside Japan on shares of common stock or ADSs are generally subject to a Japanese withholding tax at the temporary rate of 7% (applicable until March 31, 2009) or standard rate of 15% (applicable on April 1, 2009 and thereafter). Reduced rates for withholding apply to shareholders in some countries which have income tax treaties with Japan. U.S. holders are generally subject to a maximum withholding rate of 10%. If the applicable tax rate under the domestic tax law is lower than that promulgated under the applicable income tax treaty, then the domestic tax rate is still applicable due to the so-called preservation doctrine.

B. Significant Changes.

We are not aware of any significant change in our financial position since March 31, 2008, the date of our last audited financial statements.

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Item 9. The Offer and Listing.

A. Offer and Listing Details.

In Japan, our common stock is listed on the First Section of the Osaka Securities Exchange, Co., Ltd. and the First Section of the Tokyo Stock Exchange, Inc. both of which are reserved for larger, established companies.

The following table sets forth, for the periods indicated, the closing high and low sales prices, as adjusted to reflect the 2-for-1 stock split that took effect on November 18, 2005 but excepting the 4-for-1 ratio change that took effect on January 1, 2004, and the average daily trading volume of our common stock on the Osaka Securities Exchange, and the closing highs and lows of the Nikkei Stock Average:

	Price Per Share		Average Daily Trading Volume	Nikkei Stock Average
	High	Low		High	Low
			(in thousands of shares)
Year ended March 31,
2004	¥ 5,700	¥ 2,800	361	¥ 11,770.65	¥ 7,607.88
2005	6,675	4,795	452	12,163.89	10,505.05
2006	10,930	5,735	612	17,059.66	10,825.39
2007	9,660	7,030	560	18,215.35	14,218.60
First Quarter	9,660	7,500	617	17,563.37	14,218.60
Second Quarter	8,910	7,030	502	16,385.96	14,437.24
Third Quarter	9,400	8,140	480	17,225.83	15,725.94
Fourth Quarter	9,230	7,200	644	18,215.35	16,642.25
2008	8,730	6,080	784	18,261.98	11,787.51
First Quarter	7,860	6,890	658	18,240.30	17,028.41
Second Quarter	8,220	6,730	869	18,261.98	15,273.68
Third Quarter	8,730	7,380	700	17,458.98	14,837.66
Fourth Quarter	8,020	6,080	916	14,691.41	11,787.51
2009
First Quarter	8,260	6,280	769	14,489.44	12,656.42
Calendar period
March 2008	7,040	6,120	844	13,215.42	11,787.51
April 2008	7,830	6,280	935	13,894.37	12,656.42
May 2008	8,200	7,410	663	14,338.54	13,655.34
June 2008	8,260	7,070	705	14,489.44	13,481.38
July 2008	7,770	6,780	783	13,603.31	12,754.56
August 2008	¥ 7,920	¥ 7,080	569	¥ 13,430.91	¥ 12,666.04

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 The following table sets forth, for the periods indicated, the closing high and low sales price in U.S. dollars as adjusted to reflect the 2-for-1 stock split that took effect on November 18, 2005, and the average trading volume of our ADSs on the New York Stock Exchange:

	Price Per ADS		Average Daily Trading Volume	Dow Jones Industrial Average
	High	Low		High	Low
			(in ADSs)
Year ended March 31,
2004	$ 13.31	$ 5.88	9,032	10,737.70	8,069.86
2005	16.20	11.05	10,802	10,940.55	9,749.99
2006	23.32	13.01	22,038	11,317.43	10,012.36
2007	20.82	16.73	24,161	12,786.64	10,706.14
First Quarter	20.82	16.73	23,667	11,642.65	10,706.14
Second Quarter	18.99	15.28	18,237	11,718.45	10,739.35
Third Quarter	20.00	17.39	24,525	12,510.57	11,670.35
Fourth Quarter	19.47	15.39	30,415	12,786.64	12,050.41
2008	19.73	14.11	29,366	14,164.53	11,740.15
First Quarter	16.53	14.25	22,054	13,676.32	12,382.30
Second Quarter	17.85	14.11	36,392	14,000.41	12,845.78
Third Quarter	19.73	16.87	20,114	14,164.53	12,743.44
Fourth Quarter	18.30	14.80	39,367	13,056.72	11,740.15
2009
First Quarter	19.47	16.12	20,969	13,058.20	11,346.51
Calendar period
March 2008	16.70	15.20	29,220	12,548.64	11,740.15
April 2008	18.97	16.12	23,909	12,891.86	12,302.06
May 2008	19.39	18.01	19,495	13,058.20	12,479.63
June 2008	19.47	16.63	19,362	12,604.45	11,346.51
July 2008	18.13	16.12	18,373	11,632.38	10,962.54
August 2008	$ 17.98	$ 16.00	28,976	11,782.35	11,284.15

* The Ratio of ADS to shares was changed from each ADS representing on share to each ADS representing one-fourth of one share, effective January 1, 2004. Accordingly price per ADS information has been restated for all prior periods presented to reflect this ratio change.

B. Plan of Distribution.

Not applicable.

C. Markets.

See Item 9.A. of this annual report for information on the markets on which our common stock is listed or quoted.

D. Selling Shareholders.

Not applicable.

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E. Dilution.

Not applicable.

F. Expenses of the Issue.

Not applicable.

Item 10. Additional Information.

A. Share Capital.

Not applicable.

B. Memorandum and Articles of Association.

Objects and Purposes in Our Articles of Incorporation

Article 2 of our Articles of Incorporation, which are attached as an exhibit to this annual report, states our objects and purposes.

Provisions Regarding Our Directors

There is no provision in our Articles of Incorporation as to a Director’s power to vote on a proposal in which the Director is materially interested but, under the Company Law of Japan and our Regulations of the Board of Directors, a Director is required to refrain from voting on such matters at meetings of the Board of Directors.

The Company Law provides that compensation for directors is determined at a general meeting of shareholders of a company. Within the upper limit approved by the shareholders’ meeting, the board of directors will determine the amount of compensation for each director. The board of directors may, by its resolution, leave such decision to the discretion of the company’s representative director.

The Company Law requires directors to “perform their duties faithfully on behalf of the company,” thus subjecting directors to a duty of loyalty (chujitsu gimu). This duty is supplemented by other duties such as to avoid self-dealing and competition with the corporation as well as to abide by all laws and regulations, articles of incorporation and resolutions of general meetings of shareholders.

Directors can be held liable for damages caused by their negligence in performing their duties, including any action to violate a law, an ordinance or articles of incorporation. For example, directors can be liable for damages caused by declaring an unlawful dividend or distribution of money or by offering some benefit to a shareholder in exchange for the exercise of that shareholder’s rights as shareholder.

There is no mandatory retirement age for our Directors under the Company Law or our Articles of Incorporation.

There is no requirement concerning the number of shares one individual must hold in order to qualify him or her as a Director either under the Company Law or our Articles of Incorporation.

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Holding of Our Shares by Foreign Investors

There are no limitations on the rights of non-residents or foreign shareholders to hold or exercise voting rights on our shares imposed by the laws of Japan or our Articles of Incorporation or our other constituent documents.

Rights of Our Shareholders

Set forth below is information relating to our common stock, including brief summaries of the relevant provisions of our Articles of Incorporation and Share Handling Regulations, as currently in effect, and of the Company Law and related legislation.

General

Our authorized share capital is 480,000,000 shares, of which 144,987,492 shares were issued and outstanding as of March 31, 2008. Under the Company Law, shares must be registered and are transferable by delivery of share certificates. In order to assert shareholders’ rights against us, a shareholder must have its name and address registered on our register of shareholders in accordance with our Share Handling Regulations. The registered beneficial holder of deposited shares underlying the ADSs is the depositary for the ADSs. Accordingly, holders of ADSs will not be able to directly assert shareholders’ rights such as the right to bring a derivative action, examine our accounting books and records or exercise appraisal rights.

A holder of shares may choose, at its discretion, to participate in the central clearing system for share certificates under the Law Concerning Central Clearing of Share Certificates and Other Securities of Japan. Participating shareholders must deposit certificates representing all of the shares to be included in this clearing system with the Japan Securities Depository Center. If a holder is not a participating institution in the Securities Center, it must participate through a participating institution, such as a securities company or bank having a clearing account with the Securities Center. All shares deposited with the Securities Center will be registered in the name of the Securities Center on our register of shareholders. Each participating shareholder will in turn be registered on our register of beneficial shareholders and be treated in the same way as shareholders registered on our register of shareholders. For the purpo se of transferring deposited shares, delivery of share certificates is not required. Entry of the share transfer in the books maintained by the Securities Center for participating institutions, or in the book maintained by a participating institution for its customers, has the same effect as delivery of share certificates. The registered beneficial owners may exercise the rights attached to the shares, such as voting rights, and will receive dividends (if any) and notices to shareholders directly from us. The shares held by a person as a registered shareholder and those held by the same person as a registered beneficial owner are aggregated for these purposes. Beneficial owners may at any time withdraw their shares from deposit and receive share certificates, subject to the limitations caused by the Japanese unit share system described below.

A new law to establish a new central clearing system for shares of listed companies and to eliminate the issuance and use of certificates for such shares was promulgated in June 2004 and the relevant law will come into effect within five years of the date of promulgation.  On the effective date, currently expected to be January 5, 2009, a new central clearing system will be established and the shares of all Japanese companies listed on any Japanese stock exchange, including our shares, will be subject to the new central clearing system.  On the same day, all existing share certificates for share of all Japanese companies listed on any Japanese stock exchange, including our shares, will become null and void and the transfer of such shares will be effected through entry in the books maintained under the new central clearing system.

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Shareholders’ Rights to Bring Actions Against Directors

The Company Law provides for the Japanese shareholder derivative action mechanism, which allows any shareholder who has held a share for the previous six months to demand that the corporation take action to protect the company and enforce a director’s duties. Derivative actions may be brought to “enforce the liability of directors” which refers to situations including, but not limited to, that where directors engage in self-interested transactions, or violate any law, ordinance or the articles of incorporation. If the board has not instituted an action within sixty days, the plaintiff-shareholder may initiate a lawsuit as a derivative action. The Company Law provides an exception to the sixty day waiting period, however, for cases in which waiting sixty days might cause the company irreparable damage. In such cases, the shareholder may institute the action immediately, but after having brought the action must notify the company without delay. So, for example, if a company might suffer irreparable damage from an illegal act of a director, a shareholder who has owned a share (in our case, under our Articles of Incorporation, excluding a holder of shares representing less than one unit under the unit share system described below) continuously for the previous six months may seek a provisional injunction prohibiting the director from performing the illegal act.

Distribution of Surplus

General

Under the Company Law, distributions of cash or other assets by joint stock corporations to their shareholders, so called “dividends”, are referred to as “distributions of Surplus” (“Surplus” is defined in “Restriction on Distributions of Surplus” below). We may make distributions of Surplus to the shareholders any number of times per fiscal year, subject to certain limitations described in “Restriction on Distributions of Surplus”. Under the Company Law, distributions of Surplus are required to be authorized by a resolution of a general meeting of shareholders unless the board of directors is so authorized under the articles of incorporation.  Our Articles of Incorporation provide that the Board of Directors has the authority to decide to make distribution of Surplus except for limited exceptions as provided by the Company Law, since we have satisfied the following requirement s:

(a)

the normal term of office of our Directors terminates on or prior to the date of conclusion of the ordinary general meeting of shareholders relating to the last fiscal year ending within the period of one year from the election of the Directors; and

(b)

our non-consolidated annual financial statements and certain documents for the last fiscal year present fairly our assets and profit or loss, as required by the ordinances of the Ministry of Justice.

Under our Articles of Incorporation, year-end dividends and interim dividends, if any, may be distributed to shareholders (or pledgees) appearing in the register of shareholders as of March 31 and September 30 of each year, respectively, pursuant to a resolution of our Board of Directors. In addition, as stated above, under the Company Law and our Articles of Incorporation, we may make further distributions of Surplus by resolution of our Board of Directors. Under our Articles of Incorporation, we are not obliged to pay any dividends in the form of cash that are left unclaimed for a period of three years after the date on which they first became payable.

Distributions of Surplus may be distributed in cash or in kind in proportion to the number of shares held by each shareholder. A resolution of our Board of Directors authorizing a distribution of Surplus must specify the kind and aggregate book value of the assets to be distributed, the manner of allocation of such assets to shareholders, and the effective date of the distribution. If a distribution of Surplus is to be made in kind, we may, pursuant to a resolution of our Board of Directors, grant a right to our shareholders to require us to make such distribution in cash instead of in kind. If no such right is granted to shareholders, the relevant distribution of Surplus must be approved by a special resolution of a general meeting of shareholders.

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Restriction on Distributions of Surplus

When we make a distribution of Surplus, we must, until the aggregate amount of our additional paid-in capital and legal reserve reaches one-quarter of our stated capital, set aside in our additional paid-in capital and/or legal reserve an amount equal to one-tenth of the amount of Surplus so distributed.

The amount of Surplus at any given time shall be calculated in accordance with the following formula:

A + B + C + D – (E + F + G)

In the above formula:

“A” = the total amount of ‘other capital surplus’ and ‘other retained earnings’, each such amount being that appearing on our non-consolidated balance sheet as of the end of the last fiscal year;

“B” = (if we have disposed of our treasury stock after the end of the last fiscal year) the amount of the consideration for such treasury stock received by us less the book value thereof;

“C” = (if we have reduced our stated capital after the end of the last fiscal year) the amount of such reduction less the portion thereof that has been transferred to additional paid-in capital or legal reserve (if any);

“D” = (if we have reduced our additional paid-in capital or legal reserve after the end of the last fiscal year) the amount of such reduction less the portion thereof that has been transferred to stated capital (if any);

“E” = (if we have cancelled our treasury stock after the end of the last fiscal year) the book value of such treasury stock;

“F” = (if we have distributed Surplus to our shareholders after the end of the last fiscal year) the total book value of the Surplus so distributed;

“G” = certain other amounts set forth in the ordinances of the Ministry of Justice, including (if we have reduced Surplus and increased our stated capital, additional paid-in capital or legal reserve after the end of the last fiscal year) the amount of such reduction and (if we have distributed Surplus to our shareholders after the end of the last fiscal year) the amount set aside in our additional paid-in capital or legal reserve (if any) as required by the ordinances of the Ministry of Justice.

The aggregate book value of Surplus distributed by us may not exceed a prescribed distributable amount (the “Distributable Amount”), as calculated on the effective date of such distribution. The Distributable Amount at any given time shall be equal to the amount of Surplus less the aggregate of the followings:

(a)

the book value of our treasury stock;

(b)

the amount of consideration for our treasury stock disposed of by us after the end of the last fiscal year; and

(c)

certain other amounts set forth in the ordinances of the Ministry of Justice, including (if the sum of one-half of good will and the deferred assets exceeds the total of stated capital, additional paid-in capital and legal reserve, each such amount being that appearing on our non-consolidated balance sheet as of the end of the last fiscal year) all or certain part of such exceeding amount as calculated in accordance with the ordinances of the Ministry of Justice.

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If we have become at our option a company with respect to which consolidated balance sheets should also be taken into consideration in the calculation of the Distributable Amount (renketsu haito kisei tekiyo kaisha), it will be required to further deduct from the amount of Surplus the excess amount, if any, of (x) the total amount of shareholders’ equity appearing on our non-consolidated balance sheet as of the end of the last fiscal year and certain other amounts set forth in the ordinances of the Ministry of Justice over (y) the total amount of shareholders’ equity and certain other amounts set forth in the ordinances of the Ministry of Justice appearing on our consolidated balance sheet as of the end of the last fiscal year.

If we have prepared interim financial statements as described below, and if such interim financial statements have been approved by the Board of Directors or (if so required by the Company Law) by a general meeting of shareholders, the Distributable Amount must be adjusted to take into account the amount of profit or loss, and the amount of consideration for our treasury stock disposed of by us, during the period in respect of which such interim financial statements have been prepared. We may prepare non-consolidated interim financial statements consisting of a balance sheet as of any date subsequent to the end of the last fiscal year and an income statement for the period from the first day of the current fiscal year to the date of such balance sheet. Interim financial statements so prepared by us must be approved by the Board of Directors and reviewed by our independent auditors, as required by the ordinances of the Ministry of J ustice.

For information as to Japanese taxes on dividends, see “Tax Considerations ― Japanese Taxation.”

Capital and Reserves

When we issue new shares, the entire amount of cash or other assets paid or contributed by subscribers for those new shares is required to be accounted for as stated capital, although we may account for an amount not exceeding one-half of the amount of such cash or assets as additional paid-in capital by resolution of the Board of Directors.

We may reduce our additional paid-in capital or legal reserve generally by resolution of a general meeting of shareholders, and in the case of reduction of additional paid-in-capital and if so decided by the same resolution, may account for the whole or any part of the amount of such reduction as stated capital. On the other hand, we may reduce our stated capital generally by special resolution of a general meeting of shareholders and, if so decided by the same resolution, may account for the whole or any part of the amount of such reduction as additional paid-in capital. In addition we may reduce our Surplus and increase either (i) stated capital or (ii) additional paid-in capital and/or legal reserve by the same amount, in either case by resolution of a general meeting of shareholders.

Stock Splits

We may at any time split the issued shares into a greater number of shares by resolution of our Board of Directors. When a stock split is to be made, so long as the only class of our outstanding stock is our common stock, we may increase the number of authorized shares to the extent that the ratio of such increase in authorized shares does not exceed the ratio of such stock split by amending our Articles of Incorporation, which amendment may be made without approval by shareholders.

Generally, shareholders do not need to exchange share certificates for new ones following a stock split, but certificates representing the additional shares resulting from the stock split will be issued to shareholders. Before a stock split, we must give public notice of the stock split, specifying the record date therefor, not less than two weeks prior to such record date.

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Japanese Unit Share System

Our Articles of Incorporation provide that 100 shares of common stock constitute one “unit.” The Company Law permits us, by resolution of our Board of Directors, to reduce the number of shares that constitutes one unit or abolish the unit share system, and amend our Articles of Incorporation to this effect without the approval of a shareholders’ meeting. The number of shares constituting a unit may not exceed 1,000 shares.

Transferability of Shares Representing Less Than One Unit

Our Articles of Incorporation and Share Handling Regulations provide that no share certificates shall, in general, be issued with respect to any shares constituting less than one unit. Because the transfer of shares normally requires delivery of the share certificates for the shares being transferred, any shares constituting less than one unit for which no share certificates are issued will not be transferable.

Because transfer of ADRs does not require a change in the ownership of the underlying shares, holders of ADRs evidencing ADSs that constitute less than one unit of shares are not affected by these restrictions in their ability to transfer the ADRs. However, because transfers of less than one unit of the underlying shares are normally prohibited under the unit share system, the deposit agreement provides that the right of ADR holders to surrender their ADRs and withdraw the underlying shares for sale in Japan may only be exercised as to whole units.

Right of a Holder of Shares Representing Less Than One Unit to Require Us to Purchase Its Shares

A holder of shares representing less than one unit may at any time require us to purchase our shares. These shares will be purchased at:

•

the closing price of the shares reported by the Osaka Securities Exchange Co., Ltd. (the “Osaka Securities Exchange”) on the day when the request to purchase is made; or

•

if no sale takes place on such stock exchange on that day, the closing price of the shares reported by the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”) on such day; or

•

if no sale takes place on either of such stock exchanges on such day, the price at which the shares are first traded on the Osaka Securities Exchange on the next day; or

•

if no sale takes place on such stock exchange on such day, the price at which the shares are first traded on the Tokyo Stock Exchange on such day; or

•

if no sale takes place on either of such stock exchanges on such day, the price at which the shares are first traded on either of such stock exchanges, provided that, if the shares are traded on both such exchanges on the same day, the relevant price shall be the price at which the shares are first traded on the Osaka Securities Exchange.

In such case, we will request payment of an amount equal to the brokerage commission applicable to the shares purchased. However, because holders of ADSs representing less than one unit are not able to withdraw the underlying shares from deposit, these holders will not be able to exercise this right as a practical matter.

Voting Right of a Holder of Shares Representing Less Than One Unit

A holder of shares representing less than one unit cannot exercise any voting rights pertaining to those shares. In calculating the quorum for various voting purposes, the aggregate number of shares representing less than one unit will be excluded from the number of outstanding shares. A holder of shares representing one or more whole units will have one vote for each unit of shares, except as stated in “— Voting Rights” below.

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A holder of shares representing less than one unit does not have any rights relating to voting, 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. In addition, a holder of shares constituting less than one unit does not have the right to institute a representative action by shareholders.

Other Rights of a Holder of Shares Representing Less Than One Unit

In accordance with the Company Law, our Articles of Incorporation provide that a holder of shares representing less than one unit does not have any other rights of a shareholder in respect of those shares, other than those provided by our Articles of Incorporation including the following rights:

•

to receive distribution of dividends;

•

to receive shares, cash or other assets in case of consolidation or split of shares, exchange or transfer of shares or corporate merger;

•

to be allotted rights to subscribe for new shares and other stock acquisition rights when such rights are granted to shareholders; and

•

to participate in any distribution of surplus assets upon liquidation.

Ordinary General Meeting of Shareholders

We normally hold our annual general meeting of shareholders in June of each year. In addition, we may hold an extraordinary general meeting of shareholders whenever necessary by giving at least two weeks’ advance notice. Under the Company Law, notice of any shareholders’ meeting must be given to each shareholder having voting rights or, in the case of a non-resident shareholder, to his resident proxy or mailing address in Japan in accordance with our Share Handling Regulations, at least two weeks prior to the date of the meeting.

Voting Rights

A shareholder is generally entitled to one vote per one unit of shares, as described under “— Japanese Unit Share System” above. In general, under the Company Law, a resolution can be adopted at a general meeting of shareholders by a majority of the voting rights represented at the meeting. The Company Law and our Articles of Incorporation require a quorum for the election of Directors and Corporate Auditors of not less than one-third of the voting rights. Our shareholders are not entitled to cumulative voting in the election of Directors. A corporate shareholder whose outstanding voting rights are in turn more than one-quarter directly or indirectly owned by us does not have voting rights. Shareholders may exercise their voting rights through proxies, provided that those proxies are also shareholders who have voting rights.

The Company Law and our Articles of Incorporation provide that certain important matters shall be approved by a “special resolution” of general meeting of shareholders.  Our Articles of Incorporation provide that the quorum for a special resolution is one-third of the total number of voting rights and the approval of at least two-thirds of the voting rights presented at the meeting is required for adopting a special resolution. Such important matters include:

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(a)

reduction of the stated capital;

(b)

amendment to the Articles of Incorporation;

(c)

establishment of a 100% parent-subsidiary relationship by way of share exchange or share transfer;

(d)

dissolution, merger or consolidation;

(e)

company split;

(f)

transfer of the whole or an important part of our business;

(g)

taking over of the whole of the business of any other corporation;

(h)

removal of a Corporate Auditor;

(i)

any issuance of shares or transfer of existing shares as treasury stock to persons other than the shareholders at a “specially favorable” price;

(j)

any issuance of stock acquisition rights (including those incorporated in bonds with stock acquisition rights) to persons other than the shareholders under “specially favorable” conditions;

(k)

purchase of shares by us from a specific shareholder other than our subsidiary;

(l)

consolidation of shares;

(m)

distribution of Surplus in kind with respect to which shareholders are not granted the right to require us to make such distribution in cash instead of in kind; and

(n)

exemption from a portion of liability of the Directors, Corporate Auditors or independent auditors.

However, under the Company Law, no shareholder approval, whether by an ordinary resolution or a special resolution at a general meeting of shareholders, is required for any matter described in (a) through (g) above, and such matter may be decided by the Board of Directors, if it satisfies certain criteria prescribed by the Company Law as are necessary to determine that its impact is immaterial.

The voting rights of holders of ADSs are exercised by the depositary based on instructions from those holders. With respect to voting by holders of ADRs, please see Item 10 of our registration statement on Form 20-F filed on September 18, 2001.

Subscription Rights

Holders of shares have no pre-emptive rights. Authorized but unissued shares may be issued at such times and upon such terms as our Board of Directors determines, subject to the limitations as to the issue of new shares at a ‘‘specially favorable’’ price in which case a special resolution of general meeting of shareholders is required as described in ‘‘- Voting Rights’’ above. The Board of Directors may, however, determine that shareholders be given subscription rights in connection with a particular issue of new shares. In this case, such rights must be given on uniform terms to all shareholders as of a specified record date of which not less than two weeks’ prior public notice must be made. Each of the shareholders to whom such rights are given must also be given at least two weeks’ prior notice of the date on which such rights will expire.

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Stock Acquisition Rights

We may issue stock acquisition rights (shinkabu yoyakuken) or bonds with stock acquisition rights (shinkabu yoyakuken-tsuki shasai). Except where the issue would be on ‘‘specially favorable’’ conditions, the issue of stock acquisition rights or bonds with stock acquisition rights may be authorized by a resolution of the Board of Directors. Subject to the terms and conditions thereof, holders of stock acquisition rights may acquire a prescribed number of shares by exercising their stock acquisition rights and paying the exercise price at any time during the exercise period thereof. Upon exercise of stock acquisition rights, we will be obliged to either issue the relevant number of new shares or transfer the necessary number of existing shares held by us as treasury stock to the holder.

Pursuant to the resolution of the Board of Directors held on September 30, 2003, 15,000 stock acquisition rights were issued on October 17, 2003, in connection with the public offering of ¥30 billion zero coupon convertible bonds due 2008 with an issue price of 103% of the principal amount of the bonds. As of March 31, 2008, there were 13,500 outstanding stock acquisition rights, which represent rights to acquire 4,022,040 shares of common stock with the conversion price of ¥6,914.40 per share (as adjusted) during the exercise period ending on October 3, 2008.

Liquidation Rights

In the event of liquidation, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed among the shareholders in proportion to the number of shares they own.

Liability to Further Calls or Assessments

All of our currently outstanding shares, including shares represented by the ADSs, are fully paid and nonassessable.

Share Registrar

The Sumitomo Trust and Banking Company, Limited is the share registrar for the shares. Sumitomo Trust’s office is located at 5-33, Kitahama 4-chome, Chuo-ku, Osaka, 540-0041, Japan. Sumitomo Trust maintains our register of shareholders and records transfers of record ownership upon presentation of share certificates.

Record Date

The close of business on March 31 is the record date for our year-end dividends, if paid, and the close of business on September 30 is the same for our interim dividends, if paid. A holder of shares constituting one or more “units” who is registered as a holder on our register of shareholders at the close of business as of March 31 is also entitled to exercise shareholders’ voting rights at the annual general meeting of shareholders with respect to the fiscal year ending on March 31. In addition, we may set a record date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’ public notice.

The shares generally trade ex-dividend or ex-rights in the Japanese stock exchanges on the third business day before a record date (or if the record date is not a business day, the fourth business day prior thereto), for the purpose of dividends or rights offerings.

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Repurchase by Nidec of Shares

Under the Company Law and our Articles of Incorporation, we may acquire our shares (i) by soliciting all our shareholders to offer to sell our shares held by them (in this case, the certain terms of such acquisition, such as the total number of the shares to be purchased and the total amount of consideration, shall be set by an ordinary resolution of a general meeting of shareholders in advance, and acquisition shall be effected pursuant to a resolution of the Board of Directors), (ii) from a specific shareholders other than any of our subsidiaries (pursuant to a special resolution of a general meeting of shareholders), (iii) from any of our subsidiaries (pursuant to a resolution of our Board of Directors), or (iv) by way of purchase on any Japanese stock exchange on which our shares are listed or by way of tender offer (in either case pursuant to an ordinary resolution of a general meeting of shareholders). In the case of (ii) abo ve, any other shareholder may make a request to the Board of Directors that such other shareholder be included as a seller in the proposed purchase, provided that no such right will be available if the purchase price or any other consideration to be received by the relevant specific shareholder will not exceed the last trading price of the shares calculated in a manner set forth in the ordinances of the Ministry of Justice.

These acquisitions are subject to the condition that the aggregate amount of the purchase price must not exceed the Distributable Amount as described in “— Distribution of Surplus” above. We may hold our shares acquired in compliance with the provisions of the Company Law, and may generally dispose of or cancel such shares by resolution of the Board of Directors.

In addition, we may acquire our shares by means of repurchase of any number of shares constituting less than one “unit” upon the request of the holder of those shares, as described under “― Japanese Unit Share System” above.

American Depositary Receipts

For information regarding American Depositary Receipts and our depositary, please see Item 10 of our registration statement on Form 20-F filed on September 18, 2001.

Reporting of Substantial Shareholdings

The Financial Instruments and Exchange Law of Japan and its related regulations require any person who has become, solely or jointly, a holder of more than 5% of the total issued shares with voting rights of a company that is listed on any Japanese stock exchange to file a report with the Director of the competent Local Finance Bureau of the Ministry of Finance within five business days. With certain exceptions, a similar report must also be filed in respect of any subsequent change of 1% or more in the holding of shares with voting rights or of any specified changes set out in any previously-filed reports. For this purpose, shares issuable to such person upon exercise of stock acquisition rights are taken into account in determining both the number of shares with voting rights held by the holder and the issuer’s total issued shares with voting rights.

Daily Price Fluctuation Limits under Japanese Stock Exchange Rules

Share 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 share, 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 shares at such price on a particular trading day, or at all.

On September 12, 2008, the closing price of our shares on the Osaka Securities Exchange was ¥6,940 per share. The following table shows the daily price limit for a stock on the Osaka Securities Exchange with a closing price of between ¥5,000 and ¥10,000 per share, as well as the daily price limit if our per share price were to rise to between ¥10,000 and ¥20,000, or fall to between ¥3,000 and ¥5,000. Other daily price limits would apply if our per share price moved to other ranges.

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Selected Daily Price Limits

Selected Daily Price Limits
Previous Day’s Closing Price or Special Quote				Maximum Daily Price Movement
Over	¥ 3,000	Less than	¥ 5,000	¥ 500
Over	5,000	Less than	10,000	1,000
Over	10,000	Less than	20,000	2,000

For a history of the trading price of our shares on the Osaka Securities Exchange, see Item 9.A of this annual report.

C. Material Contracts.

We have not entered into any material contracts, other than in the ordinary course of business, within the two years immediately preceding the date of this document or any contract, other than in the ordinary course of business, which contains any provision under which we have any obligation or entitlement which is material to us as at the date of this document.

D. Exchange Controls.

Acquisition or Disposition of Shares or ADS

The Foreign Exchange and Foreign Trade Law of Japan governs certain aspects relating to the acquisition and holding of securities by “non-residents of Japan” and “foreign investors”.

In general, acquisition of shares of stock of a Japanese company listed on any Japanese stock exchange by a non-resident of Japan from a resident of Japan is not subject to any prior notification requirement, but subject to a post reporting requirement by the resident.

If a foreign investor acquires shares of a Japanese company listed on a Japanese stock exchange and as a result of this acquisition directly or indirectly holds, aggregated with existing holdings, 10% or more of the issued shares of the company, the foreign investor is, in general, required to report the acquisition to the Minister of Finance and any other competent ministers via the Bank of Japan within 15 days from and including the date of acquisition. In exceptional cases, a prior notification is required in respect of the acquisition.

“Non-residents of Japan” are generally defined as individuals who are not resident in Japan and corporations whose principal offices are located outside Japan.  Branches and other offices of Japanese corporations located outside Japan are considered as non-residents of Japan, and branches and other offices located within Japan of foreign corporations are considered as residents of Japan. “Foreign investors” are generally defined to be (i) individuals not resident in Japan, (ii) corporations which are organized under the laws of foreign countries or whose principal offices are located outside Japan, and (iii) corporations of which (a) 50% or more of the shares are held directly or indirectly by (i) or (ii) above, (b) a majority of officers consists of non-residents of Japan or (c) a majority of officers having the power of representation consists of non-residents of Japan.

Dividends and Proceeds of Sale

Under the Foreign Exchange and Foreign Trade Law, dividends paid on, and the proceeds of sales in Japan of shares held by non-residents of Japan may in general be converted into any foreign currency and repatriated abroad.

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Under the terms of the deposit agreement pursuant to which our ADSs are issued, the depositary is required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holder of ADSs. For additional information regarding our ADSs, please see Item 10 of our registration statement on Form 20-F filed on September 18, 2001.

E. Taxation.

This section describes the material United States federal income and Japanese tax consequences of owning shares or ADSs. It applies to you only if you hold your shares or ADSs as capital assets for tax purposes. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:

•

a dealer in securities;

•

a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings;

•

a tax-exempt organization;

•

a life insurance company

•

a person liable for alternative minimum tax;

•

a person that actually or constructively owns 10% or more of the voting stock of Nidec;

•

a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or

•

a person whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions and the laws of Japan all as currently in effect, as well as on the income tax treaty between the United States of America and Japan (the “Treaty”). These laws are subject to change, possibly on a retroactive basis. In addition, this section is based in part upon the representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.

You are a U.S. holder if you are a beneficial owner of shares or ADSs and you are:

•

a citizen or resident of the United States;

•

a domestic corporation;

•

an estate whose income is subject to United States federal income tax regardless of its source; or

•

a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

You should consult your own tax advisor regarding the United States federal state and local and the Japanese and other tax consequences of owning and disposing of shares and ADSs in your particular circumstances.

In general, and taking into account the earlier assumptions, for United States federal income tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to United States federal income tax.

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United States Federal Income Taxation

Taxation of Dividends

Under the United States federal income tax laws, and subject to the passive foreign investment company, or PFIC, rules as discussed below, if you are a U.S. holder, the gross amount of any dividend paid by Nidec out of its current or accumulated earnings and profits (as determined for United States federal income tax purposes) will be subject to U.S. federal income taxation. If you are a noncorporate U.S. holder, dividends paid to you in taxable years beginning before January 1, 2011 that constitute qualified dividend income will be taxable to you at a maximum tax rate of 15% provided that you hold the shares or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements. Dividends we pay with respect to the shares or ADSs generally will be qualified dividend income. You must include any Japanese tax withheld from the dividend payment in this gross am ount even though you do not in fact receive it. The dividend will be taxable to you when you, in the case of shares, or the depositary, in the case of ADSs, receive the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. The amount of the dividend distribution that you must include in your income as a U.S. holder will be the U.S. dollar value of the yen payments made, determined at the spot yen/U.S. dollar rate on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date you include the dividend payment in income to the date you convert the payment into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special ta x rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings and profits, as determined for United States federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your basis in the shares or ADSs and thereafter as capital gain.

Subject to certain limitations, the Japanese tax withheld in accordance with the Treaty and paid over to Japan will be creditable against your United States federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the maximum 15% tax rate. To the extent a refund of the tax withheld is available to you under Japanese law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against your United States federal income tax liability.

Dividends will be income from sources outside the United States. Dividends paid in taxable years beginning before January 1, 2007 generally will be “passive” or “financial services” income, and dividends paid in taxable years beginning after December 31, 2006 will, depending on your circumstances, be “passive” or “general” income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to you.

Taxation of Capital Gains

Subject to the PFIC rules as discussed below, if you are a U.S. holder and you sell or otherwise dispose of your shares or ADSs, you will recognize capital gain or loss for United States federal income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in your shares or ADSs. Capital gain of a noncorporate U.S. holder that is recognized in taxable years beginning before January 1, 2011 is generally taxed at a maximum rate of 15% where the holder has a holding period greater than one year. The gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes.

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PFIC Rules

Nidec believes that shares and ADSs should not be treated as stock of a PFIC for United States federal income tax purposes, but this conclusion is a factual determination that is made annually and thus may be subject to change.  If Nidec were to be treated as a PFIC, unless a U.S. holder elects to be taxed annually on a mark-to-market basis with respect to the shares or ADSs, gain realized on the sale or other disposition of your shares or ADSs would in general not be treated as capital gain.  Instead, if you are a U.S. holder, you would be treated as if you had realized such gain and certain “excess distributions” ratably over your holding period for the shares or ADSs and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain exceptions, your shares or ADSs will be t reated as stock in a PFIC if Nidec were a PFIC at any time during your holding period in your shares or ADSs. Dividends that you receive from Nidec will not be eligible for the special tax rates applicable to qualified dividend income if Nidec is treated as a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income.

Japanese Taxation

The following is a summary of the principal Japanese tax consequences to owners of our shares who are non-resident individuals or non-Japanese corporations without a permanent establishment in Japan to which the relevant income is attributable. The changes are subject to changes in the applicable Japanese laws or double taxation conventions occurring after that date. This summary is not exhaustive of all possible tax considerations which may apply to a particular investor. Potential investors should satisfy themselves as to:

•

the overall tax consequences of the acquisition, ownership and disposition of shares or ADSs, including specifically the tax consequences under Japanese law;

•

the laws of the jurisdiction of which they are resident; and

•

any tax treaty between Japan and their country of residence, by consulting their own tax advisers.

Generally, a non-resident shareholder is subject to Japanese withholding tax on dividends on the shares paid by us. A stock split is not subject to Japanese income or corporation tax, as it is characterized merely as an increase of number of shares (as oppose to an increase of value of shares) from Japanese tax perspectives. A conversion of retained earnings or legal reserve (but other than additional paid-in capital, in general) into stated capital on a non-consolidated basis is not characterized as a deemed dividend for Japanese tax purposes, and therefore such a conversion does not trigger Japanese withholding taxation (Article 2(16) of the Japanese Corporation Tax Law and Article 8(1)(xiv) of the Japanese Corporation Tax Law Enforcement Order).

If we purchase our listed shares by way of a tender offer for the purpose of cancellation with retained earnings, the selling shareholders (both individuals and corporations) are in general required to recognize (i) a deemed dividend corresponding to a price into share capital portion (including additional paid-in capital) and retained earnings portion on a non-consolidated basis under Article 24(1)(iv) of the Japanese Corporation Tax Law, and (ii) capital gain or loss computed as a difference between the basis of the shares subject to the tender offer at the shareholder’s level and the amount of the consideration for the tender offer (deducting the amount corresponding to the deemed dividend computed as (i) above) under Article 61-2(1)(i) of the same law. On the other hand, no deemed dividend is required to be recognized if we purchase our shares at/through the stock market due to the difficulty of identifying each shareholder sold our shares (Article 24(1)(iv) of the Japanese Corporation Tax Law and Article 23(3) of the Japanese Corporation Tax Law Enforcement Order).

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In addition, in the case of individual shareholders who sell our shares on an over-the-counter basis, no deemed dividend is required to be recognized until March 31, 2009 (two years extension is provided for under the 2007 Japanese tax legislation) due to the operation of a temporary measure (Article 9-6 of the Japanese Special Tax Measures Law) and therefore they are only required to recognize capital gain or loss of the shares subject to the tender offer. In the meantime, when shares are acquired by us (whether by way of a tender offer or otherwise) for the purpose of cancellation with retained earnings, the shareholders (both individuals and corporations) whose shares were not canceled are not subject to the deemed dividend taxation (such a tax treatment is introduced under the 2001 tax legislation).

Unless an applicable tax treaty, convention or agreement reduces the maximum rate of withholding tax, the rate of Japanese withholding tax applicable to dividends on the listed shares such as those paid by us to non-resident shareholders is currently 7% which is applicable for the period from January 1, 2004 to December 31, 2008 (the expiration date is shortened by three months under the 2008 Japanese tax legislation) and 15% rate will apply thereafter, except for dividends paid to any individual shareholder who holds 5% or more of the issued shares for which the applicable rate is 20% (under Article 9-3(1) and (2) of the Japanese Special Tax Measures Law, and Article 182(2) of the Japanese Income Tax Law). Japan has income tax treaties, conventions or agreements whereby the above mentioned withholding tax rate is generally promulgated as 15% for portfolio investors with, among others, Australia, Belgium, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, The Netherlands, New Zealand, Norway, Singapore, Spain, Sweden and Switzerland. Under the tax treaty between the United States and Japan (the “Treaty”) of which withholding tax treatments is applicable effective from July 1, 2004, the withholding tax rate on dividends (those declared on or after July 1, 2004) is 10% for portfolio investors, if they do not have a permanent establishment in Japan and the shares with respect to which such dividends are paid are not related in-fact to such permanent establishment, and if they are qualified US residents eligible to enjoy treaty benefits. It shall be noted that, under the tax treaty between the US and Japan, withholding tax on dividends declared after July 1, 2004 is exempt from Japanese taxation by way of withholding or otherwise for pension funds which are qualified US residents eligible to enjoy treaty benefits unless such dividends are derived from the carrying on of a business, directly or indirectly, by such pension funds. The similar changes are made to the new tax treaty between the United Kingdom and Japan which is applicable to dividends declared on or after January 1, 2007 due to the renewal of the Tax Treaty. The Tax Treaty between France and Japan is also renewed effective from January 1, 2008 under which the standard treaty withholding rate for portfolio investors on dividends is to be reduced from 15% to 10%. In addition, the tax treaty between Australia and Japan will be renewed and expected to come into effect as of January 1, 2009 under which the standard treaty withholding rate for portfolio investors on dividends will also be reduced from 15% to 10%. Non-resident shareholders who are entitled to a reduced rate of Japanese withholding tax on payment by us of dividends on the shares are required to submit an Application Form for Income Tax Convention regarding Relief from Japanese Income Tax on Dividends in advance through us to the relevant tax authority before payment of dividends. A standing proxy for non-resident shareholders may provide such application service. See Item 10.B. of this annual report. Non-resident shareholders who do not submit an application in advance will be entitled to claim the refund of withholding taxes withheld in excess of the rate of an applicable tax treaty from the relevant Japanese tax authority. For Japanese tax purposes, the treaty rate normally applies superseding the tax rate under the domestic law. However, due to the so-called preservation doctrine under Article 1(2) of the Treaty, and/or under Article 3-2 of the Special Measures Law for the Income Tax Law, Corporation Tax Law and Local Taxes Law with respect to the Implementation of Tax Treaties, if the tax rate under the domestic tax law is lower than that promulgated under the applicable income tax treaty, then the domestic tax rate is still applicable. If the domestic tax rate still applies, no treaty application is required to be filed, consequently.

Gains derived from the sale of shares outside Japan, or from the sale of shares within Japan by a nonresident shareholder as a portfolio investor, are generally not subject to Japanese income or corporation taxes.

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Japanese inheritance and gift taxes may be assessed against an individual who has acquired shares as a legatee, heir or donee, even if the individual is not a Japanese resident.

F. Dividends and Paying Agents.

Not applicable.

G. Statement by Experts.

Not applicable.

H. Documents on Display.

We file periodic reports and other information with the Securities and Exchange Commission. You may read and copy any document that we file with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of its public reference room. The Securities and Exchange Commission also maintains a web site at www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the Securities and Exchange Commission.  You may also inspect our SEC reports and other information at the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Some of this information may also be found on our website at www.nidec.co.jp/english/ir/index.html. Information on our website does not form part of this annual report.

As a foreign private issuer, we are exempt from the rules under the Securities Exchange Act of 1934 prescribing the furnishing and content of proxy statements to shareholders.

I. Subsidiary Information.

Not applicable.

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Item 11. Quantitative and Qualitative Disclosure About Market Risk.

We hold financial instruments in the normal course of business and are exposed to market risk, including changes in foreign exchange rates, interest rates and equity prices. We employ a variety of measures to manage market risk related to our financial instruments, including cash and cash equivalents, financial receivables, securities investments, long-term debt and short-term borrowings.

We do not have a policy of hedging all or a defined portion of specific risks. Accordingly, our decisions with regard to the use of derivative instruments are made on a case-by-case basis, and the nature and quantity of open derivative contracts can vary significantly over time. However, from time to time, we enter into derivative financial instruments which include foreign exchange forward contracts, foreign currency option agreements, interest rate swap agreements and interest rate cap agreements. Interest rate swap and cap agreements are designed to reduce our exposure to losses resulting from adverse fluctuations in interest rates on the underlying financial instruments. Foreign currency option agreements are designed to reduce our exposure to losses resulting from adverse fluctuations in foreign exchange rates on underlying accounts payable and anticipated purchase transactions in foreign currency. Foreign exchange forward con tracts are designed to reduce our exposure to losses resulting from adverse fluctuations in foreign exchange rates on our foreign currency accounts receivables, other receivables and accounts payable.

Foreign currency exchange rate risk

Transaction risk

A significant portion of our business is conducted in currencies other than yen, most significantly the U.S. dollar. 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. To the extent that there are any open foreign currency, i.e., U.S. dollar-denominated positions, we are exposed to the risk of foreign currency fluctuations. Any gains and losses that result are recorded in our results of operations for the period. The foreign exchange gain (loss) represents the differences between the value of monetary assets and liabilities when they are originated at exchange rates when a purchase or sale occurs and their value at the prevailing exchange rate when they are settled or translated at year-end. Foreign currency-denominated monetary assets may include bank deposits, trade receivables and other receivables and m onetary liabilities may include trade and notes payable, borrowings and debt.

Translation risk

Our reporting currency is the Japanese yen. We have assets and liabilities outside Japan that are subject to fluctuations in foreign currency exchange rates. Our assets and liabilities that are outside Japan are primarily located in Singapore, Thailand, the Philippines and China. We prepare financial statements of our foreign operations in their functional currencies prior to consolidation in our financial statements. Translation gains and losses arising from changes in the value of the reporting currency relative to the functional currencies of the underlying operations are recorded outside of our statement of operations in other comprehensive income until we dispose of or liquidate (which has not occurred in the past, nor do we expect it to occur frequently in the future) the relevant foreign operation.

Foreign currency risk

As our investments in foreign subsidiaries with a functional currency other than the Japanese yen are generally considered long-term, we do not hedge these net investments.

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From time to time we utilize foreign currency forward contracts and foreign currency options derivative instruments to manage exposure to exchange rate volatility for accounts payable, accounts receivable and anticipated transactions denominated in foreign currencies. However, we do not use instruments with leverage, nor exotic options, to mitigate market risk. Changes in the fair values of our foreign exchange forward contracts and options are recognized as gains and losses on derivative instruments within our results of operations. The table below sets forth the aggregate contract amounts and weighted-average contracted forward rates for annual maturities of the foreign exchange forward contracts for the next five years.

Foreign currency derivatives at March 31, 2008

	Maturity date
	For the year ending March 31
	2009	2010	2011	2012	2013	Thereafter	Total	Fair Value
Foreign Exchange Forward Contracts
Sell U.S. dollars (Buy Yen)
Contract amounts (in millions)	¥ 79	-	-	-	-	-	¥ 79	¥ 4
Weighted-average contracted forward Rate (yen per U.S.$1)	104.99	-	-	-	-	-	104.99
Sell U.S. dollars (Buy S$ *)
Contract amounts (in millions)	¥ 101	-	-	-	-	-	¥ 101	¥ 1
Weighted-average contracted forward Rate (S$ per U.S.$1)	1.39	-	-	-	-	-	1.39

*Note: In the above table, “S$” refers to the Singaporean dollar.

Interest rate risk

We enter into interest rate swaps and other contracts to reduce our market risk exposure from changes in interest rates. 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.

The table below sets forth information about our derivative financial instruments and other financial instruments that are sensitive to changes in interest rates. For our debts and receivables, it indicates whether the interest component is fixed or variable, the amount of the cash flows and the expected weighted-average interest rate for the next five years and thereafter and the items’ fair value. For our interest rate caps, the table presents payment type, notional principal amounts and weighted-average interest rates by expected (contracted) maturity dates and the items’ fair value. Notional amounts are used to calculate the contractual payments to be exchanged under the contracts.

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Interest rate risk at March 31, 2008

(Yen in millions)
	Maturity date
	2009		2010		2011		2012		2013		Thereafter		Total		Fair Value
Long-term Loan Receivable	(Yen in millions)
Fixed Rate
Principal cash flows	¥ 7		¥ 7		¥ 6		¥ 5		¥ 6		¥ 31		¥ 62		¥ 68
Weighted-average interest rate	3.10	%	3.23	%	3.25	%	3.23	%	3.95	%	3.22	%	3.29	%
Floating Rate
Principal cash flows	102		57		34		23		10		4		230		230
Weighted-average interest rate	2.07	%	3.03	%	3.21	%	3.40	%	3.59	%	3.21	%	2.69	%
Long-term Debt
Fixed Rate (long-term loan)
Principal cash flows	35		22		33		33		33		147		303		284
Weighted-average interest rate	1.58	%	0.41	%	0.28	%	0.29	%	0.30	%	0.61	%	0.60	%
Fixed Rate (convertible bonds)
Principal cash flows	27,089		-		-		-		-		-		27,089		28,898
Weighted-average interest rate	0.00	%	-		-		-		-		-		0.00	%
Floating Rate (long-term loan)
Principal cash flows	0		1		1		1		1		3		7		7
Weighted-average interest rate	2.03	%	2.17	%	2.36	%	2.56	%	2.78	%	3.35	%	2.92	%
Interest Rate Derivatives
Interest Rate Swaps
Fixed rate payments
Notional amounts	1,200		-		-		-		-		-		1,200		7
Weighted-average interest rate	1.42	%	-		-		-		-		-		1.42	%
Floating rate receivables
Notional amounts	1,200		-		-		-		-		-		1,200
Weighted-average interest rate	1.08	%	-		-		-		-		-		1.08	%
Interest Rate Currency Swaps
Fixed rate payments
Principal cash flows (THB)	24		24		24		24		-		-		96
Notional amounts	24		24		24		24		-		-		96		12
Weighted-average interest rate	6.65	%	6.65	%	6.65	%	6.65	%	-		-		6.65	%
Floating rate receivables
Principal cash flows (JPY)	24		24		24		24		-		-		96
Notional amounts	24		24		24		24		-		-		96
Weighted-average interest rate	1.46	%	1.46	%	1.32	%	1.33	%	-		-		1.39	%

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Equity security price risk

We have marketable equity securities classified as available-for-sale securities and held-to-maturity securities. At March 31, 2007, the fair value of available-for-sale securities was ¥20,118 million and we had no held-to-maturity securities. At March 31, 2008, the fair value of available-for-sale securities and held-to-maturity securities were ¥13,611 million and ¥100 million, respectively.

If the fair value of available-for-sale securities were to change by 10%, the impact on the carrying amount of those securities as of March 31, 2008 would be ¥1,361 million.

For the information relating to other-than-temporary losses on marketable securities, see Item5A. “Operating results - Application of Critical Accounting Policies”.

Commodity price risk

We had no open commodity derivative positions for the year ended March 31, 2007 or 2008.

Item 12. Description of Securities Other Than Equity Securities.

Not applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies.

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.

None.

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Item 15. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of March 31, 2008. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2008, our disclosure controls and procedures were effective. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with applicable generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management has evaluated the effectiveness of our internal control over financial reporting based upon criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on this assessment, management determined that we maintained effective internal control over financial reporting as of March 31, 2008.

Our independent registered public accounting firm, Kyoto Audit Corporation, has audited the effectiveness of our internal control over financial reporting as of March 31, 2008, as stated in their report which appears on page F-2 of this annual report on Form 20-F.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the fiscal year ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Item 16A. Audit Committee Financial Expert.

The Board of Corporate Auditors of Nidec has determined that Nidec does not have an “audit committee financial expert” as defined in Item 16A of Form 20-F serving on the Board of Corporate Auditors. Nidec believes that the combined knowledge, skills and experience of the Board of Corporate Auditors enables them, as a group, to act effectively in the fulfillment of their tasks and responsibilities, including those under the Sarbanes-Oxley Act of 2002. In addition, the Corporate Auditors have the power and authority to engage outside experts as they deem appropriate to provide them with advice on matters related to their responsibilities.

Item 16B. Code of Ethics.

Nidec has adopted a written code of ethics for its chief executive officer, chief financial officer, chief accounting officer and other senior officers which has been effective as of April 1, 2004. Nidec’s code of ethics is attached to this annual report on Form 20-F as exhibit 11.1.

Item 16C. Principal Accountant Fees and Services

Principal Independent Registered Public Accounting Firm Audit Fees and Services Fees

Kyoto Audit Corporation served as our independent registered public accounting firm for the fiscal year 2008, and audited our consolidated financial statements included in this annual report on Form 20-F.

MISUZU PricewaterhouseCoopers served as our independent registered public accounting firm until June 22, 2007. Since June 22, 2007, Kyoto Audit Corporation has been our independent registered public accounting firm. See “Change of Our Independent Registered Public Accounting Firm” below.

As MISUZU PricewaterhouseCoopers terminated its operations on July 31, 2007, the Kyoto office of MISUZU PricewaterhouseCoopers decided to establish Kyoto Audit Corporation to succeed to the business it formerly carried out as part of MISUZU PricewaterhouseCoopers. As such, Kyoto Audit Corporation is the successor to the assurance practice and business of the Kyoto office of MISUZU PricewaterhouseCoopers. Kyoto Audit Corporation’s personnel are substantially the same as those previously employed by the Kyoto office of MISUZU PricewaterhouseCoopers, including those who have been assigned to us.

The following table presents the aggregate fees for professional services and other services rendered by MISUZU PricewaterhouseCoopers and member firms of the PricewaterhouseCoopers network to us in fiscal year 2007 and by Kyoto Audit Corporation and member firms of the PricewaterhouseCoopers to us in fiscal year 2008.

	Yen in millions		U.S. dollars in thousands
	For the year ended March 31,		For the year ended
Type of Fee	2007	2008	March 31, 2008
Audit Fees (1)	¥ 849	¥ 796	$ 7,945
Audit Related Fees (2)	7	11	109
Tax Fees (3)	34	18	180
All Other Fees (4)	1	0	0
Total	¥ 891	¥ 825	$ 8,234

(1) Audit fees consist of the fees for professional services provided in connection with the audit of our annual financial statements and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

(2) Audit related fees are fees for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and were not otherwise included in Audit Fees. This includes fees for the audits of employee benefit plans, due diligence to related mergers and acquisitions, attestations by MISUZU PricewaterhouseCoopers and Kyoto Audit Corporation that are not required by statute or regulation, and consulting on financial accounting/reporting standards.

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(3) Tax fees represent fees for professional services rendered by MISUZU PricewaterhouseCoopers and Kyoto Audit Corporation for tax compliance, tax advice and tax planning.

(4) All other fees include fees for products and services provided by MISUZU PricewaterhouseCoopers and Kyoto Audit Corporation other than the services reported above.

The Board of Corporate Auditors has concluded the provision of the non-audit services listed above is compatible with maintaining the independence of MISUZU PricewaterhouseCoopers and Kyoto Audit Corporation.

Pursuant to Rule 2-01(c)(7) of Regulation S-X, the Board of Corporate Auditors pre-approves the engagement of our principal accountants and their affiliates to render audit and non-audit services to us. As a general rule, the Board of Corporate Auditors specifically pre-approves the engagement of such services after examining the details of the proposal engagement submitted by our management. With respect to certain specified audit and non-audit services, once every year, the Board of Corporate Auditors generally pre-approves the engagement of our principal accountants and their affiliates to render such services pursuant to the Board’s pre-approval policies and procedures. Under the pre-approval policies and procedures, services that are the subject of general pre-approval are specifically identified, together with the maximum aggregate fee amount that may be paid for each such service. The Board of Corporate Auditors reviews this list of specific services and related matters on an annual basis. All services to be rendered by our principal accountants or their affiliates that are not specifically identified must be specifically pre-approved by the Board of Corporate Auditors. Even for those services that are specifically identified, the rendering of such services for fees in excess of the maximum aggregate fee amount under the pre-approval policies and procedures must be specifically pre-approved by the Board of Corporate Auditors.

None of the services described above under this Item 16C were waived from the pre-approval requirement pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.

Change of Our Independent Registered Public Accounting Firm

On May 30, 2007, MISUZU PricewaterhouseCoopers announced that it would terminate its business and dissolve effective July 31, 2007. As a result, the audit team of MISUZU PricewaterhouseCoopers that has been covering us transferred to a newly established public accounting firm, Kyoto Audit Corporation, which registered with the Public Company Accounting Oversight Board on June 12, 2007. We appointed Kyoto Audit Corporation as our new independent registered public accounting firm.

Item 16D. Exemptions from the Listing Standards for Audit Committees.

With respect to the requirements of Rule 10A-3 under the Securities Exchange Act of 1934 relating to listed company audit committees, which apply to us through Section 303A.06 of the New York Stock Exchange’s Listed Company Manual, we rely on an exemption provided by paragraph (c)(3) of that Rule available to foreign private issuers with boards of corporate auditors meeting certain requirements. For a New York Stock Exchange-listed Japanese company with a Board of Corporate Auditors, the requirements for relying on paragraph (c)(3) of Rule 10A-3 are as follows:

(a)       The Board of Corporate Auditors must be established, and its members must be selected, pursuant to Japanese law expressly requiring such a board for Japanese companies that elect to have a corporate governance system with corporate auditors.

(b)       Japanese law must and does require the Board of Corporate Auditors to be separate from the board of directors.

(c)       None of the members of the Board of Corporate Auditors is elected by management, and none of the listed company’s executive officers is a member of the Board of Corporate Auditors.

104

(d)       Japanese law must and does set forth standards for the independence of the members of the Board of Corporate Auditors from the listed company or its management.

(e)       The Board of Corporate Auditors, in accordance with Japanese law or the listed company’s governing documents, must be responsible, to the extent permitted by Japanese law, for the appointment, retention and oversight of the work of any registered public accounting firm engaged (including, to the extent permitted by Japanese law, the resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed company, including its principal accountant which audits its consolidated financial statements included in its annual reports on Form 20-F.

(f)       To the extent permitted by Japanese law:

-     the Board of Corporate Auditors must establish procedures for (i) the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;

-     the Board of Corporate Auditors must have the authority to engage independent counsel and other advisers, as it determines necessary to carry out its duties; and

-     the listed company must provide for appropriate funding, as determined by its Board of Corporate Auditors, for payment of (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us, (ii) compensation to any advisers employed by the Board of Corporate Auditors, and (iii) ordinary administrative expenses of the Board of Corporate Auditors that are necessary or appropriate in carrying out its duties.

In our assessment, our Board of Corporate Auditors, which meets the requirements for reliance on the exemption in paragraph (c)(3) of Rule 10A-3 described above, is not materially less effective than an audit committee meeting all the requirements of paragraph (b) of Rule 10A-3 (without relying on any exemption provided by that Rule) at acting independently of management and performing the functions of an audit committee as contemplated therein.

105

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchases.

The following table sets forth information concerning purchases made by us during the fiscal year ended March 31, 2008.

		Shares	Yen	Shares	Shares
		Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum numbers of shares that may yet be purchased under the plans or programs
2007
	April 1 - 30	167	¥ 7,421	-	-
	May 1 - 31	226	7,103	-	-
	June 1 - 30	170	7,090	-	-
	July 1 - 31	596	7,278	-	-
	August 1 - 31	560	7,530	-	-
	September 1- 30	108	7,944	-	-
	October 1 - 31	198	8,263	-	-
	November 1 - 30	104	8,165	-	-
	December 1- 31	174	8,470	-	-
2008
	January 1 - 31	-	-	-	-
	February 1 - 29	40	7,355	-	-
	March 1 - 31	186	6,747	-	-
Total		2,529	¥ 7,501	-	-

All of the purchases shown above represent the purchase of fractional shares from fractional share owners under the Company Law. For an explanation of the rights of such shareholders, see “Japanese Unit Share System— Right of a Holder of Shares Representing Less Than One Unit to Require Us to Purchase Its Shares.” under Item 10.B of this annual report.

On February 1, 2008, share repurchases were approved at the board of directors pursuant to which Nidec may purchase from February 4, 2008 to February 3, 2009 up to the lesser of 1,000,000 shares of common stock or the number of shares equivalent to ¥ 6.0 billion in cost of repurchase. As of March 31, 2008, no shares were repurchased.

PART III

Item 17. Financial Statements.

In lieu of responding to this item, we have responded to Item 18 of this annual report.

Item 18. Financial Statements.

The information required by this item is set forth in our consolidated financial statements included in this annual report.

106

Item 19. Exhibits.

Exhibit Number	Description
1.1	Articles of Incorporation of Nidec Corporation (English translation) (Incorporated by reference to Nidec’s annual report on Form 20-F for the year ended March 31, 2007 filed on July 27, 2007.)
1.2	Share Handling Regulations of Nidec Corporation (English translation) (Incorporated by reference to Nidec’s annual report on Form 20-F for the year ended March 31, 2006 filed on September 25, 2006.)
1.3	Regulations of the Board of Directors of Nidec Corporation (English translation)
1.4	Regulations of the Board of Corporate Auditors of Nidec Corporation (English translation)
2.1	Specimen common stock certificates of Nidec Corporation (English translation) (Incorporated by reference to Nidec’s annual report on Form 20-F for the year ended March 31, 2002 filed on July 5, 2002.)
2.2	Form of Deposit Agreement among Nidec Corporation, Morgan Guaranty Trust Company of New York as Depositary and all owners and holders from time to time of American Depositary Receipts, including the form of American Depositary Receipt (Incorporated by reference to the Registration Statement on Form F-6 (file no. 333-13894) filed on September 7, 2001.)
8.1	Subsidiaries of Nidec Corporation
11.1	Code of Ethics
12.1	Certification of the Chief Executive Officer required by Rule 13a-14(a)
12.2	Certification of the Chief Financial Officer required by Rule 13a-14(a)
13.1	Certification of the Chief Executive Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code
13.2	Certification of the Chief Financial Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code

We have not included as exhibits certain instruments with respect to our long-term debt, the amount of debt authorized under each of which does not exceed 10% of our total assets, and we agree to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.

107

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	NIDEC CORPORATION
	By:    /s/ Shigenobu Nagamori
	Name:	Shigenobu Nagamori
	Title:	President, Chief Executive Officer and  Representative Director
Date:  December 24, 2008

INDEX OF EXHIBITS

Exhibit Number	Description
1.1	Articles of Incorporation of Nidec Corporation (English translation) (Incorporated by reference to Nidec’s annual report on Form 20-F for the year ended March 31, 2007 filed on July 27, 2007.)
1.2	Share Handling Regulations of Nidec Corporation (English translation) (Incorporated by reference to Nidec’s annual report on Form 20-F for the year ended March 31, 2006 filed on September 25, 2006.)
1.3	Regulations of the Board of Directors of Nidec Corporation (English translation)
1.4	Regulations of the Board of Corporate Auditors of Nidec Corporation (English translation)
2.1	Specimen common stock certificates of Nidec Corporation (English translation) (Incorporated by reference to Nidec’s annual report on Form 20-F for the year ended March 31, 2002 filed on July 5, 2002.)
2.2	Form of Deposit Agreement among Nidec Corporation, Morgan Guaranty Trust Company of New York as Depositary and all owners and holders from time to time of American Depositary Receipts, including the form of American Depositary Receipt (Incorporated by reference to the Registration Statement on Form F-6 (file no. 333-13894) filed on September 7, 2001.)
8.1	Subsidiaries of Nidec Corporation
11.1	Code of Ethics
12.1	Certification of the Chief Executive Officer required by Rule 13a-14(a)
12.2	Certification of the Chief Financial Officer required by Rule 13a-14(a)
13.1	Certification of the Chief Executive Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code
13.2	Certification of the Chief Financial Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code

We have not included as exhibits certain instruments with respect to our long-term debt, the amount of debt authorized under each of which does not exceed 10% of our total assets, and we agree to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.

NIDEC CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated balance sheets at March 31, 2007 and 2008		F-4
Consolidated statements of income for the years ended March 31, 2006, 2007 and 2008		F-6
Consolidated statements of shareholders’ equity and comprehensive income for the years ended March 31, 2006, 2007 and 2008		F-7
Consolidated statements of cash flows for the years ended March 31, 2006, 2007 and 2008		F-9
Notes to consolidated financial statements		F-11

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Nihon Densan Kabushiki Kaisha

(“NIDEC Corporation”):

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholders’ equity and comprehensive income, and cash flows present fairly, in all material respects, the financial position of NIDEC Corporation and its subsidiaries at March 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2008 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2008, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits (which were integrated audits in 2008 and 2007). We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

F-2

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company ; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Kyoto Audit Corporation

Kyoto, Japan

June 24, 2008

F-3

NIDEC CORPORATION

CONSOLIDATED BALANCE SHEETS

ASSETS

		Yen in millions				U.S. dollars in thousands
		March 31				March 31,
		2007		2008		2008
Current assets:
	Cash and cash equivalents	¥88,784		¥100,809		$ 1,006,178
	Trade notes and accounts receivable, net of allowance for doubtful accounts of ¥1,270 million in March 31, 2007 and ¥795 million ($7,935 thousand) in March 31, 2008:
	Notes	17,318		17,205		171,724
	Accounts	147,014		148,928		1,486,456
	Inventories	64,308		69,818		696,856
	Other current assets	21,238		20,238		201,996
	Total current assets	338,662		356,998		3,563,210
	Marketable securities and other securities investments	21,805		15,273		152,441
	Investments in and advances to affiliated companies	2,194		2,102		20,980
		23,999		17,375		173,421
	Property, plant and equipment:
	Land	38,289		39,389		393,143
	Buildings	103,325		110,258		1,100,489
	Machinery and equipment	258,970		264,019		2,635,183
	Construction in progress	13,717		11,309		112,876
		414,301		424,975		4,241,691
	Less - Accumulated depreciation	(207,059	)	(226,146	)	(2,257,171	)
		207,242		198,829		1,984,520
	Goodwill	67,780		71,223		710,879
	Other non-current assets, net of allowance for doubtful accounts of ¥893 million in March 31, 2007 and ¥1,451 million ($14,482 thousand) in March 31, 2008	24,940		27,289		272,372
	Total assets	¥ 662,623		¥ 671,714		$ 6,704,402

The accompanying notes are an integral part of these financial statements.

F-4

NIDEC CORPORATION

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

		Yen in millions				U.S. dollars in thousands
		March 31				March 31,
		2007		2008		2008
Current liabilities:
	Short-term borrowings	¥ 78,848		¥ 68,854		$ 687,234
	Current portion of long-term debt	3,216		29,196		291,406
	Trade notes and accounts payable	117,665		121,698		1,214,672
	Other current liabilities	35,640		33,351		332,878
	Total current liabilities	235,369		253,099		2,526,190
Long-term liabilities:
	Long-term debt	31,560		3,430		34,235
	Accrued pension and severance costs	13,013		14,953		149,246
	Other long-term liabilities	11,212		12,462		124,384
	Total long-term liabilities	55,785		30,845		307,865
Minority interest in consolidated subsidiaries		66,453		68,186		680,567
Commitments and contingencies (Note 24)
Shareholders’ equity:
	Common stock authorized 2007 and 2008: 480,000,000 shares ; issued and outstanding: 2007 - 144,780,492 shares/ 2008 - 144,987,492 shares	65,868		66,248		661,224
	Additional paid-in capital	68,469		68,859		687,284
	Retained earnings	160,480		193,407		1,930,402
	Accumulated other comprehensive income :
	Foreign currency translation adjustments	6,874		(10,233	)	(102,136	)
	Unrealized gains from securities	3,324		1,016		10,141
	Pension liability adjustments	263		568		5,669
	Treasury stock, at cost: 2007 - 44,966 shares / 2008 - 47,495 shares	(262	)	(281	)	(2,804	)
	Total shareholders’ equity	305,016		319,584		3,189,780
	Total liabilities and shareholders’ equity	¥ 662,623		¥ 671,714		$ 6,704,402

The accompanying notes are an integral part of these financial statements.

F-5

NIDEC CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Net sales		¥ 536,858		¥ 629,667		¥ 742,126		$ 7,407,186
Operating expenses:
Cost of products sold		413,012		486,627		583,910		5,828,027
Selling, general and administrative expenses		41,188		46,276		51,283		511,857
Research and development expenses		29,232		32,755		30,100		300,429
		483,432		565,658		665,293		6,640,313
Operating income		53,426		64,009		76,833		766,873
Other income (expense):
Interest and dividend income		1,664		2,565		2,930		29,244
Interest expense		(1,362	)	(2,022	)	(2,421	)	(24,164	)
Foreign exchange gain (loss), net		7,866		1,757		(14,110	)	(140,832	)
Gain from marketable securities, net		3,869		943		454		4,531
Other, net		(1,085	)	(1,657	)	(1,003	)	(10,011	)
		10,952		1,586		(14,150	)	(141,232	)
Income before income taxes		64,378		65,595		62,683		625,641
Income taxes		(15,213	)	(17,460	)	(15,484	)	(154,546	)
Income before minority interest and equity in earnings of affiliated companies		49,165		48,135		47,199		471,095
Minority interest in income of consolidated subsidiaries		8,170		8,130		6,082		60,704
Equity in net losses (income) of affiliated companies		46		73		(39	)	(389	)
Net income		¥ 40,949		¥ 39,932		¥ 41,156		$ 410,780
		Yen						U.S. dollars
Per share data:
Net income	－ basic	¥ 285.47		¥ 276.03		¥ 284.00		$ 2.83
	－ diluted	¥ 275.05		¥ 268.25		¥ 276.29		$ 2.76
Cash dividends		¥ 25.00		¥ 40.00		¥ 50.00		$ 0.50

The accompanying notes are an integral part of these financial statements.

F-6

NIDEC CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME

	Yen in millions
	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Treasury stock, at cost	Total
	Shares	Amount
Balance at March 31, 2005	142,504,926	¥61,180	¥63,799		¥88,954		¥(6,745	)	¥(148)	¥207,040
Comprehensive income:
Net income					40,949					40,949
Other comprehensive income (loss):
Foreign currency translation adjustments							9,391			9,391
Unrealized gains from securities, net of reclassification adjustment							1,086			1,086
Minimum pension liability adjustment							(59	)		(59	)
Total comprehensive income										51,367
Dividends paid					(3,569	)				(3,569	)
Conversion of convertible debt	2,032,966	4,242	4,240							8,482
Exercise of stock option	123,400	227	250							477
Issuance cost of new stock			(49	)						(49	)
Purchase of treasury stock									(89)	(89	)
Balance at March 31, 2006	144,661,292	¥65,649	¥68,240		¥126,334		¥3,673		¥(237)	¥263,659
Comprehensive income:
Net income					39,932					39,932
Other comprehensive income (loss):
Foreign currency translation adjustments							6,949			6,949
Unrealized losses on securities, net of reclassification adjustment							(539	)		(539	)
Minimum pension liability adjustment							(25	)		(25	)
Total comprehensive income										46,317
Adjustment to initially apply SFAS No. 158, net of tax							403			403
Total										46,720
Dividends paid					(5,786	)				(5,786	)
Exercise of stock option	119,200	219	234							453
Issuance cost of new stock			(5	)						(5	)
Purchase of treasury stock									(25)	(25	)
Balance at March 31, 2007	144,780,492	¥65,868	¥68,469		¥160,480		¥10,461		¥(262)	¥305,016

F-7

NIDEC CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME

	Yen in millions
	Common stock		Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)		Treasury stock, at cost	Total
	Shares	Amount
Balance at March 31, 2007	144,780,492	¥65,868	¥68,469	¥160,480	¥10,461		¥(262)	¥305,016
Cumulative effect resulting from the adoption of FIN No. 48				(987)				(987	)
Comprehensive income:
Net income				41,156				41,156
Other comprehensive income (loss):
Foreign currency translation adjustments					(17,107	)		(17,107	)
Unrealized losses on securities, net of reclassification adjustment					(2,308	)		(2,308	)
Pension liability adjustments					305			305
Total comprehensive income								22,046
Dividends paid				(7,242)				(7,242	)
Exercise of stock option	207,000	380	390					770
Purchase of treasury stock							(19)	(19	)
Balance at March 31, 2008	144,987,492	¥66,248	¥68,859	¥193,407	¥(8,649	)	¥(281)	¥319,584

	U.S. dollars in thousands
	Common Stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)		Treasury stock, at cost		Total
Balance at March 31, 2007	$657,431	$683,392	$1,601,756	$104,412		$(2,615	)	$3,044,376
Cumulative effect resulting from the adoption of FIN No. 48			(9,851)					(9,851	)
Comprehensive income:
Net income			410,780					410,780
Other comprehensive income (loss):
Foreign currency translation adjustments				(170,746	)			(170,746	)
Unrealized losses on securities, net of reclassification adjustment				(23,036	)			(23,036	)
Pension liability adjustments				3,044				3,044
Total comprehensive income								220,042
Dividends paid			(72,283)					(72,283	)
Exercise of stock option	3,793	3,892						7,685
Purchase of treasury stock						(189	)	(189	)
Balance at March 31, 2008	$661,224	$687,284	$1,930,402	$(86,326	)	$(2,804	)	$3,189,780

The accompanying notes are an integral part of these financial statements.

F-8

NIDEC CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Cash flows from operating activities:
	Net income	¥ 40,949		¥ 39,932		¥ 41,156		$ 410,780
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation	26,285		29,997		36,334		362,651
	Amortization	341		690		1,638		16,349
	Gain from marketable securities, net	(3,869	)	(943	)	(454	)	(4,531	)
	Loss on sales, disposal or impairment of property, plant and equipment	189		1,737		1,636		16,329
	Deferred income taxes	1,586		(995	)	2,065		20,611
	Minority interest in income of consolidated subsidiaries	8,170		8,130		6,082		60,704
	Equity in net losses (income) of affiliated companies	46		73		(39	)	(389	)
	(Gain) loss from derivative instruments, net	(75	)	11		(16	)	(160	)
	Gain from sale of investments in affiliated companies	-		(54	)	-		-
	Foreign currency adjustments	(4,237	)	368		8,305		82,893
	Accrual for pension and severance costs, net payments	(2,924	)	(1,908	)	(1,551	)	(15,481	)
	Changes in operating assets and liabilities:
	(Increase) decrease in notes and accounts receivable	(9,806	)	(10,414	)	26		260
	(Increase) decrease in inventories	(10,256	)	1,805		(5,575	)	(55,644	)
	Increase (decrease) in notes and accounts payable	7,943		(4,223	)	5,949		59,377
	Increase (decrease) in accrued income taxes	601		2,491		(3,601	)	(35,942	)
	Other	989		(1,974	)	2,861		28,555
	Net cash provided by operating activities	¥ 55,932		¥ 64,723		¥ 94,816		$ 946,362

The accompanying notes are an integral part of these financial statements.

F-9

NIDEC CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Cash flows from investing activities:
	Additions to property, plant and equipment	¥ (43,185	)	¥ (39,144	)	¥ (35,660	)	$ (355,924	)
	Proceeds from sales of property, plant and equipment	1,505		1,089		2,010		20,062
	Purchases of marketable securities	(329	)	(4	)	(231	)	(2,306	)
	Proceeds from sales of marketable securities	4,083		1,071		2,761		27,558
	Investments in and advances to affiliated companies	(725	)	-		-		-
	Proceeds from sales of investments in affiliated companies	-		774		-		-
	Acquisitions of consolidated subsidiaries, net of cash acquired	-		(25,322	)	(2,619	)	(26,140	)
	Payments for additional investments in subsidiaries	(5,283	)	(16,588	)	(8,043	)	(80,277	)
	Proceeds from sale of investment in subsidiaries	-		135		-		-
	Other	(41	)	(946	)	(1,942	)	(19,384	)
	Net cash used in investing activities	(43,975	)	(78,935	)	(43,724	)	(436,411	)
Cash flows from financing activities:
	Increase (decrease) in short-term borrowings	13,080		22,649		(15,123	)	(150,943	)
	Proceeds from issuance of long-term debt	100		-		137		1,367
	Repayments of long-term debt	(3,130	)	(6,696	)	(3,966	)	(39,585	)
	Proceeds from issuance of new shares	454		438		761		7,596
	Dividends paid	(3,569	)	(5,786	)	(7,242	)	(72,283	)
	Other	(1,591	)	(1,662	)	(1,847	)	(18,435	)
	Net cash provided by (used in) financing activities	5,344		8,943		(27,280	)	(272,283	)
Effect of exchange rate changes on cash and cash equivalents		4,667		1,974		(11,787	)	(117,646	)
Net increase (decrease) in cash and cash equivalents		21,968		(3,295	)	12,025		120,022
Cash and cash equivalents at beginning of year		70,111		92,079		88,784		886,156
Cash and cash equivalents at end of year		¥ 92,079		¥ 88,784		¥ 100,809		$ 1,006,178

The accompanying notes are an integral part of these financial statements.

F-10

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of operations:

NIDEC Corporation (the “Company”) and its subsidiaries (collectively “NIDEC”) are primarily engaged in the design, development, manufacturing and marketing of i) small precision motors, which include spindle motors for computer hard disk drives, motors for optical disk drives, small precision fans and other small motors; ii) mid-size motors, which are used in automobiles, various electric household appliances and industrial equipment; iii) machinery, which includes, power transmission equipment, semi-conductor manufacturing supplies, test systems, measuring equipment, card readers, industrial robots and factory automation systems; iv) electronic and optical components, which include camera shutters, camera lends units, encoders, switches, trimmer potentiometers, motor driven actuator units, optical pickup units, processing and precision plastic mold products; v) other products, which include auto parts, pivot a ssemblies and other services. Manufacturing operations are located primarily in Asia (China, Thailand, the Philippines and Singapore), and NIDEC has sales subsidiaries primarily in Asia, North America and Europe.

The main customers for spindle motors are manufacturers of hard disk drives. NIDEC also sells its products to the manufacturers of various automation equipment, electric household appliances, home video game consoles, telecommunication and audio-visual equipment, and automotive components.

F-11

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

2. Summary of significant accounting policies:

The Company 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 with accounting principles generally accepted in the United States of America. Significant accounting policies after reflecting adjustments for the above are as follows:

Estimates -

The preparation of NIDEC’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates include allowance for doubtful accounts, depreciation and amortization of long-lived assets, valuation allowance for deferred tax assets, fair value of financial instruments, uncertain tax positions and pension liabilities. Actual results could differ from those estimates.

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the Company and those of its majority-owned subsidiary companies. All significant intercompany transactions and accounts have been eliminated. Companies over which NIDEC exercises significant influence, but which it does not control, are classified as affiliated companies and accounted for using the equity method. Consolidated net income includes NIDEC’s equity in current earnings (losses) of such companies, after elimination of unrealized intercompany profits.

On occasion, a consolidated subsidiary or affiliated company accounted for by the equity method may issue its shares to third parties as either public or private offering or upon conversion of convertible debt to common stock at amounts per share in excess of or less than NIDEC’s average per share carrying value. With respect to such transactions, where the sale of such shares is not part of a broader corporate reorganization and the reacquisition of such shares is not contemplated at the time of issuance, the resulting gains or losses arising from the change in interest are recorded in income for the year when the change in interest transaction occurs. If reacquisition of such shares is contemplated at the time of issuance or realization of such gain is not reasonably assured (i.e., the entity is newly formed, non-operating, a research and development or start-up/development stage entity, or where the entity’s ability t o continue in existence is in question), the transaction is accounted for as a capital transaction.

F-12

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

NIDEC does not hold any interests in variable interest entities, therefore does not provide the disclosures required by FIN No.46R “Consolidation of Variable Interest Entities – an interpretation of ARB No.51”.

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at the year-end exchange rates and all income and expense accounts are translated at exchange rates that approximate those prevailing at the time of the transactions. The resulting translation adjustments are included as a component of accumulated other comprehensive income in shareholders’ equity.

Monetary assets and liabilities denominated in foreign currencies are translated at the year-end exchange rates and the resulting transaction gains or losses are taken into income.

Cash and cash equivalents -

Cash and cash equivalents include all highly liquid investments, with original maturities of three months or less that are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates.

Inventories -

Inventories are stated at the lower of cost or market. Cost is determined principally on the weighted average cost basis. Cost includes the cost of materials, labor and applied factory overhead. Projects in progress, which mainly relate to production of factory automation equipment based on contracts with customers, are stated at the lower of cost or market, cost being determined as the accumulated production cost.

Marketable securities -

Marketable securities consist of equity securities that are listed on recognized stock exchanges and debt securities. Equity securities designated as available-for-sale are carried at fair value with changes in unrealized gains or losses included as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Realized gains and losses are determined on the average cost method and are reflected in the statement of income. Other than temporary declines in market value of individual securities classified as available-for-sale are charged to income in the period the loss occurs. Debt securities designated as held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts.

F-13

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Derivative financial instruments -

NIDEC employs derivative financial instruments, including interest rate swaps, interest rate currency swaps, interest rate caps agreements and foreign exchange forward contracts to manage its exposure to fluctuations in foreign currency exchange rates and interest rates. Derivative contracts are marked to market and changes in value, both increases and decreases, are recognized directly in the consolidated statement of income. There are no derivatives designated as hedges or accounted for as hedges under SFAS No.133, "Accounting for derivative Instruments and Hedging Activities".

Property, plant and equipment -

Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is mainly computed on the declining-balance method to reflect the manner in which the machinery is used due to short product cycles and rapid technology changes by the Company, its Japanese subsidiaries and its Thai manufacturing subsidiary, which mainly produce high-end spindle motors for hard disk drives and are usually the first to commence production of new products, and on the straight-line method for foreign subsidiary companies (except for the Thai subsidiary manufacturing as described above) at rates based on the estimated useful lives of the assets. Estimated useful lives range from 10 to 20 years for most spindle motor factories, from 7 to 47 years for factories to produce other products, 50 years for the head office and sales offices, from 2 to 22 years for leasehold improvement, and from 2 to 15 years for machinery and equipment.

For the Company and its subsidiaries located in Japan, NIDEC changed its calculation method for salvage value of machineries and equipments, from 5% of acquisition costs of the assets to 1 yen on a prospective basis. NIDEC assessed that the assets they currently own are worth less than 5% of the acquisition cost at the point of the disposition. The change of the calculation method did not have any material impact on their operating results for the year ended March 31, 2008.

Depreciation expense amounted to ¥26,285 million, ¥29,997 million, and ¥36,334 million ($362,653 thousand) for the years ended March 31, 2006, 2007, and 2008, respectively.

Lease-

NIDEC applies SFAS No.13 “Accounting for Leases”. Under SFAS No.13, certain lease agreements of property, plant and equipment where NIDEC has substantially all the risks and rewards of ownership are classified as capital leases and related obligations are recorded as liabilities. Capital leases are capitalized at the commencement of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments.

F-14

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Goodwill -

Goodwill represents the excess of purchase price and related costs over the fair value of net assets of acquired businesses. Under SFAS No.142 “Goodwill and Other Intangible Assets”, goodwill acquired in business combinations is not amortized but tested annually for impairment. NIDEC tests for impairment at the reporting unit level on January 1 of each year. In addition, NIDEC tests 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. 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 amoun t 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.

Long-lived assets -

NIDEC reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated as the excess of the assets carrying value over its fair value. Long-lived assets that are to be disposed of other than by sale are considered to be held and used until the disposal. Long-lived assets that are to be disposed of by sale are reported at the lower of their carrying value or fair value less costs to sell. Reductions in carrying value are recognized in the period in which long-lived assets are classified as held for sale.

Revenue recognition -

NIDEC recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assumed. For small precision motors, mid-size 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, NIDEC makes provisions for estimated product returns.

F-15

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Research and development expenses-

Research and development expenses, mainly consisting of personnel and depreciation expenses at research and development branches, are charged to operations as incurred.

Advertising costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥277 million, ¥337 million, and ¥372 million ($3,713 thousand) for the years ended March 31, 2006, 2007 and 2008, respectively.

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

NIDEC recognizes the financial statement effects of tax positions when it is more likely than not, based on the technical merits, that the tax positions will be sustained upon examination by the tax authorities. Benefits from tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Interest and penalties accrued related to unrecognized tax benefits are included in other, net in the consolidated statements of income.

Earnings per share -

Basic net income per common share is calculated by dividing net income by the weighted-average number of shares outstanding during the reported period. The calculation of diluted net income per common share is similar to the calculation of basic net income per share, except that the weighted-average number of shares outstanding includes the additional dilution from potential common stock equivalents such as convertible bonds and options.

Other comprehensive income -

NIDEC’s other comprehensive income is primarily comprised of unrealized gains and losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments to recognize pension liabilities associated with NIDEC’s defined benefit pension plans.

F-16

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Stock-based compensation-

NIDEC elected to apply Accounting Principle Board Opinion (“APB”) No. 25 in accounting for its stock-based compensation plans approved on May 14, 2003. Under APB No.25, no compensation expense was recognized on the grant date, since at that date, the option price equals the market price of the underlying common stock.

In December 2004, the FASB issued SFAS No. 123R (“SFAS 123R”), revised 2004, “Share-Based Payment.” SFAS 123R requires measurement of compensation cost for all share-based payments (including employee stock options) at fair value for interim or annual periods beginning after June 15, 2005. NIDEC adopted SFAS 123R using the modified-prospective transition method beginning April 1, 2006. The adoption of SFAS 123R did not have any material impact on NIDEC’s consolidated financial position, consolidated results of operations, or liquidity.

The modified prospective approach that NIDEC adopts, applies only to new awards and to awards modified, repurchased, or cancelled after the required effective date. Since there were no new awards or modifications, repurchases, and cancellation of existing awards, pro forma information for awards for which NIDEC applied APB 25 is not required.

Reclassification

Certain reclassifications of previously reported amounts have been made to the consolidated statements of income for the years ended March 31, 2006 and 2007 to conform to the current year presentation. Such reclassifications have no effect on income.

F-17

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Accounting Changes

In June 2006, the Financial Accounting Standards Board (the “FASB”) released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”). The Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. NIDEC adopted FIN 48 as of April 1, 2007, as discussed in note No. 19 “Income taxes”.

F-18

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Recent Accounting Pronouncements to be adopted in future periods

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS 157”), “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for fiscal years beginning after November 15, 2007. NIDEC is currently evaluating the potential impact from adopting SFAS 157 on its consolidated financial position, results of operation or liquidity.

In September 2006, the FASB issued SFAS 158. The measurement date provision of SFAS 158 requires that the measurement of plan assets and benefit obligations be as of the date of the employer’s statement of financial position, not up to three months earlier as had been permitted by Statements 87 and 106. This provision of SFAS 158 is effective for fiscal years ending after December 15, 2008. Upon adoption, NIDEC expects that the beginning balance of accrued pension and severance costs would be increased by approximately ¥230 million ($2,296 thousand) and the beginning balance of retained earnings would be reduced by approximately ¥130 million ($1,298 thousand) for the year ending March 31, 2009.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), “The Fair Value Option for Financial Assets and Financial Liabilities— including an amendment of FASB Statement No. 115”. SFAS 159 enables entities to choose  to measure eligible financial assets and financial liabilities at fair value, with changes in value recognized in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. NIDEC is currently evaluating the potential impact from adopting SFAS 159 on its consolidated financial position, results of operation or liquidity.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007) (“SFAS 141R”), “Business Combinations”. SFAS 141R requires that assets acquired, liabilities assumed, contractual contingencies, and contingent consideration be measured at fair value as of the acquisition date, that acquisition-related costs be expensed as incurred, that restructuring costs generally be expensed in periods subsequent to the acquisition date, and the changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period impact income tax expense. SFAS 141R is required to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of fiscal year beginning on or after December 15, 2008. NIDEC is currently evaluating the potential impact from adopting SFAS 141R on its consolidated financi al position, results of operation or liquidity.

F-19

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160 (“SFAS 160”), “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. SFAS 160 recharacterizes minority interests in a subsidiary as non-controlling interests and requires the presentation of noncontrolling interests as equity in the consolidated balance sheets, and separate identification and presentation in the consolidated statement of income of net income attributable to the entity and the noncontrolling interest. SFAS 160 also requires all the transactions for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation be recognized as equity transactions. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. NIDEC is currently evaluating the potential impact from adopting SFAS 160 on its consolidated financia l position, results of operation or liquidity.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161 (“SFAS 161”), “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”. SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. NIDEC is currently evaluating the potential impact from adopting SFAS 161 on its consolidated financial position, results of operation or liquidity.

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162 (“SFAS 162”), “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS 162 is effective 60 days following the SEC’ approval of the Public Company Accounting Oversight Board Auditing amendments. NIDEC is currently evaluating the potential impact from adopting SFAS 162 on its consolidated financial position, results of operation or liquidity.

3. U.S. dollar amounts:

U.S. dollar amounts presented in the consolidated financial statements and the related notes are included solely for the convenience of the reader and are unaudited. These translations should not be construed as representations that the yen amounts actually represent, or have been or could be converted into, U.S. dollars. For this purpose, the rate of ¥100.19 = U.S. $1, the approximate current exchange rate at March 31, 2008, was used for the presentation of the U.S. dollar amounts in the accompanying consolidated financial statements of NIDEC as of and for the year ended March 31, 2008.

F-20

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

4. Acquisitions and dispositions:

NIDEC made no significant business acquisitions or disposal for the year ended March 31, 2006.

On November 8, 2006, NIDEC acquired a 98.9% share in Fujisoku Corporation (“FSKC”). FSKC manufactures and sells industrial switches, memory cards, panel switches and electronic measuring instruments. The purchase consideration for the investment in FSKC was ¥1,031 million and NIDEC acquired 145,956 shares, and goodwill of ¥1,987 million was recognized at the acquisition date. NIDEC believes further synergies with FSKC in R&D activities, manufacturing and sales will significantly enhance NIDEC’s product portfolio and ability to meet increase the customer requirements as well as increasing corporate value of both companies.

On December 27, 2006, NIDEC acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France. As a result, NIDEC has included seven additional companies (“NMA group”) in its scope of consolidation as wholly owned subsidiaries of NIDEC. NMA group manufactures motors and actuators for automobiles such as the air flow system, body closure system, occupant positioning system, brake system, etc. By acquiring NMA group NIDEC expects to enhance its business channel in the automobile industry, assimilate motor engineers and expand overseas business. The purchase consideration for the investment in NMA Group was ¥15,710 million and goodwill of ¥6,772 million was recorded at the acquisition date.

On February 23, 2007, NIDEC acquired a 87.1% share in Brilliant Manufacturing Limited, currently Nidec Brilliant Co., Ltd. (“NBC”). NBC is engaged in manufacturing and sales of base plate die-casting and top cover used in hard disk drives. By acquiring NBC, NIDEC increased its manufacturing capability in Asia and consequently, expects to geographically supplement its synergy among manufacturing subsidiaries of NIDEC. NIDEC also expects to accelerate in-house manufacturing capability and strengthen NIDEC competitiveness to maximize corporate value. The purchase consideration for the investment in NBC was ¥13,532 million, NIDEC acquired 406,031,100 shares and goodwill of ¥8,134 million was recorded at the acquisition date.

F-21

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

On April 27, 2007, NIDEC acquired 18,203,000 shares (or, 51.7%) of the common stock in Japan Servo Co., Ltd. (“JSRV”), which manufactures and sells motors and motor applied products. Since NIDEC already owned 1,466 shares of JSRV’s common stock prior to April 27, 2007, total shares and purchase price for JSRV were 18,204,466 and ¥4,810 million ($48,009 thousand), respectively. NIDEC recognized goodwill amounting to ¥572 million ($5,709 thousand) as a result of this acquisition. During the period between April 27, 2007 and March 31, 2008, NIDEC acquired an additional 3,288,000 shares of JSRV’s common stock, increasing its ownership interest in JSRV to 61.1%. As a result, the number of shares of JSRV common stock held by NIDEC as of March 31, 2008 totaled 21,492,466, representing a ¥6,611 million ($65,985 thousand) purchase price in total, and recognized preliminary goodwill amounted to ¥1,6 10 million ($16,069 thousand). This acquisition is intended to achieve an optimal blend of the technological expertise and production scale that the two companies have developed to date, particularly in the market of small precision motors.

The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based on their respective fair values at the date of the acquisition in accordance with SFAS 141, “Business Combinations”.

The following represents the unaudited pro forma results of operations of NIDEC for the year ended March 31, 2007 and 2008, as if the acquisition in these companies had occurred on April 1, 2006. The unaudited pro forma results of operations are presented for comparative purposes only and are not necessarily indicative of the results of operations that may occur in the future or that would have occurred had the acquisitions been in effect on the dates indicated.

		Yen in millions		U.S. dollars in thousands
		For the year ended March 31 (Unaudited)		For the year ended March 31, 2008
		2007	2008	(Unaudited)
Pro forma net sales		¥ 697,505	¥ 745,006	$ 7,435,932
Pro forma net income		37,260	40,684	406,068
		Yen		U.S. dollars
Pro forma net income per common share
	－basic	¥ 257.56	¥ 280.75	$ 2.80
	－diluted	250.30	273.12	2.73

F-22

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The assets acquired and liabilities assumed on consolidation in 2007 are as follows:

	Yen in millions
	For the year ended March 31, 2007
	NMA		FSKC		NBC		TOTAL
Cash and cash equivalents	¥ 3,681		¥ 346		¥ 924		¥ 4,951
Accounts receivable	6,043		1,681		1,598		9,322
Inventories	1,901		1,348		1,241		4,490
Other current assets	787		551		679		2,017
Property, plant and equipment	8,923		1,324		5,984		16,231
Goodwill	6,772		1,987		8,134		16,893
Other non-current assets	10,688		478		1,400		12,566
Total assets acquired	38,795		7,715		19,960		66,470
Short-term borrowings and current portion of long-term debt	(7,936	)	(2,222	)	(2,599	)	(12,757	)
Accounts payable	(5,303	)	(1,647	)	(650	)	(7,600	)
Other current liabilities	(2,048	)	(391	)	(1,507	)	(3,946	)
Long-term debt	(176	)	(1,951	)	(550	)	(2,677	)
Other non-current liabilities	(7,622	)	(473	)	(150	)	(8,245	)
Total liabilities assumed	(23,085	)	(6,684	)	(5,456	)	(35,225	)
Minority interest	-		(0	)	(972	)	(972	)
Purchase price	15,710		1,031		13,532		30,273
Cash acquired	(3,681	)	(346	)	(924	)	(4,951	)
Net cash paid (acquired)	¥ 12,029		¥ 685		¥ 12,608		¥ 25,322

F-23

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

For the year ended March 31, 2008 NIDEC adjusted goodwill and the fair value of the assets acquired and liabilities assumed to reflect the final purchase price allocations in respect of both NMA Group and NBC. The following table shows the adjustments to amounts recognized in the preliminary purchase allocations represented in the former table.

	Yen in millions
	For the year ended March 31, 2007
	NMA		NBC		TOTAL
Inventories	-		¥ 176		¥ 176
Property, plant and equipment	1,265		585		1,850
Goodwill	(995	)	(652	)	(1,647	)
Other non-current assets	(213	)	9		(204	)
Total assets acquired	57		118		175
Other non-current liabilities	(57	)	(118	)	(175	)
Total liabilities assumed	¥ (57	)	¥ (118	)	¥ (175	)

F-24

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The assets and liabilities assumed on consolidation in 2008 are as follows;

	Yen in millions		U.S. dollars in thousands
	For the year ended March 31, 2008		For the year ended March 31, 2008
	JSRV
Cash and cash equivalents	¥ 2,191		$ 21,869
Accounts receivable	9,018		90,009
Inventories	4,189		41,811
Other current assets	1,201		11,987
Property, plant and equipment	6,752		67,392
Goodwill	572		5,709
Other non-current assets	1,900		18,963
Total assets acquired	25,823		257,740
Short-term borrowings and current portion of long-term debt	(6,126	)	(61,144	)
Accounts payable	(5,499	)	(54,886	)
Other current liabilities	(1,998	)	(19,941	)
Long-term debt	(619	)	(6,178	)
Other non-current liabilities	(3,019	)	(30,133	)
Total liabilities assumed	(17,261	)	(172,282	)
Minority interest	(3,752	)	(37,449	)
Purchase price	4,810		48,009
Cash acquired	(2,191	)	(21,869	)
Net cash paid (acquired)	¥ 2,619		$ 26,140

For purpose of segment disclosure, the goodwill was assigned to each operating segments as follows.

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
NCJ	¥ 14,906	¥ 572	$ 5,709
NCEL	1,987	-	-
	¥ 16,893	¥ 572	$ 5,709

F-25

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

A summary of the major identified capitalized intangible assets and related amortization is as follows.

	Years	Yen in millions
	weighted average amortization period	March 31, 2007
		Gross carrying amounts	Accumulated amortization
Proprietary technology	10	¥ 2,364	¥ 59
Customer relationships	12	7,277	152
Other	2 to 10	360	34
Total		¥ 10,001	¥ 245

No material intangible asset has been identified to be disclosed with regard to the business acquisitions of FSKC and NBC in 2007.

	Years	Yen in millions		U.S dollars in thousands
	weighted average amortization period	March 31, 2008		March 31, 2008
		Gross carrying amounts	Accumulated amortization	Gross carrying amounts	Accumulated amortization
Patent rights	8	¥ 86	¥ 15	$ 858	$ 150
Proprietary technology	20	50	2	499	20
Customer relationships	1	6	6	60	60
Other	6	4	1	40	10
Total		¥ 146	¥ 24	$ 1,457	$ 240

There was no material pre-existing contractual relationship under the Emerging Issues Task Force 04-1 “Accounting for Preexisting Relationships between the Parties to a Business Combination”, in relation to these business acquisitions.

F-26

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

5. Goodwill and other intangible assets

Intangible assets subject to amortization are summarized as follows:

	Yen in millions				U.S dollars in thousands
	March 31				March 31,
	2007		2008		2008
	Gross carrying amounts	Accumulated amortization	Gross carrying amounts	Accumulated amortization	Gross carrying amounts	Accumulated amortization
Patent rights	¥ 458	¥ 99	¥ 564	¥ 180	$ 5,629	$ 1,797
Proprietary technology	2,364	59	2,422	298	24,174	2,974
Customer relationships	7,277	152	7,095	799	70,816	7,975
Software	3,928	1,666	5,408	2,084	53,977	20,800
Other	1,231	228	1,541	537	15,381	5,360
Total	¥ 15,258	¥ 2,204	¥ 17,030	¥ 3,898	$ 169,977	$ 38,906

The weighted average amortization period for patent rights, proprietary technology, customer relationships and software are 9 years, 10 years, 12 years and 5 years, respectively.

Total amortization of intangible assets for the years ended March 31, 2006, 2007 and 2008 amounted to ¥192 million, ¥542 million and ¥1,540 million ($15,371 thousand), respectively.

Total indefinite live intangible assets amounted to ¥142 million and ¥142 million ($1,417 thousand) for the years ended March 31, 2007 and 2008, respectively.

The estimated aggregate amortization expense for intangible assets for the next five years is as follows:

Years ending March 31,	Yen in Millions	U.S. dollars in thousands
2009	¥ 1,934	$ 19,303
2010	1,713	17,098
2011	1,541	15,381
2012	1,394	13,914
2013	¥ 1,269	$ 12,666

Goodwill represents the excess of purchase price and related costs over the fair value of net assets of acquired businesses. On April 1, 2002, NIDEC adopted SFAS No. 142 “Goodwill and Other Intangible Assets”. Under SFAS No. 142, goodwill acquired in business combinations is not amortized but tested annually for impairment. If, between annual tests, an event, which would reduce the fair value below its carrying amount, occurs, NIDEC would recognize an impairment.

F-27

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

NIDEC has completed the annual impairment test for existing goodwill as required by SFAS No. 142. For the years ended March 31, 2006, 2007 and 2008, NIDEC has determined that the fair value of each reporting unit which includes goodwill has been in excess of its carrying amount. Accordingly, for the years ended March 31, 2006, 2007 and 2008, no goodwill impairment loss has been recorded.

The carrying amounts of goodwill by operating segment as of March 31, 2007 and 2008 are as follows. Operating segment information is described at note No.25 (2).

	Yen in Millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
NCJ	¥ 65,099	¥ 68,531	$ 684,010
NCPL	312	312	3,114
NSCJ	81	81	808
NTSC	156	156	1,557
NCEL	2,065	2,076	20,721
NSNK	67	67	669
	¥ 67,780	¥ 71,223	$ 710,879

The changes in the carrying amount of goodwill for the year ended March 31, 2007 and 2008 are as follows:

	Yen in Millions				U.S. dollars in thousands
	2007		2008		2008
Balance as of April 1	¥ 44,266		¥ 67,780		$ 676,515
Acquisition	16,893		572		5,709
Acquisition of minority interests	9,480		4,518		45,094
Purchase price allocation adjustments	(2,859	)	(1,647	)	(16,439	)
Balance as of March 31	¥ 67,780		¥ 71,223		$ 710,879

F-28

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

6. Supplemental cash flow information:

Cash payments for income taxes were ¥13,026 million, ¥15,965 million and ¥17,019 million ($169,867 thousand) for the years ended March 31, 2006, 2007 and 2008, respectively. Interest payments during the years ended March 31, 2006, 2007 and 2008 were ¥1,348 million, ¥1,907 million and ¥2,501 million ($24,963 thousand), respectively.

Tax benefits related to a stock-based compensation plan of ¥23 million, ¥16 million and ¥9 million ($90 thousand) were classified as operating cash flows for the years ended March 31, 2006, 2007 and 2008, respectively.

Because of the merger of Mitsubishi Tokyo Financial Group, Inc. and UFJ Holdings, Inc., on October 1, 2005, NIDEC’s shares of UFJ Holdings, Inc. were exchanged for the shares of the new company, Mitsubishi UFJ Financial Group. As a result of this share exchange, NIDEC recognized a gain of ¥1,123 million for the year ended March 31, 2006, which is included in ¥3,869 million of “Gain from marketable securities, net”.  Because of the share exchange of Sumitomo Mitsui Financial Group, Inc. and SMBC Friend Securities Co., LTD., on September 1, 2006, NIDEC’s shares of SMBC Friend Securities Co., LTD. were exchanged for the shares of the company, Sumitomo Mitsui Financial Group. As a result of this share exchange, NIDEC recognized a gain of ¥45 million for the year ended March 31, 2007, which is included in the ¥943 million of “Gain from marketable securities, net”.  Because of the share exchange of Mitsubishi UFJ Financial Group, Inc. and Mitsubishi UFJ Securities Co., LTD., on September 30, 2007, NIDEC’s shares of Mitsubishi UFJ Securities Co., LTD., were exchanged for the shares of the company, Mitsubishi UFJ Financial Group. As a result of this share exchange, NIDEC recognized a gain of ¥1 million ($10 thousand) for the year ended March 31, 2008, which is included in the ¥454 million ($4,531 thousand) of “Gain from marketable securities, net”.

Capital lease obligations of ¥1,995 million, ¥1,281 million and ¥1,075 million ($10,730 thousand) were incurred for the years ended March 31, 2006, 2007 and 2008, respectively.

Conversion of convertible debt into common stock was ¥8,482 million for the year ended March 31, 2006.  There was no impact for the years ended March 31, 2007 and 2008, respectively.

F-29

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

7. Allowance for doubtful accounts:

NIDEC estimates losses for uncollectible accounts based on historical experience and the evaluation of the likelihood of success in collecting specific customer receivables.

An analysis of activity within the allowance for doubtful accounts for the years ended March 31, 2006, 2007 and 2008 is as follows:

	Yen in millions						U.S. dollars in thousands
	March 31						March 31,
	2006		2007		2008		2008
Allowance for doubtful accounts at beginning of year	¥ 1,071		¥ 2,184		¥ 2,163		$ 21,589
Provision for doubtful accounts, net of reversal	1,164		117		312		3,114
Write-offs	(79	)	(375	)	(149	)	(1,487	)
Acquisition and other	(1	)	229		95		948
Translation adjustment and other	29		8		(175	)	(1,747	)
Allowance for doubtful accounts at end of year	¥ 2,184		¥ 2,163		¥ 2,246		$ 22,417

8. Inventories:

Inventories consist of the following:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Finished goods	¥ 26,960	¥ 32,735	$ 326,729
Raw materials	17,324	17,849	178,152
Work in process	16,405	16,164	161,333
Project in progress	1,212	816	8,145
Supplies and other	2,407	2,254	22,497
	¥ 64,308	¥ 69,818	$ 696,856

F-30

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

9. Other current assets:

Other current assets as of March 31, 2007 and 2008 consist of the following:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Deferred tax assets (Note 19)	¥ 6,454	¥ 6,896	$ 68,829
Other receivable	6,501	4,271	42,629
Time deposit	3,541	3,851	38,437
Other	4,742	5,220	52,101
	¥ 21,238	¥ 20,238	$ 201,996

“Other” primarily consists of accrued tax and prepaid expenses.

F-31

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

10. Marketable securities and other securities investments:

Marketable securities and other securities investments include debt and equity securities of which the aggregate fair value, gross unrealized gains and losses and cost are as follows:

	Yen in millions
	March 31, 2007
	Cost	Gross unrealized gains	Gross unrealized losses	Fair value
Available-for-sale
Equity securities	¥ 7,361	¥ 12,794	¥ 37	¥ 20,118
Securities not practicable to fair value
Equity securities	¥ 1,687

	Yen in millions
	March 31, 2008
	Cost	Gross unrealized gains	Gross unrealized losses	Fair value
Available-for-sale
Equity securities	¥ 6,239	¥ 7,663	¥ 291	¥ 13,611
Held-to-maturity
Japanese governmental debt securities	100	-	-	100
	¥ 6,339	¥ 7,663	¥ 291	¥ 13,711
Securities not practicable to fair value
Equity securities	¥ 1,562

	U.S. dollars in thousands
	March 31, 2008
	Cost	Gross unrealized gains	Gross unrealized losses	Fair value
Available-for-sale
Equity securities	$62,272	$ 76,485	$ 2,904	$ 135,853
Held-to-maturity
Japanese governmental debt securities	998	-	-	998
	$ 63,270	$ 76,485	$ 2,904	$ 136,851
Securities not practicable to fair value
Equity securities	$ 15,590

F-32

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

During the years ended March 31, 2006, 2007 and 2008, the net unrealized gain on available-for-sale securities included as a component of accumulated other comprehensive income, net of applicable taxes, increased by ¥1,086 million and decreased by ¥539 million and ¥2,308 million ($23,036 thousand), respectively.

Proceeds from sales of available-for-sale securities were ¥4,083 million, ¥1,611 million and ¥2,221 million ($22,168 thousand) for the years ended March 31, 2006, 2007 and 2008, respectively. On those sales, gross realized gains were ¥3,756 million, ¥1,118 million and ¥805 million ($8,035 thousand) and gross realized losses were ¥50 million, ¥0 million and ¥7 million ($70 thousand), respectively.

Based on the business combination of Sumitomo Mitsui Financial Group, Inc. and SMBC Friend Securities Co., Ltd. as of September 1, 2006, NIDEC recorded a gain, amounting to ¥45 million ($449 thousand) from the exchange of NIDEC’s shares in SMBC Friend Securities to those of the new company, Sumitomo Mitsui Financial Group in accordance with EITF 91-5, Nonmonetary Exchange of Cost-Method Investments.

Based on the business combination of Mitsubishi UFJ Financial Group, Inc. and Mitsubishi UFJ Securities Co., Ltd. as of September 30, 2007, NIDEC recorded a gain, amounting to ¥1 million ($10 thousand) from the exchange of NIDEC’s shares in Mitsubishi UFJ Securities to those of the new company, Mitsubishi UFJ Financial Group in accordance with EITF 91-5.

NIDEC holds long-term investment securities that are classified as “marketable securities and other securities investments.” The securities issued by various non-public companies are recorded at cost, as their fair values are not readily determinable. NIDEC’s management employs a systematic methodology to assess the recoverability of such investments by reviewing the financial position of the underlying companies and the prevailing market conditions in which these companies operate to determine if NIDEC’s investment in each individual company is impaired and whether the impairment is other-than-temporary. If any impairment is determined to be other-than-temporary, the cost of the investment is written-down by the impaired amount and the amount is recognized currently as a realized loss.

F-33

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The following table presents the gross unrealized losses on, and fair value of, NIDEC’s investment securities, aggregated by investment category and length of time that individual investment securities have been in a continuous unrealized loss position, at March 31, 2008.

	Yen in millions		Yen in millions
	Less than 12 months		12 months or more
	Fair value	Unrealized loss	Fair value	Unrealized loss
Equity securities	¥ 1,358	¥ 265	¥ 60	¥ 26

	U.S. dollars in thousands		U.S. dollars in thousands
	Less than 12 months		12 months or more
	Fair value	Unrealized loss	Fair value	Unrealized loss
Equity securities	$ 13,554	$ 2,645	$ 599	$ 260

NIDEC presumes a decline in value of investment securities is other-than-temporary if the fair value is 20% or more below the original cost for an extended period of time. The presumption of an other-than-temporary impairment may be overcome if there is evidence to support that the decline is temporary in nature due to the existence of other factors which overcome the duration or magnitude of the decline. On the other hand, there may be cases where impairment losses are recognized when specific factors indicate the decline in the fair value is other-than-temporary. As of March 31, 2008, NIDEC determined that the decline in value for investment securities with unrealized losses shown in the above table is temporary in nature.

F-34

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

11. Investments in and transactions with affiliated companies:

Summarized financial information for affiliated companies accounted for using the equity method, which is presented based on accounting principles generally accepted in the United States of America, is shown below:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Current assets	¥ 5,368	¥ 6,573	$ 65,606
Non-current assets	8,250	7,424	74,099
Total assets	¥ 13,618	¥ 13,997	$ 139,705
Current liabilities	¥ 8,445	¥ 8,889	$ 88,721
Long-term liabilities	217	25	250
Shareholders’ equity	4,956	5,083	50,734
Total liabilities and shareholders’ equity	¥ 13,618	¥ 13,997	$ 139,705
NIDEC’s share of shareholders’ equity	¥ 1,915	¥ 1,932	$ 19,283
NIDEC’s investment in equity-method affiliates	¥ 2,035	¥ 1,946	$ 19,423
Loan receivable from affiliated companies	¥ 159	¥ 156	$ 1,557
Number of affiliated companies at end of period	4	5

	Yen in millions						U.S. dollars in thousands
	For the year ended March 31						For the year ended March 31,
	2006		2007		2008		2008
Net revenues	¥ 9,504		¥ 11,693		¥ 16,848		$ 168,160
Gross profit	¥ 972		¥ 957		¥ 1,532		$ 15,291
Net income	¥ 182		¥ 31		¥ 171		$ 1,707
NIDEC’s share of net income (loss)	¥ 35		¥ (16	)	¥ 45		$ 449
Adjustments	(81	)	(57	)	(6	)	(60	)
Equity (loss) income	¥ (46	)	¥ (73	)	¥ 39		$ 389

F-35

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

As of March 31, 2006, entities comprising a significant portion of NIDEC’s investment in affiliated companies include NTN-Nidec (Zhejiang) Corporation (“NNSC”) (40.00%), NTN-Nidec (Thailand) Co., Ltd. (“NNTC”) (40.00%), Nidec Development Philippines Corporation (“NDF”) (39.99%), Copal Yamada Corporation (“CYC”) (28.59%) and Seijin-Sankyo Control Devices Co., Ltd. (“SCD”) (22.28%).

As of March 31, 2007, entities comprising a significant portion of NIDEC’s investment in affiliated companies include NNSC (40.00%), NNTC (40.00%), NDF (39.99%) and CYC (28.59%).

Our investment in an affiliated company, SCD, accounted for using the equity method, had a carrying value of ¥338 million as of March 31, 2006. Its quoted value was ¥1,243 million. NIDEC’s interest in SCD was sold during the year ended March 31, 2007.

As of March 31, 2008, entities comprising a significant portion of NIDEC’s investment in affiliated companies include NNSC (40.00 %), NNTC (40.00 %), NDF(39.99%), CYC (28.63%) and, Copal Yamada (Vietnam) Co., Ltd. (“CYVC”) (28.63%).

Account balances and transactions with affiliated companies are presented below:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Trade notes and accounts receivable	¥ 597	¥ 299	$ 2,984
Trade notes and accounts payable	¥ 1,416	¥ 3,006	$ 30,003

	Yen in millions			U.S. dollars in thousands
	For the year ended March 31			For the year ended March 31,
	2006	2007	2008	2008
Sales of products	¥ 757	¥ 1,739	¥ 552	$ 5,510
Purchases of goods	¥ 4,503	¥ 9,822	¥ 13,482	$ 134,564

For the year ended March 31, 2006, sales of products to affiliated companies increased mainly due to an increase of sales to NNSC. Purchases of goods from affiliated companies for the year ended March 31, 2006 increased compared to the year ended March 31, 2005, mainly due to an increase in the transactions with NNSC.

F-36

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

For the year ended March 31, 2007, sales of products to affiliated companies increased mainly due to the increase of sales to NNTC. Purchases of goods from affiliated companies for the year ended March 31, 2007 increased compared to the year ended March 31, 2006, mainly due to an increase in the transactions with NNSC and NNTC.

For the year ended March 31, 2008, sales of products to affiliated companies decreased mainly due to the decrease of sales to NNTC. Purchases of goods from affiliated companies for the year ended March 31, 2008 increased compared to the year ended March 31, 2007, mainly due to an increase in the transactions with NNTC.

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, 2006, 2007 and 2008 were ¥35 million, ¥40 million and ¥1 million ($10 thousand), respectively.

12. Other non-current assets:

Other non-current assets as of March 31, 2007 and 2008 consist of the following:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Intangible assets *1	¥ 13,054	¥ 13,132	$ 131,071
Deferred tax assets	8,684	11,098	110,769
Other *2	3,202	3,059	30,532
	¥ 24,940	¥ 27,289	$ 272,372

Notes:

*1. “Intangible assets” information is described at note No. 5 “Goodwill and other intangible assets”.

*2. “Other” primarily consists of other investments.

F-37

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

13. Short-term borrowings and long-term debt:

Short-term borrowings at March 31, 2007 and 2008 consist of the following:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Loans, principally from banks with average interest at March 31, 2007 of 3.13% and at March 31, 2008 of 1.53% per annum, respectively	¥ 78,848	¥ 68,854	$ 687,234

At March 31, 2008, NIDEC had unused lines of credit amounting to ¥92,890 million ($927,138 thousand) with banks. Under these programs, NIDEC is authorized to obtain short-term financing at prevailing interest rates.

Long-term debt at March 31, 2007 and 2008 is comprised of the following:

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Secured loans, representing obligations principally to banks Due 2008 in 2007 with interest ranging 2.07% per annum in 2007 Due 2008 in 2008 with interest ranging 2.07% per annum in 2008	¥ 42		¥ 8		$ 80
Unsecured loans, representing principally to banks Due 2007 to 2026 in 2007 with interest ranging from 0.00% to 6.40% per annum in 2007 Due 2008 to 2026 in 2008 with interest ranging from 0.00% to 6.40% per annum in 2008	1,630		302		3,014
Zero coupon 0.0% convertible bonds, due 2008 2007: Convertible currently at ¥6,914 ($69) for one common share, redeemable before due date (see notes below) 2008: Convertible currently at ¥6,914 ($69) for one common share, redeemable before due date (see notes below)	27,251		27,089		270,376
Long-term capital lease obligations Due 2007 to 2015 in 2007, with interest from 1.25% to 5.85% per annum in 2007 Due 2008 to 2015 in 2008, with interest from 0.19% to 7.03% per annum in 2008	5,853		5,227		52,171
	34,776		32,626		325,641
Less - Current portion due within one year	(3,216	)	(29,196	)	(291,406	)
	¥ 31,560		¥ 3,430		$ 34,235

F-38

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Notes:

1. Detail of Zero coupon 0.0% convertible bonds, due October 2008 is as follows:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Principal amount	¥ 27,000	¥ 27,000	$ 269,488
Unamortized premium	251	89	888
Total	¥ 27,251	¥ 27,089	$ 270,376

2. The yen denominated zero coupon convertible bonds with stock acquisition rights, which are listed on London Stock Exchange, were issued on October 17, 2003, and are redeemable at 100% of face value on October 17, 2008 (maturity date). The initial face value of the bonds was ¥30,000 million and the issue price was 103.00% of the face value. The face value of remaining bonds is ¥27,000 million as of March 31, 2008

3. Based on our evaluation, the conversion feature was not required to be bifurcated under Statement of Financial Accounting Standards No. 133 (“SFAS 133”), “Accounting for Derivative Instruments and Hedging Activities.” In addition there was no beneficial conversion feature that required bifurcation under the Emerging Issues Task Force 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” (“EITF98-5”).

The aggregate amounts of annual maturity of long-term debt during the next five years are as follows:

Year ending March 31	Yen in millions	U.S. dollars in thousands
2009	¥ 29,196	$ 291,406
2010	1,871	18,675
2011	769	7,675
2012	425	4,242
2013	194	1,936
2014 and thereafter	¥ 171	$ 1,707

At March 31, 2008, lands and buildings with carrying value of ¥330 million ($3,294 thousand), and ¥260 million ($2,595 thousand), respectively, were pledged as collateral for banks borrowings.

Standard agreements with certain banks in Japan include provisions that collateral (including sums on deposit with such banks) or guarantors will be furnished upon the banks’ request and that any collateral furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness to such banks.

F-39

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

14. Other current liabilities:

Other current liabilities as of March 31, 2007 and 2008 consist of the following:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Accrued expenses	¥ 16,802	¥ 17,533	$ 174,998
Income taxes payable	9,668	5,942	59,307
Payable for property, plant and equipment	4,139	3,305	32,987
Other	5,031	6,571	65,586
	¥ 35,640	¥ 33,351	$ 332,878

“Other” primarily consists of deposits received.

F-40

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

15. Pension and severance plans:

The Company and certain subsidiaries sponsor pension and retirement plans, which entitle employees, under most circumstances, to lump-sum indemnities or pension payments based on current rates of pay and length of service. Under normal circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive additional benefits upon involuntary retirement, including retirement at the mandatory retirement age.

For the years ended March 31, 2007 and 2008, NIDEC assumed pension liabilities as a result of business acquisitions of ¥4,587 million and ¥2,487 million ($24,823 thousand), respectively. Under these pension plans, pension payments mainly based on current rates of pay and length of service or the number of “points” mainly determined by those and foreign companies’ plans have not been funded.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158 (“SFAS 158”), “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. NIDEC adopted SFAS 158 effective March 31, 2007. The impact of the adoption of SFAS 158 had been reflected within NIDEC’s consolidated financial statements as of March 31, 2007. The incremental effect of applying SFAS 158 was as follows:

	Yen in millions
	March 31, 2007
	Before Application of SFAS 158		Adjustments		After Application of SFAS 158
Other non-current assets	¥ 25,236		¥ (296	)	¥ 24,940
Total assets	¥ 662,919		¥ (296	)	¥ 662,623
Total current liabilities	¥ 235,369		-		¥ 235,369
Accrued pension and severance costs	13,735		(722	)	13,013
Total long-term liabilities	56,507		(722	)	55,785
Minority interest in consolidated subsidiaries	66,430		23		66,453
Accumulated other comprehensive loss:
Minimum pension liability adjustment	(140	)	140		-
Pension liability adjustments	-		263		263
Total shareholders’ equity	304,613		403		305,016
Total liabilities and shareholders’ equity	¥ 662,919		¥ (296	)	¥ 662,623

F-41

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Information regarding NIDEC’s employees’ defined benefit plans is as follows:

Japanese plans:

NIDEC primarily uses a December 31 measurement date for Japanese plans.

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Change in benefit obligation:
Benefit obligation at beginning of year	¥ 14,379		¥ 15,359		$ 153,299
Service cost	667		1,100		10,979
Interest cost	325		331		3,304
Actuarial loss	410		680		6,787
Acquisition and other	652		3,817		38,098
Benefits paid	(1,074	)	(1,813	)	(18,096	)
	15,359		19,474		194,371
Change in plan assets:
Fair value of plan assets at beginning of year	5,962		7,053		70,396
Actual return on plan assets	437		(162	)	(1,617	)
Employer contribution	760		967		9,652
Acquisition and other	294		1,330		13,275
Benefits paid	(400	)	(712	)	(7,106	)
Fair value of plan assets at end of year	7,053		8,476		84,600
Funded status	¥ 8,306		¥ 10,998		$ 109,771

Amounts included in the consolidated balance sheet are comprised of:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Accrued pension and severance costs	¥ 8,306	¥ 10,998	$ 109,771
Net amounts recognized	¥ 8,306	¥ 10,998	$ 109,771

F-42

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Amounts included in accumulated other comprehensive income (loss) as pension liability adjustments are comprised of:

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Actuarial loss	¥ (146	)	¥ (1,304	)	$ (13,015	)
Prior service cost	504		441		4,401
Pension liability adjustments, pre-tax	¥ 358		¥ (863	)	$ (8,614	)

The accumulated benefit obligations for all defined benefit pension plans were ¥14,324 million and ¥18,052 million ($180,178 thousand) for the years ended March 31, 2007 and 2008, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Projected benefit obligations	¥ 15,326	¥ 19,434	$ 193,971
Accumulated benefit obligations	14,291	18,014	179,798
Fair value of plan assets	7,021	8,437	84,210

Weighted-average assumptions used to determine benefit obligations as of March 31, 2007 and 2008 are as follows:

	March 31
	2007	2008
Discount rate	1.3-2.7%	1.3-2.8%
Rate of compensation increase	1.0-3.5%	1.0-3.2%

Weighted-average assumptions used to determine net pension and severance costs for the years ended March 31, 2006, 2007 and 2008 are as follows:

	For the year ended
	March 31
	2006	2007	2008
Discount rate	1.0-2.5%	1.5-3.1%	1.3-2.7%
Expected return on plan assets	0.8-3.0%	0.8-3.0%	0.8-3.0%
Rate of compensation increase	0.0-3.5%	0.0-3.5%	1.0-3.5%

F-43

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

	Yen in millions						U.S. dollars in thousands
	For the year ended March 31						For the year ended March 31,
	2006		2007		2008		2008
Components of net periodic (benefit) cost:
Service cost	¥ 609		¥ 667		¥ 1,100		$ 10,979
Interest cost	295		325		331		3,304
Expected return on plan assets	(101	)	(155	)	(201	)	(2,006	)
Amortization of net actuarial loss (gain)	3		(38	)	(5	)	(50	)
Amortization of prior service credit	(62	)	(62	)	(62	)	(619	)
Gains from settlements	(30	)	-		-		-
Net periodic pension cost	¥ 714		¥ 737		¥ 1,163		$ 11,608

Prior service cost and actuarial gain and loss are amortized using the straight-line method over the average remaining service period of active employees. The estimated prior service credit and net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into benefits cost for the year ending March 31, 2009 are ¥62 million ($619 thousand) and ¥33 million ($329 thousand), respectively.

F-44

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Foreign plans:

NIDEC primarily uses a March 31 measurement date for foreign plans.

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Change in benefit obligation:
Benefit obligation at beginning of year	¥ 377		¥ 4,784		$ 47,749
Service cost	172		191		1,906
Interest cost	57		221		2,206
Actuarial loss (gain)	5		(914	)	(9,123	)
Acquisition and other	4,229		-		-
Foreign currency exchange rate changes	9		(54	)	(539	)
Benefits paid	(65	)	(190	)	(1,896	)
	4,784		4,038		40,303
Change in plan assets:
Fair value of plan assets at beginning of year	57		77		768
Actual return on plan assets	8		(14	)	(140	)
Employer contribution	32		28		279
Foreign currency exchange rate changes	(5	)	20		200
Benefits paid	(15	)	(28	)	((279	)
Fair value of plan assets at end of year	77		83		828
Funded status	¥ 4,707		¥ 3,955		$ 39,475

Amounts included in the consolidated balance sheet are comprised of:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Accrued pension and severance costs	¥ 4,707	¥ 3,955	$ 39,475
Net amounts recognized	¥ 4,707	¥ 3,955	$ 39,475

Amounts included in accumulated other comprehensive income (loss) as pension liability adjustments are comprised of:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Actuarial gain	¥ 0	¥ 914	$ 9,123
Pension liability adjustments, pre-tax	¥ 0	¥ 914	$ 9,123

F-45

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The accumulated benefit obligations for all defined benefit pension plans were ¥4,529 million and ¥3,883 million ($38,756 thousand) for the years ended March 31, 2007 and 2008, respectively.

The projected benefit obligations, accumulated benefit obligations and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Projected benefit obligations	¥ 4,784	¥ 4,038	$ 40,303
Accumulated benefit obligations	4,529	3,883	38,756
Fair value of plan assets	77	83	828

Weighted-average assumptions used to determine benefit obligations as of March 31, 2007 and 2008 are as follows:

	March 31
	2007	2008
Discount rate	4.3%	5.9%
Rate of compensation increase	2.5%	2.5%

Weighted-average assumptions used to determine net pension and severance costs for the years ended March 31, 2007 and 2008 are as follows:

	For the year ended March 31
	2007	2008
Discount rate	4.3%	4.3%
Rate of compensation increase	2.5%	2.5%

The assumptions used before March 31, 2006 and expected return on plan assets have no material impact for NIDEC’s consolidated financial statement.

F-46

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

	Yen in millions					U.S. dollars in thousands
	For the year ended March 31					For the year ended March 31,
	2006		2007		2008	2008
Components of net periodic (benefit) cost:
Service cost	¥ 115		¥ 172		¥ 191	$ 1,906
Interest cost	26		57		221	2,206
Expected return on plan assets	(3	)	(9	)	13	130
Net periodic pension cost	¥ 138		¥ 220		¥ 425	$ 4,242

Prior service cost and actuarial gain and loss are amortized using the straight-line method over the average remaining service period of active employees. The estimated net actuarial gain for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into benefits cost for the year ending March 31, 2009 is ¥46 million ($459 thousand).

Japanese plans and foreign plans:

The weighted-average asset allocations of NIDEC’s pension plans are as follows:

Assets Category	Asset allocation of pension plans
	Actual (%)		Target (%)
	March 31, 2007	March 31, 2008	March 31, 2009
Equity securities	37	39	36
Debt securities	23	22	22
Life insurance company general accounts	26	26	30
Others	14	13	12
Total	100	100	100

NIDEC’s policy and objective for plan asset management is to generate a stable return on the investment over the long term, which enable NIDEC’s pension funds to meet future benefit payment requirements under risks which NIDEC considers permissible. NIDEC formulates “basic” portfolio that suits the above-mentioned policy, and ensure that plan assets are allocated under this “basic” portfolio. NIDEC evaluates its actual return and revises the “basic” portfolio, if necessary.

NIDEC expects to contribute approximately ¥936 million ($9,342 thousand) to its defined benefit plans for the year ending March 31, 2009.

F-47

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The future benefit payments for defined benefit plans are expected as follows:

	Yen in millions		U.S. dollars in thousands
	Japanese plans	Foreign plans	Japanese plans	Foreign plans
2009	¥ 1,495	¥ 158	$ 14,922	$ 1,577
2010	1,520	160	15,171	1,597
2011	1,679	175	16,758	1,747
2012	1,239	188	12,367	1,876
2013	1,229	206	12,267	2,056
Years 2014-2017	¥ 5,031	¥ 1,282	$ 50,215	$ 12,796

Certain subsidiaries have a number of multiemployer plans. Total amounts of cost recognized for certain subsidiaries’ contributions to the plans were ¥216 million, ¥218 million and ¥183 million ($1,827 thousand) for the years ended March 31, 2006, 2007 and 2008, respectively. NIDEC expects to contribute approximately ¥171 million ($1,707 thousand) for the year ending March 31, 2009.

Certain subsidiaries have a number of defined contribution plans. Total amounts of cost recognized for certain subsidiaries’ contribution to the plans were ¥403 million, ¥379 million and ¥361 million ($3,603 thousand) for the years ended March 31, 2006, 2007 and 2008, respectively. NIDEC expects to contribute approximately ¥347 million ($3,463 thousand) for the year ending March 31, 2009.

16. Other long-term liabilities:

Other long-term liabilities as of March 31, 2007 and 2008 consist of the following:

	Yen in millions		U.S. dollars in thousands
	March 31		March 31,
	2007	2008	2008
Deferred tax liabilities	¥ 4,614	¥ 4,157	$ 41,491
Long-term accrued liabilities	4,271	3,034	30,283
Unrecognized tax benefits *	-	2,374	23,695
Revenue received in advance	1,000	1,363	13,604
Other	1,327	1,534	15,311
	¥ 11,212	¥ 12,462	$ 124,384

Note:

* “Unrecognized tax benefits” information is described at note No.19 “Income taxes”

F-48

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

17. Shareholders’ equity:

In June 2004, the Company issued 5,620,000 shares of common stock in a public offering in Japan, and received proceeds in the amount of ¥59,954 million.

On November 18, 2005, the Company completed a two-for-one stock split. The number of shares issued was 71,542,257 shares. There was no increase in the common stock account in accordance with the related Japanese law. All per share amounts have been restated to reflect the retroactive effect of the stock split.

Conversions of convertible debt into common stock are accounted for in accordance with the provisions of the related Japanese law by crediting approximately one-half of the conversion proceeds to the common stock account and the remainder to the additional paid-in capital account.

The Japanese Company Law (the “Company Law”) provides that an amount equal to 10% of cash dividends from retained earnings by the Company and its Japanese subsidiaries must be appropriated as a legal reserve. No further appropriations are required when the sum of the legal reserves reaches 25% of stated capital. These reserves currently exceed 25% of stated capital and are available for dividends under the Company Law subject to approval at the shareholders’ meeting. Certain foreign subsidiaries are also required to appropriate their earnings to legal reserves under the laws of the respective countries.

The amount of statutory retained earnings of the Company available for dividend payments to shareholders was ¥70,798 million and ¥85,057 million ($848,957 thousand) for the years ended March 31, 2007 and 2008, respectively. In accordance with customary practice in Japan, the appropriations are not accrued in the financial statements for the period to which they relate, but are recorded in the subsequent accounting period. Retained earnings for the year ended March 31, 2008 includes amounts representing final cash dividends of ¥ 4,348 million ($43,398 thousand), ¥ 30 ($0.30) per share.

In connection with the repurchased treasury stock, it is not permitted to pay any dividend under the Company Law. On February 1, 2008, NIDEC resolved at a meeting of its Board of Directors to repurchase its own shares (“Share Repurchase”).

Details of Share Repurchase
Class of shares:	Common stock
Total number of shares to repurchase:	Up to 1,000,000 shares 0.69% of the total number of shares issued
Total repurchase amount:	Up to 6 billion yen
Period of repurchase:	From February 4, 2008 to February 3, 2009

F-49

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Retained earnings relating to equity in undistributed earnings reflect ¥415 million,  ¥402 million and ¥357 million ($3,563 thousand) of accumulated deficit of the companies accounted for by the equity method for the years ended March 31, 2006, 2007 and 2008.

Detailed components of accumulated other comprehensive income at March 31, 2006, 2007 and 2008 and the related changes, net of taxes, for the years ended March 31, 2006, 2007 and 2008 consist of the following:

	Yen in millions
	Foreign currency translation adjustments		Unrealized gains (losses) from securities		Minimum pension liability adjustment		Pension liability adjustment	Accumulated other comprehensive income (loss)
Balance at March 31, 2005	¥ (9,466	)	¥ 2,777		¥ (56	)	-	¥ (6,745	)
Other comprehensive income (loss)	9,391		1,086		(59	)	-	10,418
Balance at March 31, 2006	(75	)	3,863		(115	)	-	3,673
Other comprehensive income (loss)	6,949		(539	)	(25	)	-	6,385
Adoption of SFAS No. 158	-		-		140		263	403
Balance at March 31, 2007	6,874		3,324		-		263	10,461
Other comprehensive income (loss)	(17,107	)	(2,308	)	-		305	(19,110	)
Balance at March 31, 2008	¥ (10,233	)	¥ 1,016		-		¥ 568	¥ (8,649	)
	U.S. dollars in thousands
	Foreign currency translation adjustments		Unrealized gains (losses) from securities		Minimum pension liability adjustment		Pension liability adjustment	Accumulated other comprehensive income (loss)
Balance at March 31, 2007	$ 68,610		$ 33,177		-		$ 2,625	$ 104,412
Other comprehensive income (loss)	(170,746	)	(23,036	)	-		3,044	(190,738	)
Balance at March 31, 2008	$ (102,136	)	$ 10,141		-		$ 5,669	$ (86,326	)

The minimum pension liability adjustment shown in the above table relates to two consolidated subsidiaries.

F-50

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Tax effects allocated to each component of other comprehensive income for the years ended March 31, 2006, 2007 and 2008 are as follows:

	Yen in millions
	Pre-tax amount		Tax expense		Net-of-tax amount
For the year ended March 31, 2006:
Foreign currency translation adjustments	¥ 9,345		¥ 46		¥ 9,391
Unrealized gains (losses) from securities:
Unrealized holding gains (losses) arising during period	5,721		(2,346	)	3,375
Reclassification adjustments for gains and losses realized in net income	(3,869	)	1,580		(2,289	)
Minimum pension liability adjustment	(100	)	41		(59	)
Other comprehensive income (loss)	¥ 11,097		¥ (679	)	¥ 10,418
For the year ended March 31, 2007:
Foreign currency translation adjustments	¥ 7,001		¥ (52	)	¥ 6,949
Unrealized gains (losses) from securities:
Unrealized holding gains (losses) arising during period	2		(1	)	1
Reclassification adjustments for gains and losses realized in net income	(943	)	403		(540	)
Minimum pension liability adjustment	(44	)	19		(25	)
Other comprehensive income	¥ 6,016		¥ 369		¥ 6,385
For the year ended March 31, 2008:
Foreign currency translation adjustments	¥ (17,432	)	¥ 325		¥ (17,107	)
Unrealized gains (losses) from securities:
Unrealized holding gains (losses) arising during period	(3,457	)	1,417		(2,040	)
Reclassification adjustments for gains and losses realized in net income	(454	)	186		(268	)
Pension liability adjustment:
Actual (gains) losses arising during period	(127	)	472		345
Reclassification adjustments for actual gains and losses realized in net income	(5	)	2		(3	)
Reclassification adjustments for prior service credit realized in net income	(62	)	25		(37	)
Other comprehensive income	¥ (21,537	)	¥ 2,427		¥ (19,110	)

F-51

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

	U.S. dollars in thousands
	Pre-tax amount		Tax expense	Net-of-tax amount
For the year ended March 31, 2008:
Foreign currency translation adjustments	$ (173,990	)	$ 3,244	$ (170,746	)
Unrealized gains (losses) from securities:
Unrealized holding gains (losses) arising during period	(34,504	)	14,143	(20,361	)
Reclassification adjustments for gains and losses realized in net income	(4,531	)	1,856	(2,675	)
Pension liability adjustment:
Actual (gains) losses arising during period	(1,268	)	4,711	3,443
Reclassification adjustments for actual gains and losses realized in net income	(50	)	20	(30	)
Reclassification adjustments for prior service credit realized in net income	(619	)	250	(369	)
Other comprehensive income	$ (214,962	)	$ 24,224	$ (190,738	)

F-52

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

18. Stock-based compensation:

On May 14, 2003, the Company’s shareholders approved a stock option plan. Under the plan, executives and certain employees receive options. The number of shares to be issued upon exercise of the options is limited to 296,700 shares of the Company’s common stock. Each option entitles the holder to purchase 100 shares of the Company’s common stock. The options vested at June 30, 2004 and became exercisable for the period from July 1, 2004 to June 30, 2007. The exercise price was determined as ¥7,350 ($73.36) per share of common stock. Options were granted with an exercise price equal to the closing price of the Company’s shares traded on the Osaka Securities Exchange on the grant date.

On November 18, 2005, the Company completed a two-for-one stock split. As a result, the exercise price changed to ¥3,675 ($36.68) per share of common stock. The exercise price is presented by the changed price retroactive to the previous fiscal year in the table below.

	Number of options	Exercise price (per share)
Balance at March 31, 2003:
Granted	2,967	¥ 3,675	$ 36.68
Exercised	-	-	-
Canceled	105	3,675	36.68
Balance at March 31, 2004:	2,862	3,675	36.68
Exercised	439	3,675	36.68
Canceled	61	3,675	36.68
Balance at March 31, 2005:	2,362	3,675	36.68
Exercised	606	3,675	36.68
Canceled	-	-	-
Balance at March 31, 2006:	1,756	3,675	36.68
Exercised	596	3,675	36.68
Canceled	-	-	-
Balance at March 31, 2007:	1,160	3,675	36.68
Exercised	1,035	3,675	36.68
Canceled	125	¥ 3,675	$ 36.68
Balance at March 31, 2008:	0

F-53

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The fair value of the option was ¥3,499 ($34.92) per share. The fair value as of the date of grant was estimated using a Black-Scholes option-pricing model with the following assumptions:

	As of May 14, 2003
Risk-free interest rate	0.14	%
Expected volatility	64.00	%
Expected dividend yield	0.34	%
Expected lives	4.13	years

In December 2004, the FASB issued SFAS No. 123R (“SFAS 123R”), revised 2004, “Share-Based Payment.” SFAS 123R requires measurement of compensation cost for all share-based payments (including employee stock options) at fair value for interim or annual periods beginning after June 15, 2005. The Company adopted SFAS 123R using the modified-prospective transition method beginning April 1, 2006. The adoption of SFAS 123R did not have any impact on NIDEC’s consolidated financial position, consolidated results of operations, or liquidity.

F-54

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

19. Income taxes:

The components of income before income taxes comprise the following:

	Yen in millions			U.S. dollars in thousands
	For the year ended March 31			For the year ended March 31,
	2006	2007	2008	2008
Income before income taxes:
The Company and domestic subsidiaries	¥ 39,370	¥ 37,141	¥ 25,865	$ 258,159
Foreign subsidiaries	25,008	28,454	36,818	367,482
	¥ 64,378	¥ 65,595	¥ 62,683	$ 625,641

The provision for income taxes consists of the following:

	Yen in millions					U.S. dollars in thousands
	For the year ended March 31					For the year ended March 31,
	2006	2007		2008		2008
Current income tax expense:
The Company and domestic subsidiaries	¥ 10,947	¥ 15,562		¥ 8,604		$ 85,877
Foreign subsidiaries	2,680	2,893		4,815		48,059
Total current	13,627	18,455		13,419		133,936
Deferred income tax expense (benefit):
The Company and domestic subsidiaries	1,279	(829	)	4,418		44,096
Foreign subsidiaries	307	(166	)	(2,353	)	(23,486	)
Total deferred	1,586	(995	)	2,065		20,610
Total provision	¥ 15,213	¥ 17,460		¥ 15,484		$ 154,546

The low effective tax rates of the Company and domestic subsidiaries for the year ended March 31, 2008 were mainly due to the extinguishment of the effect of transfer pricing taxation of the previous period and an increase in the income tax provision by the adoption of FIN 48. For the year ended March 31, 2007, the Company incurred additional tax expense of approximately ¥2,850 million as a result of an examination by the tax authority in relation to transfer pricing. There was no such impact in the current year. This decrease in tax expense was partially offset by the impact of FIN 48 in the current year.

F-55

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

With regard to the effective tax rates of the Company and domestic subsidiaries for the year ended March 31, 2007, it approached the statutory tax rate. This was mainly due to the result of a net decrease in the valuation allowance and an increase in additional tax expenses based on transfer pricing taxation.

The low effective tax rates of the Company and domestic subsidiaries for the year ended March 31, 2006 were mainly due to a net decrease in the valuation allowance.

NIDEC is subject to a number of different income taxes, which, in the aggregate, indicate a statutory rate in Japan of approximately 41.0% in 2006, 2007 and 2008. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the year ended March 31
	2006		2007		2008
Statutory tax rate	41.0	%	41.0	%	41.0	%
Increase (reduction) in taxes resulting from:
Tax benefit in foreign subsidiaries	(12.6	)	(14.8	)	(20.2	)
Tax on undistributed earnings	1.5		1.2		1.6
Valuation allowance	(6.6	)	(5.4	)	(1.4	)
Transfer pricing taxation	-		4.3		-
Liabilities for unrecognized tax benefits	-		-		2.5
Other	0.3		0.3		1.2
Effective income tax rate	23.6	%	26.6	%	24.7	%

The effective income tax rate for the year ended March 31, 2008 was lower compared to the effective income tax rate for the year ended March 31, 2007. The main reason of this decrease was due to a net impact of a decrease in the impact on the effective tax rate of the valuation allowance and tax benefit in foreign subsidiaries and the adoption of FIN 48 as well as the effects of transfer pricing taxation paid for the prior year.

The aggregate dollar and per share effects of tax holidays are as follows:

		Yen in millions			U.S. dollars in thousands
		For the year ended March 31			For the year ended March 31,
		2006	2007	2008	2008
Aggregate amounts of tax holidays		¥ 4,100	¥ 5,544	¥ 5,256	$ 52,460
		Yen			U.S. dollars
Per share	－ basic	¥ 28.58	¥ 38.32	¥ 36.27	$ 0.36
	－ diluted	¥ 27.53	¥ 37.24	¥ 35.28	$ 0.35

F-56

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The significant components of deferred tax assets and liabilities are as follows:

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Deferred tax assets:
Inventories	¥ 2,199		¥ 2,651		$ 26,460
Property, plant and equipment	6,126		6,990		69,767
Accrued bonus	2,175		2,569		25,641
Accrued enterprise tax	746		893		8,913
Pension and severance plans	7,323		6,646		66,334
Operating loss carryforwards for tax purposes	3,162		3,313		33,067
Foreign tax credit	2,220		1,982		19,782
Other	(4,534	)	(595	)	(5,938	)
Gross deferred tax assets	19,417		24,449		244,026
Less - Valuation allowance	(4,279	)	(6,455	)	(64,428	)
Net deferred tax assets	15,138		17,994		179,598
Deferred tax liabilities:
Basis difference of acquired assets	(2,932	)	(2,952	)	(29,464	)
Undistributed earnings not permanently reinvested	(2,082	)	(2,561	)	(25,561	)
Maketable securities	(3,972	)	(2,396	)	(23,915	)
Intangible assets	(2,936	)	(159	)	(1,587	)
Other	7,297		3,845		38,378
Gross deferred tax liabilities	(4,625	)	(4,223	)	(42,149	)
Net deferred tax assets	¥ 10,513		¥ 13,771		$ 137,449

Operating loss carryforwards for tax purposes of consolidated subsidiaries on March 31, 2008 amounted to approximately ¥12,282 million ($122,587 thousand) and are available as an offset against future taxable income of such subsidiaries.

With the exception of ¥2,774 million ($27,687 thousand) with no expiration period, total available operating loss carryforwards expire at various dates primarily up to 7 years.

The valuation allowance mainly relates to deferred tax assets of consolidated subsidiaries with operating loss carryforwards for tax purposes that are not expected to be realized. The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2006, 2007 and 2008 consist of the following:

F-57

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

	Yen in millions						U.S. dollars in thousands
	March 31						March 31,
	2006		2007		2008		2008
Valuation allowance at beginning of year	¥ (15,593	)	¥ (11,602	)	¥ (4,279	)	$ (42,709	)
Additions	-		-		(2,785	)	(27,797	)
Deductions	3,991		8,676		890		8,883
Impact of acquisition of companies	-		(1,353	)	(281	)	(2,805	)
Valuation allowance at end of year	¥ (11,602	)	¥ (4,279	)	¥ (6,455	)	$ (64,428	)

Net deferred tax assets are included in the consolidated balance sheets as follows:

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Deferred tax assets:
Other current assets	¥ 6,454		¥ 6,896		$ 68,829
Other non-current assets	8,684		11,098		110,769
Deferred tax liabilities:
Other current liabilities	(11	)	(66	)	(658	)
Other long-term liabilities	(4,614	)	(4,157	)	(41,491	)
Net deferred tax assets	¥ 10,513		¥ 13,771		$ 137,449

Management of NIDEC intends to reinvest certain undistributed earnings of foreign subsidiaries for an indefinite period of time. As a result, no deferred tax liability has been recorded on undistributed earnings of these subsidiaries, which are not expected to be remitted in the foreseeable future, aggregating ¥89,893 million ($897,225 thousand) as of March 31, 2008. NIDEC estimates an additional deferred tax liability of ¥18,026 million ($179,918 thousand) would be required at such time if the full amount of these accumulated earnings were expected to be remitted.

NIDEC adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) effective April 1, 2007. The adoption of FIN 48 resulted in a ¥987 million reduction of our beginning balance of retained earnings and a ¥987 million ($9,851 thousand) increase in corresponding liability for unrecognized tax benefits.

F-58

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Yen in millions	U.S. dollars in thousands
	March 31,	March 31,
	2008	2008
Balance at April 1	¥ 865	$ 8,634
Additions for tax positions of the current year	1,509	15,061
Additions for tax positions of prior years	-	-
Reductions for tax positions of prior years	-	-
Lapse of the applicable statute of limitations	-	-
Settlements	-	-
Balance at March 31	¥ 2,374	$ 23,695

Total amount of unrecognized tax benefits that would reduce the effective tax rate, if recognized, is ¥2,374 million ($23,695 thousand).

Although NIDEC believes its estimates and assumptions of unrecognized tax benefits are reasonable, uncertainty regarding the final determination of tax audit settlements and any related litigation could affect the effective tax rate in the future periods. Based on each of the items of which NIDEC is aware of at March 31, 2008, no significant changes to the unrecognized tax benefits are expected within the next twelve months.

NIDEC recognizes interest and penalties related to unrecognized tax benefits as a component of other, net in the consolidated statements of income. The total gross accrued interest and penalty as of April 1, 2007 and March 31, 2008 were ¥122 million ($1,218 thousand) and ¥344 million ($3,433 thousand), respectively. Interest and penalties included in other, net were ¥222 million ($2,215 thousand) for the year ended March 31, 2008.

NIDEC files income tax returns in Japan and various foreign tax jurisdictions. The fiscal years beginning after April 1, 2002 are still open to examination by Japan and foreign taxing authorities, including several major taxing jurisdictions except as described below. In Singapore, NIDEC is open to examination from 2000 onward. In Germany and Philippines, NIDEC is open to examination from 2003 onward. In Thailand, Hong Kong and Vietnam, NIDEC is open to examination from 2005 onward.

F-59

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

20. Reconciliation of the differences between basic and diluted earnings per share:

The table below sets forth a reconciliation of the differences between basic and diluted income per share for the years ended March 31, 2006, 2007 and 2008.

		Yen in millions	Thousands of shares	Yen	U.S. dollars
		Net income	Weighted- average shares	Net income per share	Net income per share
For the year ended March 31, 2006:
Basic net income per share
Net income available to common shareholders		¥ 40,949	143,445	¥ 285.47
Effect of dilutive securities
	Unsecured 0.8% convertible bonds	11	872
	Zero coupon 0.0% convertible bonds	-	4,386
	Securities of a subsidiary	0	-
	Stock option	-	212
Diluted net income per share
	Net income for computation	¥ 40,960	148,915	¥ 275.05
For the year ended March 31, 2007:
Basic net income per share
Net income available to common shareholders		¥ 39,932	144,665	¥ 276.03
Effect of dilutive securities
	Zero coupon 0.0% convertible bonds	-	4,022
	Stock option	-	174
Diluted net income per share
	Net income for computation	¥ 39,932	148,861	¥ 268.25
For the year ended March 31, 2008:
Basic net income per share
Net income available to common shareholders		¥ 41,156	144,914	¥ 284.00	$ 2.83
Effect of dilutive securities
	Zero coupon 0.0% convertible bonds	-	4,022
	Stock option	-	26
Diluted net income per share
	Net income for computation	¥ 41,156	148,962	¥ 276.29	$ 2.76

F-60

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

21. Financial instruments:

NIDEC manages the exposure of its financial assets and liabilities to interest rate and foreign exchange rate movements through the use of derivative financial instruments which include foreign exchange forward contracts, interest rate swaps, interest rate currency swap agreements, and interest rate cap agreements. These financial instruments are executed with creditworthy financial institutions, and substantially all foreign currency contracts are denominated in U.S. dollars. Financial instruments involve, to varying degrees, market risk as instruments are subject to price fluctuations and elements of credit risk in the event that the counterparty should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, NIDEC’s risk is limited to the fair value of the instrument. Although NIDEC may be exposed to losses in the event of non-performance by counterparties on financial instruments, it does not anticipate significant losses due to the nature of its counterparties. Counterparties to NIDEC’s financial instruments represent, in general, international financial institutions. Additionally, NIDEC does not have a significant exposure to any individual counterparty. Based on the creditworthiness of these financial institutions, NIDEC believes that the overall credit risk related to its financial instruments is insignificant.

The estimated fair values of NIDEC’s financial instruments are summarized as follows:

	Yen in millions
	March 31, 2007
	Carrying amount		Estimated fair value
Asset (Liability)
Cash and cash equivalents	¥ 88,784		¥ 88,784
Short-term investments	3,541		3,541
Short-term loan receivable	8		8
Marketable securities	20,118		20,118
Long-term loan receivable	379		374
Short-term borrowings	(78,848	)	(78,848	)
Long-term debt including the current portion and excluding capital lease obligation	(28,924	)	(34,424	)
Foreign exchange forward contracts	3		3
Interest rate swap agreements	(12	)	(12	)
Interest rate currency swap agreements	(27	)	(27	)

F-61

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

	Yen in millions				U.S. dollars in thousands
	March 31, 2008				March 31, 2008
	Carrying amount		Estimated fair value		Carrying amount		Estimated fair value
Asset (Liability)
Cash and cash equivalents	¥ 100,809		¥ 100,809		$ 1,006,178		$ 1,006,178
Short-term investments	3,851		3,851		38,437		38,437
Short-term loan receivable	10		10		100		100
Marketable securities	13,711		13,711		136,850		136,850
Long-term loan receivable	291		298		2,904		2,974
Short-term borrowings	(68,854	)	(68,854	)	(687,234	)	(687,234	)
Long-term debt including the current portion and excluding capital lease obligation	(27,398	)	(29,189	)	(273,460	)	(291,336	)
Foreign exchange forward contracts	5		5		50		50
Interest rate swap agreements	(7	)	(7	)	(70	)	(70	)
Interest rate currency swap agreements	(12	)	(12	)	(120	)	(120	)

The following are explanatory notes relating to the financial instruments.

Cash and cash equivalents, short-term investments, short-term loans receivable and short-term borrowings: In the normal course of business, substantially all cash and cash equivalents, time deposits short-tem loans receivable and short-term borrowing are highly liquid and are carried at amounts that approximate fair value.

Marketable securities: The fair value of marketable securities was based on quoted market prices.

Long-term loan receivable: The fair value of long-term loans was estimated by discounting expected future cash flows.

Long-term debt: The fair value of bonds issued by NIDEC was estimated based on their market price which was influenced by, and corresponded to stock price. The fair value of long-term bank loans (including the current portion and excluding the capital lease obligation) was estimated based on the discounted amounts of future cash flows using NIDEC’s current incremental borrowing rates for similar liabilities.

F-62

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Derivative financial instruments

Changes in the estimated fair value of foreign exchange forward contracts are recognized as “Other, net” in the consolidated statement of income.

Gains from foreign exchange forward contracts for the years ended March 31, 2006, 2007, and 2008 were ¥25 million, ¥4 million, and ¥2 million ($20 thousand), respectively. The contracted amounts outstanding on March 31, 2007 and 2008 were ¥391 million and ¥180 million ($1,797 thousand), respectively.

Interest rate swaps, and interest rate currency swap agreements, which mature from 2009 to 2011, were designed to reduce NIDEC’s exposure to losses resulting from adverse fluctuations in cash flows due to changes in interest rates and currency exchange rates on underlying debt instruments. The interest rate cap agreement, which was designed for the same purpose, matured in 2006.

Changes in the fair value of interest rate swaps and interest rate currency swap agreements are recognized as “Other, net” in the income statement. Gain from interest rate swaps for the year ended March 31, 2006 was ¥34 million. Loss on interest rate swaps and interest rate currency swap agreements was ¥23 million for the year ended March 31, 2007 and gain from them was ¥16 million ($160 thousand) for the year ended March 31, 2008. The contracted amounts outstanding on March 31, 2007 and 2008 were ¥1,320 million and ¥1,296 million ($12,935 thousand), respectively.

Interest rate cap agreements require the writer to pay the purchaser at specified future dates the amounts, if any, by which a specified market interest rate exceeds the fixed cap rate, applied to a notional amount. The premiums paid for interest rate cap agreements purchased are included in “Other current assets” and “Other non-current assets” in the accompanying consolidated balance sheets. Differences between the premium paid and fair value of these contracts and subsequent changes in fair values of option prices, which are calculated based on the Black-Scholes option-pricing model, are recognized as “Other, net” in the income statement. Gains from interest rate cap agreements for the years ended March 31, 2006 and 2007 were ¥16 million and ¥8 million, respectively. There were no outstanding contracts as of March 31, 2007 and 2008.

F-63

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

22. Related party transactions:

As of March 31, 2008, the president of the Company and a business entity indirectly owned by the president of the Company held 8.2% and 6.1% of the outstanding shares of the Company, respectively. There were no significant related party transactions other than those described in Note 11.

23. Lease commitments:

NIDEC leases certain assets under capital lease and operating lease arrangements. An analysis of leased assets under capital leases is as follows:

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
Class of property	2007		2008		2008
Machinery and equipment	¥ 11,286		¥ 9,678		$ 96,596
Other leased assets	915		1,186		11,838
Less - Accumulated amortization	(7,390	)	(7,236	)	(72,223	)
	¥ 4,811		¥ 3,628		$ 36,211

Amortization expenses under capital leases for the years ended March 31, 2006, 2007 and 2008 were ¥1,947 million, ¥1,874 million and ¥1,977 million ($19,733 thousand), respectively.

Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of March 31, 2008 are as follows:

Year ending March 31:	Yen in millions		U.S. dollars in thousands
2009	¥ 2,205		$ 22,008
2010	1,952		19,483
2011	770		7,685
2012	401		4,002
2013	163		1,627
2014 and thereafter	22		220
Total minimum lease payments	5,513		55,025
Less - Amount representing interest	(286	)	(2,854	)
Present value of net minimum lease payments	5,227		52,171
Less - Current obligations	(2,072	)	(20,681	)
Long-term capital lease obligations	¥ 3,155		$ 31,490

F-64

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

Rental expenses under operating leases for the years ended March 31, 2006, 2007 and 2008 were ¥560 million, ¥478 million and ¥1,129 million ($11,269 thousand), respectively.

The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2008 are as follows:

Year ending March 31:		Yen in millions	U.S. dollars in thousands
	2009	¥ 871	$ 8,693
	2010	733	7,316
	2011	689	6,877
	2012	626	6,248
	2013	532	5,310
	2014 and thereafter	1,331	13,285
	Total minimum future rentals	¥ 4,782	$ 47,729

NIDEC is a lessor in operating leases for which a portion of the land, office and manufacturing facilities is subleased over various terms. Rental revenues under operating leases for the years ended March 31, 2006, 2007 and 2008 were ¥45 million, ¥66 million and ¥103 million ($1,028 thousand), respectively.

The future minimum lease payments to be received under operating leases that have remaining non-cancelable terms at March 31, 2008 are as follows:

Year ending March 31:		Yen in millions	U.S. dollars in thousands
	2009	¥ 110	$ 1,098
	2010	91	908
	2011	91	908
	2012	91	908
	2013	90	899
	2014 and thereafter	79	789
	Total minimum future rentals	¥ 552	$ 5,510

F-65

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

24. Other commitments and contingencies, concentrations and factors that may affect future operations:

Commitments -

Commitments outstanding at March 31, 2008 for the purchase of property, plant and equipment and other assets approximated ¥8,389 million ($83,731 thousand).

Contingencies -

Contingent liabilities for guarantees given in the ordinary course of business amounted to approximately ¥293 million ($2,924 thousand) at March 31, 2008. NIDEC has guaranteed approximately ¥293 million ($2,924 thousand) of bank loans of employees for their housing costs. If an employee defaults on his/her loan payments, NIDEC is required to perform under the guarantee. The undiscounted maximum amount of NIDEC’s obligation to make future payments in the event of defaults is approximately ¥293 million ($2,924 thousand). The current carrying amount of the liabilities for NIDEC’s obligations under the guarantee is zero.

Concentration of risk -

NIDEC is dependent on a number of large customers for a substantial portion of NIDEC’s net sales. Sales to NIDEC’s six largest customers represented approximately 34%, 37%, and 36% of consolidated net sales for the years ended March 31, 2006, 2007, and 2008, respectively. Sales to NIDEC’s largest customer were approximately 11%, 11%, and 10% of consolidated net sales for the years ended March 31, 2006, 2007, and 2008, respectively. Accounts receivable are financial instruments that expose NIDEC to a concentration of credit risk. At March 31, 2007, the six largest customers with outstanding accounts receivable balances totaled ¥49,097 million, or 33% of the gross accounts receivable, compared to ¥47,629 million ($475,387 thousand), or 32% of the gross accounts receivable, at March 31, 2008. If any one or group of these customer’s receivable balances should be deemed uncollectable, it would have a mater ially adverse effect on NIDEC’s results of operations and financial condition.

Product warranty –

NIDEC guarantees the performance of products delivered and services rendered for a certain period or term. Estimates for warranty cost are made based on historical warranty claim experience. The changes in product warranty liability for the years ended March 31, 2007 and 2008 are summarized as follows:

F-66

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

	Yen in millions				U.S. dollars in thousands
	March 31				March 31,
	2007		2008		2008
Balance at beginning of year	¥ 213		¥ 252		$ 2,515
Addition	60		47		469
Utilization	(25	)	(58	)	(579	)
Foreign exchange impact	4		0		0
Balance at end of year	¥ 252		¥ 241		$ 2,405

F-67

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

25. Segment information:

(1) Enterprise-wide information:

Product information –

The following table provides product information for the years ended March 31, 2006, 2007 and 2008:

		Yen in millions			U.S. dollars in thousands
		For the year ended March 31			For the year ended March 31,
		2006	2007	2008	2008
Net sales:
	Small precision motors:
	Hard disk drives spindle motors	¥ 164,575	¥ 198,196	¥ 223,068	$ 2,226,450
	Other small precision brushless DC motors	66,463	74,445	92,359	921,838
	Brushless DC fans	34,872	38,656	46,525	464,368
	Other small precision motors *1	7,849	6,684	23,730	236,850
	Sub-total	273,759	317,981	385,682	3,849,506
	Mid-size motors	37,767	57,389	96,377	961,942
	Machinery	73,243	82,944	73,253	731,141
	Electronic and optical components	128,791	144,651	159,266	1,589,640
	Others	23,298	26,702	27,548	274,957
	Consolidated total	¥ 536,858	¥ 629,667	¥ 742,126	$ 7,407,186

*1 “Small precision brush DC motors” was changed to “Other small precision motors” from the beginning of this year because the diversity of the products increased.

The “Hard disk drives spindle motors” group of products consists of hard disk drives spindle motors for 3.5-inch, 2.5-inch, 1.8-inch and 1.0-inch hard disk drives.

The “Other small precision brushless DC motors” group of products consists of brushless motors for many types of products, including optical disk drives, copiers, printers and fax machines.

F-68

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The “Brushless DC fans” group of products consists of brushless fans, which are used in many types of products, including computers and game machines for the purpose of lowering the temperature of central processing units in these products.

The “Other small precision motors” group of products consists of vibration motors for mobile phones, brush DC motors for many types of products, and stepping motors.

The “Mid-size motors” group of products consists of motors which are used in automobiles, various electric household appliances and industrial equipment.

The “Machinery” group of products consists of semi-conductor manufacturing supplies, test systems, measuring equipment, power transmission equipment, factory automation systems, card readers and industrial robots.

The “Electronic and optical components” group of products consists of camera shutters, camera lends units, encoders, switches, trimmer potentiometers, motor driven actuator units, optical pickup units, processing and precision plastic mold products.

“Others” consists of auto parts, pivot assemblies, other components and other services.

Geographic information –

Revenues from external customers, which are attributed to countries based on the location of the parent company or the subsidiaries that transacted with the external customer for the years ended March 31, 2006, 2007 and 2008, and long-lived assets for the years ended March 31, 2007 and 2008 are as follows:

		Yen in millions			U.S. dollars in thousands
		For the year ended March 31			For the year ended March 31,
		2006	2007	2008	2008
Sales and operating revenue:
	Japan	¥ 294,307	¥ 341,642	¥ 371,705	$ 3,710,001
	U.S.A.	8,398	10,747	19,513	194,760
	Singapore	72,970	59,488	57,635	575,257
	Thailand	56,246	80,579	109,994	1,097,854
	The Philippines	6,848	12,929	13,374	133,486
	China	30,565	36,884	45,398	453,119
	Other	67,524	87,398	124,507	1,242,709
	Consolidated total	¥ 536,858	¥ 629,667	¥ 742,126	$ 7,407,186

F-69

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions		U.S. dollars in thousands
		For the year ended March 31		For the year ended March 31,
		2007	2008	2008
Long-lived assets:
	Japan	¥ 81,160	¥ 82,306	$ 821,499
	U.S.A.	1,248	1,128	11,259
	Singapore	2,131	2,393	23,885
	Thailand	39,670	36,373	363,040
	The Philippines	19,189	13,828	138,018
	China	39,048	37,336	372,652
	Other	24,796	25,465	254,167
	Consolidated total	¥ 207,242	¥ 198,829	$ 1,984,520

 (2) Operating segment information:

The operating segments reported below are defined as components of an enterprise for which separate financial information is available and regularly reviewed by NIDEC’s chief operating decision maker. NIDEC’s chief operating decision maker utilizes various measurements to assess segment performance and allocate resources to segments.

NIDEC acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France (“NMA”) in December 2006. As the materiality of these segments increased, NMA has been identified as a reportable operating segment since three months ended June 30, 2007. Segment information for the years ended March 31, 2007 has been restated to conform to the current presentation. NIDEC acquired a majority of the voting rights of Japan Servo Co., Ltd. (“JSRV”) in April 2007. JSRV has been identified as a reportable operating segment since six months ended September 30, 2007.

The NCJ segment comprises NIDEC Corporation in Japan, which primarily produces and sells hard disk drive motors, DC motors, fans, and Mid-size motors.

The NET segment comprises Nidec Electronics (Thailand) Co., Ltd. and Nidec Precision (Thailand) Co., Ltd., subsidiaries in Thailand, which primarily produce and sell hard disk drive motors.

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

The NCD segment comprises Nidec (Dalian) Limited, a subsidiary in China, which primarily produces and sells DC motors and fans.

F-70

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The NCS segment comprises Nidec Singapore Pte. Ltd., a subsidiary in Singapore, which primarily produces and sells hard disk drive motors and pivot assemblies, and sells DC motors and fans.

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

The NCF segment comprises Nidec Philippines Corporation and Nidec Precision Philippines Corporation, subsidiaries in The Philippines, which primarily produce and sell hard disk drive motors.

The NSNK segment comprises Nidec Sankyo Corporation, a subsidiary in Japan, which primarily produces and sells DC motors, machinery, and optical and electronic parts.

The NCPL segment comprises Nidec Copal Corporation, a subsidiary in Japan, which primarily produces and sells optical and electronic parts and machinery.

The NTSC segment comprises Nidec Tosok Corporation, a subsidiary in Japan, which primarily produces and sells automobile parts and machinery.

The NCEL segment comprises Nidec Copal Electronics Corporation, a subsidiary in Japan, which primarily produces and sells electronic parts.

The JSRV segment comprises Japan Servo Co., Ltd. in Japan, which primarily produces and sells DC motors, fans and other small precision motors. JSRV has been a new reportable segment since 2008.

The NSBC segment comprises Nidec Shibaura Corporation, a subsidiary in Japan, which primarily produces and sells mid-size motors.

The NSCJ segment comprises Nidec-Shimpo Corporation, a subsidiary in Japan, which primarily produces and sells power transmission drives, measuring machines and electric potter’s wheels.

The NMA segment comprises Nidec Motors & Actuators (Germany) GmbH and other subsidiaries in Europe and North America, which primarily produce and sell in-car motors. NMA has been a new reportable segment since 2008.

The NNSN segment comprises Nidec Nissin Corporation, a subsidiary in Japan, which primarily produces and sells optical components.

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

F-71

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

NIDEC has sixteen reportable segments, NCJ, NET, NCC, NCD, NCS, NCH, NCF, NSNK, NCPL, NTSC, NCEL, JSRV, NSBC, NSCJ, NMA, and NNSN which have been identified in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information.

NIDEC evaluates performance based on segmental profit and loss, which consists of sales and operating revenues less operating expenses. Segmental profit or loss is determined using the accounting principles in the segment’s country of domicile. NCJ, NSNK, NCPL, NTSC, NCEL, JSRV, NSBC, NSCJ, NNSN’s operating profit or loss is determined using Japanese GAAP, NET applies Thai accounting principles, NCC and NCD apply Chinese accounting principles, NCS applies Singaporean accounting principles, NCH applies Hong Kong accounting principles, NCF applies Philippine accounting principles and NMA applies mainly International Financial Reporting Standards (IFRS). Therefore NIDEC’s segmental 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. While there are several differences between U.S. GAAP and t he underlying accounting bases used by management, the principal differences that affect segmental operating profit or loss are accounting for pension and severance costs, directors’ bonuses and leases. Management believes that the monthly segmental information is available on a timely basis and that it is sufficiently accurate at the segment profit and loss level for management’s purposes.

F-72

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

The following tables show revenues from external customers and other financial information by operating segment for the years ended March 31, 2006, 2007 and 2008:

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Revenues from external customers:
	NCJ	¥ 68,613		¥ 89,466		¥ 88,954		$ 887,853
	NET	47,745		67,754		95,859		956,772
	NCC	14,995		14,802		14,161		141,341
	NCD	3,044		3,637		4,190		41,821
	NCS	62,009		49,877		45,472		453,858
	NCH	24,600		34,738		39,359		392,844
	NCF	1,186		5,382		5,833		58,219
	NSNK	70,195		64,907		58,475		583,641
	NCPL	46,408		63,008		63,779		636,580
	NTSC	22,081		22,310		25,769		257,201
	NCEL	19,151		19,849		22,392		223,495
	JSRV	-		-		25,378		253,299
	NSBC	13,502		16,146		17,286		172,532
	NSCJ	9,619		10,748		11,163		111,418
	NMA	-		9,079		36,352		362,831
	NNSN	12,022		10,895		10,847		108,264
	All others	120,041		139,338		171,824		1,714,983
	Total	535,211		621,936		737,093		7,356,952
	U.S. GAAP adjustments *1	(488	)	1,176		(3,749	)	(37,419	)
	Consolidation adjustments related to elimination of intercompany transactions via third party	(295	)	(346	)	(47	)	(469	)
	Others *2	2,430		6,901		8,829		88,122
	Consolidated total	¥ 536,858		¥ 629,667		¥ 742,126		$ 7,407,186

*1 US GAAP adjustments are mainly related to the differences of revenue recognition between shipment and delivery bases.

*2 Revenues of subsidiaries not included in management reports due to their immateriality are the main components of Others.

F-73

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

NIDEC had sales to one customer of ¥58,767 million, ¥72,037 million and ¥77,148 million within the NCJ, NET, NCC, NCS and “All Others” segments for the years ended March 31, 2006, 2007 and 2008, respectively, that exceeded 10% of NIDEC’s net sales.

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Revenues from other operating segments:
	NCJ	¥ 99,607		¥ 91,130		¥ 100,299		$ 1,001,088
	NET	29,732		21,486		32,334		322,727
	NCC	4,377		5,371		10,776		107,556
	NCD	45,629		46,828		43,849		437,658
	NCS	1,179		347		227		2,266
	NCH	2,702		4,344		4,298		42,898
	NCF	31,121		42,845		40,649		405,719
	NSNK	17,977		13,109		13,589		135,632
	NCPL	8,977		8,460		6,594		65,815
	NTSC	407		357		293		2,924
	NCEL	2,642		3,133		4,177		41,691
	JSRV	-		-		3,549		35,423
	NSBC	2,702		3,439		3,633		36,261
	NSCJ	1,514		2,448		2,455		24,503
	NMA	-		-		284		2,835
	NNSN	907		762		826		8,244
	All Others	182,093		203,616		235,225		2,347,790
	Total	431,566		447,675		503,057		5,021,030
	Intersegment elimination	(431,566	)	(447,675	)	(503,057	)	(5,021,030	)
	Consolidated total	-		-		-		-

F-74

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Segment profit or loss:
	NCJ	¥ 8,852		¥ 11,241		¥ 13,980		$ 139,535
	NET	11,335		10,822		12,606		125,821
	NCC	108		275		1,040		10,380
	NCD	3,718		4,560		4,720		47,110
	NCS	1,205		1,545		1,231		12,287
	NCH	347		386		576		5,749
	NCF	1,059		4,407		4,129		41,212
	NSNK	9,050		7,109		5,053		50,434
	NCPL	2,524		4,056		3,415		34,085
	NTSC	435		1,430		1,643		16,399
	NCEL	2,949		2,688		3,631		36,241
	JSRV	-		-		372		3,713
	NSBC	(274	)	136		(97	)	(968	)
	NSCJ	498		1,412		1,182		11,798
	NMA	-		59		555		5,539
	NNSN	683		545		610		6,088
	All Others	12,179		12,251		21,997		219,554
	Total	54,668		62,922		76,643		764,977
Main components of U.S. GAAP adjustments:
	Pension and severance costs	151		(126	)	(483	)	(4,821	)
	Lease	(167	)	(1	)	272		2,715
	Directors’ bonus	(437	)	(44	)	(3	)	(30	)
Consolidation adjustments mainly related to elimination of intersegment profits		(174	)	1,133		(1,211	)	(12,087	)
Reclassification *1		(425	)	(590	)	6,134		61,224
Others *2		(190	)	715		(4,519	)	(45,105	)
		¥ 53,426		¥ 64,009		¥ 76,833		$ 766,873

*1 Some items are reclassified from other expenses (income) and included in operating expenses (income). Reclassification mainly includes loss on disposals of fixed assets for the year ended March 31, 2007 and non-recurring gain for the year ended March 31, 2008.

*2 Profit or loss of subsidiaries not included in management reports due to their immateriality are the main components of Others. Furthermore, Others includes amortization of capitalized assets related to the business acquisitions for the year ended March 31, 2008.

F-75

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Interest revenue:
	NCJ	¥ 1,052		¥ 1,873		¥ 2,414		$ 24,094
	NET	142		227		184		1,837
	NCC	10		28		48		479
	NCD	38		55		115		1,148
	NCS	400		487		344		3,433
	NCH	11		44		39		389
	NCF	43		93		116		1,158
	NSNK	372		539		564		5,629
	NCPL	28		45		81		808
	NTSC	1		1		0		0
	NCEL	6		29		22		220
	JSRV	-		-		122		1,218
	NSBC	70		93		78		779
	NSCJ	66		32		24		240
	NMA	-		19		81		808
	NNSN	14		55		68		679
	All Others	304		595		742		7,405
	Total	2,557		4,215		5,042		50,324
	Intersegment elimination	(1,213	)	(1,907	)	(2,398	)	(23,934	)
	Consolidated total	¥ 1,344		¥ 2,308		¥ 2,644		$ 26,390

F-76

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Interest expense:
	NCJ	¥ 823		¥ 1,381		¥ 1,764		$ 17,607
	NET	0		0		1		10
	NCC	86		248		244		2,435
	NCD	0		0		0		0
	NCS	0		0		0		0
	NCH	0		0		0		0
	NCF	287		376		243		2,425
	NSNK	208		333		174		1,737
	NCPL	9		17		25		250
	NTSC	12		13		13		130
	NCEL	1		1		3		30
	JSRV	-		-		145		1,447
	NSBC	152		180		220		2,196
	NSCJ	88		73		78		779
	NMA	-		101		279		2,785
	NNSN	18		36		46		459
	All Others	789		1,104		1,401		13,982
	Total	2,473		3,863		4,636		46,272
	Intersegment elimination	(1,111	)	(1,841	)	(2,215	)	(22,108	)
	Consolidated total	¥ 1,362		¥ 2,022		¥ 2,421		$ 24,164

F-77

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions				U.S. dollars in thousands
		For the year ended March 31				For the year ended March 31,
		2006		2007	2008	2008
Depreciation:
	NCJ	¥ 1,550		¥ 1,487	¥ 1,456	$ 14,532
	NET	2,886		3,397	5,391	53,808
	NCC	383		677	945	9,432
	NCD	1,201		918	818	8,164
	NCS	465		266	314	3,134
	NCH	4		6	7	70
	NCF	2,656		3,025	3,079	30,732
	NSNK	1,016		861	1,006	10,041
	NCPL	1,561		1,351	1,292	12,895
	NTSC	707		727	766	7,645
	NCEL	803		745	915	9,133
	JSRV	-		-	318	3,174
	NSBC	75		89	105	1,048
	NSCJ	345		344	301	3,004
	NMA	-		428	1,534	15,311
	NNSN	459		463	493	4,921
	All Others	10,975		13,340	14,926	148,978
	Total	25,086		28,124	33,666	336,022
	U.S. GAAP adjustments *1	1,663		1,580	1,520	15,171
	Others *2	(464	)	293	1,148	11,458
	Consolidated total	¥ 26,285		¥ 29,997	¥ 36,334	$ 362,651

*1 Leased properties are not capitalized in the operating segments but are capitalized under U.S. GAAP.

*2 Depreciation expenses of subsidiaries not included in management reports due to their immateriality are the main components of Others.

F-78

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions						U.S. dollars in thousands
		For the year ended March 31						For the year ended March 31,
		2006		2007		2008		2008
Income tax expenses or benefit:
	NCJ	¥ 5,954		¥ 8,162		¥ 4,069		$ 40,613
	NET	351		88		179		1,787
	NCC	0		0		0		0
	NCD	353		500		267		2,665
	NCS	102		220		103		1,028
	NCH	61		66		98		978
	NCF	10		12		14		140
	NSNK	122		(1,143	)	(387	)	(3,863	)
	NCPL	607		2,060		1,199		11,967
	NTSC	157		528		886		8,843
	NCEL	1,142		1,089		1,328		13,255
	JSRV	-		-		226		2,256
	NSBC	(1,036	)	98		(141	)	(1,407	)
	NSCJ	88		551		423		4,222
	NMA	-		62		340		3,394
	NNSN	1,157		295		371		3,703
	All Others	3,800		3,479		4,048		40,402
	Total	12,868		16,067		13,023		129,983
	U.S. GAAP adjustments	1,355		(757	)	514		5,130
	Consolidation adjustments	990		2,150		1,947		19,433
	Consolidated total	¥ 15,213		¥ 17,460		¥ 15,484		$ 154,546

F-79

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions				U.S. dollars in thousands
		For the year ended March 31				For the year ended March 31,
		2007		2008		2008
Segment assets:
	NCJ	¥ 357,545		¥ 365,503		$ 3,648,099
	NET	55,326		54,590		544,865
	NCC	9,834		11,986		119,633
	NCD	23,510		22,883		228,396
	NCS	21,827		16,956		169,238
	NCH	12,731		11,286		112,646
	NCF	22,091		17,544		175,107
	NSNK	94,006		89,688		895,179
	NCPL	61,104		55,969		558,629
	NTSC	24,996		26,379		263,290
	NCEL	27,661		29,613		295,568
	JSRV	-		17,696		176,624
	NSBC	20,197		17,994		179,599
	NSCJ	21,385		20,545		205,060
	NMA	28,303		28,474		284,200
	NNSN	11,846		10,882		108,614
	All Others	216,729		221,434		2,210,141
	Total	1,009,091		1,019,422		10,174,888
U.S. GAAP adjustments:
	Lease	2,748		2,435		24,304
	Property, plant and equipment	(2,511	)	(2,721	)	(27,158	)
	Deferred tax assets	8,588		11,931		119,084
	Marketable securities	5,511		4,245		42,369
	Others	(3,961	)	(5,489	)	(54,786	)
	Sub-total	10,375		10,401		103,813
	Elimination of intersegment assets, net of taxes	(479,014	)	(490,344	)	(4,894,141	)
	Intangible assets and other fair value adjustments	16,399		17,131		170,985
	Goodwill	67,780		71,223		710,879
	To adjust affiliate from cost to equity method	81		(227	)	(2,266	)
	Others *1	37,911		44,108		440,244
	Consolidated total	¥ 662,623		¥ 671,714		$ 6,704,402

*1 Assets of subsidiaries not included in management reports due to their immateriality are the main components of Others.

F-80

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		Yen in millions			U.S. dollars in thousands
		For the year ended March 31			For the year ended March 31,
		2007		2008	2008
Expenditure for segment assets:
	NCJ	¥ 1,249		¥ 1,168	$ 11,658
	NET	9,390		3,002	29,963
	NCC	1,290		1,860	18,565
	NCD	339		480	4,791
	NCS	344		196	1,956
	NCH	11		5	50
	NCF	2,937		2,298	22,936
	NSNK	1,627		899	8,973
	NCPL	1,544		885	8,833
	NTSC	815		542	5,410
	NCEL	2,453		1,296	12,935
	JSRV	-		446	4,452
	NSBC	170		97	968
	NSCJ	123		219	2,186
	NMA	673		1,721	17,177
	NNSN	316		507	5,060
	All Others	18,301		15,660	156,304
	Total	41,582		31,281	312,217
	Reconciliation *1	(2,438	)	4,379	43,707
	Consolidated total	¥ 39,144		¥ 35,660	$ 355,924

*1 The amounts of expenditure for segment assets were on an accrual basis while the amounts of consolidated total were on a cash basis.

NIDEC did not have significant non-cash items other than depreciation in reported profit. Equities in earnings of affiliates were not allocated to the segments in the financial information report available and were not regularly reviewed by NIDEC’s chief operating decision maker. Intersegment sales were made at prices that approximate current market value.

F-81

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

26. Subsequent events: (Unaudited)

Dividends for the second half of the fiscal year ended March 31, 2008

Subsequent to March 31, 2008, the Company’s Board of Directors declared a cash dividend of ¥4,348 million ($43,398 thousand) payable on June 10, 2008 to stockholders as of March 31, 2008.

Lawsuits against SEMCO

NIDEC has filed lawsuits in the Osaka District Court on July 30, 2008 against Samsung Electro-Mechanics Co., Ltd. ("SEMCO"), an electronic components manufacturer based in Korea, for infringement of three Japanese patents (Nos. 3344913, 3502266, 3688015) regarding NIDEC's spindle motors mainly used for CD/DVD drives.

NIDEC has confirmed that certain disk drives currently sold in Japan use SEMCO's infringing spindle motors and requested injunctions to preclude SEMCO from marketing such motors in the Japanese market.

Redemption at maturity

On October 17, 2008, NIDEC redeemed zero coupon 0.0% convertible bonds at maturity. The total bonds redeemed were ¥26,412 million ($263,619 thousand). NIDEC financed the redemption cost by borrowings from banks.

Dividends for the first half of the fiscal year ending March 31, 2009

Subsequent to September 30, 2008, the Company's Board of Directors declared a cash dividend of ¥4,351 million ($43,427 thousand) payable on December 5, 2008 to stockholders as of September 30, 2008.

Own share repurchase

On November 21, 2008, the Company's Board of Directors resolved to repurchase its own shares, pursuant to Article 459, Paragraph 1, Item 1 of the Company Law of Japan. This resolution is a part of efforts to ensure agile capital management highly responsive to the changing business environment. The details of the share repurchase are as follows:

1. Class of shares:	Common stock
2. Total number of shares to be repurchased:	Up to 5,000,000 shares (3.45% of total number of shares issued)
3. Total repurchase amount:	Up to 25 billion yen
4. Period of repurchase:	From November 25, 2008 to November 24, 2009

Closing of Optical Pickup Unit business

On December 19, 2008, Board of Directors of Nidec Sankyo Corporation, one of the Company's subsidiaries, resolved to discontinue its optical pickup business as of December 31, 2008, which has been accounted for as part of NIDEC's "Electronic and Optical Components" business. NIDEC is currently evaluating the impact from the closing on its consolidated financial position, results of operations or liquidity.

F-82

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

27. Quarterly Financial Data for the year ended March 31, 2008: (Unaudited)

		Yen in millions
		First Quarter		Second Quarter		Third Quarter		Forth Quarter		Total
Net sales		¥ 172,174		¥ 190,527		¥ 196,287		¥ 183,138		¥ 742,126
Operating expenses:
Cost of products sold		136,769		149,783		153,555		143,803		583,910
Selling, general and administrative expenses		12,711		14,234		12,147		12,191		51,283
Research and development expenses		7,588		7,540		7,511		7,461		30,100
		157,068		171,557		173,213		163,455		665,293
Operating income		15,106		18,970		23,074		19,683		76,833
Other income (expense):
Interest and dividend income		797		744		572		817		2,930
Interest expense		(706	)	(815	)	(380	)	(520	)	(2,421	)
Foreign exchange gain (loss), net		2,370		(4,112	)	(1,026	)	(11,342	)	(14,110	)
Gain (loss) from marketable securities, net		27		92		(2	)	337		454
Other, net		(763	)	(204	)	(92	)	56		(1,003	)
		1,725		(4,295	)	(928	)	(10,652	)	(14,150	)
Income before income taxes		16,831		14,675		22,146		9,031		62,683
Income taxes		(4,427	)	(3,796	)	(5,887	)	(1,374	)	(15,484	)
Income before minority interest and equity in earnings of affiliated companies		12,404		10,879		16,259		7,657		47,199
Minority interest in income of consolidated subsidiaries		1,263		1,638		2,331		850		6,082
Equity in net losses (income) of affiliated companies		25		(0	)	(18	)	(46	)	(39	)
Net income		¥ 11,116		¥ 9,241		¥ 13,946		¥ 6,853		¥ 41,156
Per share data:
Net income	－ basic	¥76.75		¥63.76		¥ 96.22		¥ 47.28		¥ 284.00
	－ diluted	¥ 74.63		¥ 62.04		¥ 93.62		¥ 46.01		¥ 276.29
Cash dividends		¥ 25.00		¥ 0.00		¥ 25.00		¥ 0.00		¥ 50.00

Earnings-per-share amounts for each quarter are computed independently. As a result, their sum may not equal the total year earnings-per-share amounts.

F-83

NIDEC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS－(Continued)

		U.S. dollars in thousands
		First Quarter		Second Quarter		Third Quarter		Forth Quarter		Total
Net sales		$ 1,718,475		$ 1,901,657		$ 1,959,147		$ 1,827,907		$ 7,407,186
Operating expenses:
Cost of products sold		1,365,096		1,494,990		1,532,638		1,435,303		5,828,027
Selling, general and administrative expenses		126,869		142,070		121,239		121,679		511,857
Research and development expenses		75,736		75,257		74,968		74,468		300,429
		1,567,701		1,712,317		1,728,845		1,631,450		6,640,313
Operating income		150,774		189,340		230,302		196,457		766,873
Other income (expense):
Interest and dividend income		7,955		7,425		5,709		8,155		29,244
Interest expense		(7,046	)	(8,135	)	(3,793	)	(5,190	)	(24,164	)
Foreign exchange gain (loss), net		23,655		(41,041	)	(10,241	)	(113,205	)	(140,832	)
Gain (loss) from marketable securities, net		269		918		(20	)	3,364		4,531
Other, net		(7,616	)	(2,036	)	(917	)	558		(10,011	)
		17,217		(42,869	)	(9,262	)	(106,318	)	(141,232	)
Income before income taxes		167,991		146,471		221,040		90,139		625,641
Income taxes		(44,186	)	(37,888	)	(58,758	)	(13,714	)	(154,546	)
Income before minority interest and equity in earnings of affiliated companies		123,805		108,583		162,282		76,425		471,095
Minority interest in income of consolidated subsidiaries		12,606		16,348		23,266		8,484		60,704
Equity in net losses (income) of affiliated companies		250		(0	)	(180	)	(459	)	(389	)
Net income		$ 110,949		$ 92,235		$ 139,196		$ 68,400		$ 410,780
Per share data:
Net income	－ basic	$ 0.77		$ 0.64		$ 0.96		$ 0.47		$ 2.83
	－ diluted	$ 0.74		$ 0.62		$ 0.93		$ 0.46		$ 2.76
Cash dividends		$ 0.25		$ 0.00		$ 0.25		$ 0.00		$ 0.50

Earnings-per-share amounts for each quarter are computed independently. As a result, their sum may not equal the total year earnings-per-share amounts.

F-84

EX-1

Exhibit 1.3

(Translation)

NIDEC CORPORATION

REGULATIONS OF THE BOARD OF DIRECTORS

(As amended on June 24, 2008)

(Purpose)

Article 1. The purpose of these regulations is to provide for the functions and powers of the board of directors of the company and the procedures for conducting its meeting and thereby to attain reasonable conduct of its meetings.

2. The matters relating to the board of directors shall be governed by these regulations as well as by laws, ordinances or the articles of incorporation.

(Treatment of doubts)

Article 2. Any doubt that may arise in connection with the administration of these regulations shall be dealt with by resolution of the board of directors.

(Composition)

Article 3. The board of directors shall be composed of all of the directors.  Statutory auditors have to be present and give their opinions at any meeting of the board of directors if need were.

(Time of holding meetings)

Article 4. The meetings of the board of directors shall consist of ordinary meetings and extraordinary meetings.

2. Ordinary meetings of the board of directors shall be held once every month and extraordinary meetings of the board of directors shall be held whenever the necessity arises.

3. The ordinary meetings of the board of directors mentioned in the preceding paragraph may be postponed or called off depending on the circumstances; provided, however, that such meetings shall not be called off consecutively for three months.

(Person having convening power)

Article 5. Each meeting of the board of directors shall be convened by the president. If the president is unable to act, another director shall act in his place in the order previously determined by the board of directors.

2. Any directors may request the convening of a meeting of the board of directors by presenting to the person having convening power mentioned in the preceding paragraph a document setting forth the matters to be considered and the reasons therefor.

(Convening procedure)

Article 6. Notice for convening a meeting under the preceding article shall be dispatched not later than three days prior to the date of the meeting; provided, however, that such period of notice may be shortened in case of urgency.

2. If consented to by all the directors and the statutory auditors, a meeting of the board of directors may be held without following the convening procedure.

(Chairman)

Article 7. Chairmanship of each meeting of the board of directors shall be assumed by the president. If the president is unable to act, another director shall act in his place in the order previously determined by the board of directors.

(Attendance by counselors, etc)

Article 8. If the board of directors deems it necessary, it may require the counselors and other persons to attend its meeting and give their reports or opinions.

(Method of adopting resolutions)

Article 9. Resolutions of the board of directors shall be adopted at its meeting at which a majority of the directors shall be present, by a majority of the directors so present.

2. Directors interested in any of the resolutions mentioned in the preceding paragraph can not participate in such resolution. In that case, the number of such directors shall not be counted in the number of directors present.

3. In cases where a director makes a proposal on a matter to be resolved in a meeting of the board of directors, if all directors who can join the resolution of the matter express their approval on the proposal in writing or by electromagnetic record, and if statutory auditors do not object to the proposal, the resolution of the proposal shall be regarded as approved.

(Matters to be submitted)

Article 10. The matters to be submitted to the board of directors for consideration shall be as follows;

1. Statutory matters:

(1) Establishment, removal or abolition of head office or branch offices.

(2) Decision on the convening of a general meeting of shareholders and the matters to be submitted thereto.

(3) Appointment and removal of representative directors and directors with specific titles.

(4) Approval of directors competitive transactions.

(5) Approval of transactions between directors and the company

(6) Decision on the matters relating to the issuance of shares, bonds, acquisition rights of shares and bonds with acquisition rights of shares.

(7) Decision on the matters relating to the capitalization of legal reserves and the issuance of shares for free distribution.

(8) Decision on the matters relating to dividends of surplus.

(9) Decision on the matters relating to a subdivision of shares.

(10) Selection, removal and change of a manager of the register of shareholders and its business office.

(11) Decision on the record date of the register of shareholders.

(12) Decision on the matters relating to purchase of own shares.

(13) Decision on the matters relating to dispose of own shares, purchase of own shares from subsidiaries and depreciation of own shares.

(14) Decision on the matters relating to decrease of number of shares (one unit) or to abolish the rule of number.

(15) Such other matter as the board of directors may deem important.

2. Important matters relating to business:

(1) Matters relating to the incorporation of affiliated companies.

(2) Matters relating to business cooperation or joint ventures with other companies.

(3) Decision on new projects (meaning those requiring amendment of the articles of incorporation and those requiring no such amendment but requiring investment of ¥100 million or more in each instance).

(4) Such other matters as the board of directors may deem necessary.

3. Matters relating to accounting:

(1) Approval of accounting documents and their accompanying detailed statements.

(2) Approval of proposed appropriation of profits or losses.

(3) Monthly financial report.

(4) Compilation and drafting of annual business plans.(statement income, balance sheet, manpower planning, cash flow planning, borrowed money planning)

(5) Establishment of borrowing limits and determination of borrowings over such limits.

(6) Establishment of limits to acquisition of securities, a acquisition, pledge, loans and disposition of securities above such limits.

(7) Acquisition, repair and disposition of fixed assets and important property worth ¥300 million in each instance.

(8) Making investment of ¥300 million or more in each instance.

(9) Lending of assets or making loans or giving guarantee or offering a mortgage of obligations worth ¥300 million or more in each instance.

(10) Borrowing or leasing of assets worth ¥300 million or more in each instance.

(11) Adjustment, release from obligations in respect of bad debts of ¥20 million or more in each instance.

(12) Such other matter as the board of directors may deem necessary.

4. Matters relating to personnel affairs:

(1) Selection of directors with specific titles.

(2) Appointment and removal of executive officers.

(3) Selection and removal of executive officers with specific titles.

(4) Such other matter as the board of directors may deem important.

5. Others:

(1) Institution and defense of legal actions of managerial importance, policies for settling such actions and selection of counsels.

(2) Making court settlement or withdrawal of suits of managerial importance, and settlement policies and settlement of disputes of managerial importance.

(3) Approval of establishment, amendment or repeal of important rules and regulations (e.g., the share handling regulations, the regulations of the board of directors, the executive officers regulations, the proposal processing regulations, company regulations concerning insider trading, the CSR regulations, compliance regulations, risk management regulations).

(4) Other matters provided for in laws, ordinances or the articles of incorporation and such other matter as the board of directors may deem important.

(Ratification)

Article 11. If there arises any matter which can not be submitted to the board of directors for consideration because it requires an urgent action or for any other unavoidable cause, representative directors may take such action as they may deem fit, notwithstanding the provisions of article 9. In that case, ratification of the board of directors must be sought at its next meeting.

(Reporting)

Article 12. The president shall report to the board of directors the state of execution of business of the company and other necessary matters at least once every three months;  provided, however, that depending on the case, the president may cause such report to be made by other directors in charge of the business in question.

2. A director who has made a competitive transaction or a transaction with the company shall report to the board of directors the important facts about such transaction without delay.

(Minutes)

Article 13. The proceedings in outline and the resultant actions taken at each meeting of the board of directors shall be recorded in minutes and the directors and statutory auditors present shall affix their names and seals thereto and such minutes shall be kept on file at the company permanently.

2.

If a matter is approved in writing in a meeting of the board of directors, the documents or electronic medium where the directors expressed their opinions on the matter shall be kept on file at the company for ten (10) years.

(Secretariat)

Article 14. The administrative affairs relating to the board of directors shall be under the charge of the manager of the general affairs department and the minutes shall be kept on file at the general affairs department.

(Amendment and repeal)

Article 15. Any amendment or repeal of these regulations shall be made by resolution of the board of directors.

EX-1

Exhibit 1.4

(Translation)

NIDEC CORPORATION

REGULATIONS OF THE BOARD OF STATUTOTY AUDITORS

(As amended on July 05, 2008)

(Purpose)

Article 1.

These Regulations prescribe matters concerning the board of statutory auditors based on laws, regulations and the articles of incorporation.

(Organization)

Article 2.

1.

The board of statutory auditors shall consist of all statutory auditors.

2.

The board of statutory auditors shall have full-time statutory auditors.

3.

In addition to the provision in the previous section, the board of statutory auditors shall have a chairperson of meetings of the board of statutory auditors.

(Purpose of the board of statutory auditors)

Article 3.

The board of statutory auditors shall receive reports on, deliberate or resolve important audit-related matters.  However, the board may not impede each statutory auditor from exercising his/her authority.

(Duties of the board of statutory auditors)

Article 4.

The board of statutory auditors shall perform the following duties.  However, any decision based on Section 3 of this Article may not impede each statutory auditor from exercising his/her authority.

1.

Write auditors’ reports.

2.

Select and dismiss full-time auditors.

3.

Decide on matters concerning auditing policy and work, and matters on statutory auditors’ duties including how to investigate the financial status.

(Select and dismiss full-time statutory auditors)

Article 5.

From statutory auditors, the board of statutory auditors shall select full-time auditors or dismiss them based on its resolution.

(Chairperson)

Article 6.

1.

Based on its resolution, the board of statutory auditors shall decide a chairperson from statutory auditors.

2.

In addition to the duties prescribed in Section 1 of Article 8, the chairperson of the board of statutory auditors shall perform duties delegated by the board of statutory auditors.  However, the chairperson may not impede each statutory auditor from exercising his/her authority.

(Convene a meeting of the board of statutory auditors)

Article 7.

The board of statutory auditors shall convene a regular meeting of the board of statutory auditors monthly.  However, if necessary, the board may convene the meeting when it so wishes.

(Personnel authorized to summon a meeting of the board of statutory auditors)

Article 8.

1.

The chairperson shall summon and run the meeting of the board of statutory auditors.

2.

Each statutory auditor may request the chairperson to summon a meeting of the board of statutory auditors.

3.

If the chairperson does not summon a meeting of the board of statutory auditors despite such a request described in the previous section, the statutory auditor who has made the request may summon and run the meeting by himself/herself.

(Procedure to summon a meeting of the board of statutory auditors)

Article 9.

1.

To summon a meeting of the board of statutory auditors, a notice thereof shall be sent to each statutory auditor by three (3) days before the date of the meeting.

2.

The board of statutory auditors may skip the procedure to summon a meeting of the board of statutory auditors and convene the meeting if all statutory auditors so agree.

(How to reach resolutions)

Article 10.

1.

The board of statutory auditors shall resolve matters with the approval of the majority of the statutory auditors.

2.

Resolution shall be reached after deliberation based on sufficient information.

(Resolution on auditing policy, etc.)

Article 11.

1.

Policies, plans, methods, duty sharing and other relevant matters concerning audits shall be developed after resolutions are reached in the meeting of the board of statutory auditors.

2.

In addition to the matters above, the board of statutory auditors shall resolve matters, including budget for auditing cost, which statutory auditors deem necessary to perform their duties.

3.

The board of statutory auditors shall resolve the following systems, and request board members to improve them.

i.

Matters concerning assisting personnel for statutory auditors’ duties.

ii.

Matters concerning the aforementioned assisting personnel’s independence from board members and executive officers (vice presidents).

iii.

Reporting systems to statutory auditors including a system for board members, executive officers (vice presidents) and assisting personnel to report to statutory auditors.

iv.

In addition to the above systems, reporting systems to ensure effective audits by statutory auditors.

(Regular meeting with representative directors, etc.)

Article 12.

1.

The board of statutory auditors shall have a regular meeting with representative directors to promote mutual understanding with them by exchanging opinions on the Company’s issues, status on improving the auditing environment for auditors, important auditing issues, etc., and by making necessary requests to the representative directors.

2.

As necessary, the board of statutory auditors shall explain to representative directors and the board of directors the auditing policy, the auditing plan, and the statuses and results of audits.

3.

In addition to statutory matters, the board of statutory auditors, based on No. 3 of Section 3 of the previous article, shall deliberate with board members, decide, and receive reports on matters that board members, executive officers (vice presidents) and assisting personnel should report to the board of statutory auditors.

(Report to the board of statutory auditors)

Article 13.

1.

Statutory auditors shall report the status of the performance of their duties to the board of statutory auditors regularly and as necessary, and shall report such information whenever requested by the board of statutory auditors.

2.

If reported by any of accounting auditors, board members, executive officers (vice presidents), an internal auditing department’s or other departments’ assisting personnel, or any other personnel, statutory auditors shall report the matter to the board of statutory auditors.

3.

As necessary, the board of statutory auditors shall request accounting auditors, board members, executive officers (vice presidents), an internal auditing department’s or other departments’ assisting personnel, or any other personnel to report to it.

4.

In the aforementioned case (in Section 3), if any of statutory auditors, accounting auditors, board members, executive officers (vice presidents), an internal auditing department or other departments’ assisting personnel, or any other personnel reports to all statutory auditors a matter that should be reported to the board of statutory auditors, such a matter shall not have to be reported to the board of statutory auditors.

(Actions to reports)

Article 14.

When the board of statutory auditors receives any of the following reports, it shall investigate such a reported case as necessary, and take appropriate measures, depending on the circumstance.

1.

Reports on the discovery of a fact that could damage the Company significantly

2.

Reports on the discovery of materially improper performance by any of board members and executive officers (vice presidents) in executing their duties, or the discovery of a grave fact on a violation of laws, regulations or the articles of incorporation

3.

Reports on matters decided after being deliberated with board members in advance

(Write auditors’ reports)

Article 15.

1.

The board of statutory auditors shall receive financial reports and other documents from board members, and auditors’ reports and other documents from accounting auditors.  In principle, full-time statutory auditors shall receive these documents and other materials (including electromagnetic records).

2.

Based on an auditors’ report written by each statutory auditor, and after deliberating such reports, the board of statutory auditors shall write its auditors’ report.

3.

If any difference exists between the auditors’ report written by the board of statutory auditors and the auditors’ report written by individual statutory auditors, and if requested by those statutory auditors, the board of statutory auditors shall attach the auditors’ reports written by the statutory auditors to the auditors’ report written by the board of statutory auditors.

4.

Auditors’ reports written by the board of statutory auditors shall be either signed, or signed and affixed (manually or electronically) by each statutory auditor.  Full-time and outside statutory auditors shall either write down or record such information.

5.

If the Company writes either an extraordinary financial report or a consolidated financial report, it shall be used to satisfy the aforementioned regulation (in Section 4).

6.

The board of statutory auditors shall submit the aforementioned auditors’ report to board members, and shall send accounting auditors duplicated copies thereof.

(Agreement, etc. on selecting statutory auditors)

Article 16.

1.

The following matters concerning selecting statutory auditors shall be based on the resolution of the board of statutory auditors.

i.

Approval to submit an agenda on selecting a statutory auditor to the shareholders’ meeting

ii.

Request to make selecting a statutory auditor a purpose to convene a shareholders’ meeting

iii.

Request to submit an agenda on selecting a statutory auditor to a shareholders’ meeting

2.

The previous section shall apply when selecting an alternate auditor.

(Agreement, etc. on selecting account auditors)

Article 17.

1.

The following matters concerning selecting, dismissing or not reappointing accounting auditors shall be resolved in the board of statutory auditors.

i.

Approval to submit an agenda on selecting an accounting auditor to a shareholders’ meeting

ii.

Approval to make dismissing or not reappointing an accounting auditor a purpose to convene a shareholders’ meeting

iii.

Request to submit an agenda on selecting an accounting auditor to a shareholders’ meeting

iv.

Request to make selecting, dismissing or not reappointing an accounting auditor a purpose to convene a shareholders’ meeting

v.

Selecting personnel to perform a statutory auditor’s duties temporarily if there is any vacancy.

2.

All statutory auditors’ approvals to dismiss an accounting auditor based on statutory grounds for dismissal may be obtained after resolution by the board of statutory auditors.  In such a case, the statutory auditor designated by the board of statutory auditors shall report the dismissal and its reasons in the first shareholders’ meeting after the dismissal.

3.

If any of the approvals in the previous section needs to be obtained urgently, it may be so done in writing or by electromagnetic record.

(Approval on statutory auditors’ remunerations)

Article 18.

Approval on remunerations for personnel who perform the duties of accounting auditors or temporary accounting auditors shall be resolved by the board of statutory auditors.

(Approval on partial exemption of board members’ responsibilities)

Article 19.

1.

The following approvals by all statutory auditors may be obtained after resolution by the board of statutory auditors.

i.

Approval to submit an agenda on partial exemption of board members’ responsibilities to a shareholders’ meeting

ii.

Approval to submit to a shareholders’ meeting an agenda on amending the articles of incorporation to partially exempt board members’ responsibilities

iii.

Approval to submit an agenda on partial exemption of board members’ responsibilities to a shareholders’ meeting based on provisions in the articles of incorporation

iv.

Approval to submit to a shareholders’ meeting an agenda on amending the articles of incorporation to conclude a contract with outside board members on partial exemption of board members’ responsibilities

2.

If any of the above approvals needs to be obtained urgently, it may be so done in writing or by electromagnetic record.

(Deliberation on statutory auditors’ exercising their authority)

Article 20.

1.

If statutory auditors exercise their authority or obligation on any of the following matters, they may resolve the matter in a meeting of the board of statutory auditors in advance.

i.

Explanation in response to shareholders’ questions in writing before a shareholders’ meeting

ii.

Report to the board of directors, and request to summon a meeting of the board of directors, etc.

iii.

Investigation result on agendas, documents and other materials to be submitted to a shareholders’ meeting

iv.

Injunction to stop a board member’s acts outside the Company’s scope of purposes or acts against laws, regulations or the articles of incorporation

v.

Statement in a shareholders’ meeting on selecting, dismissing, resignation of, and remuneration of statutory auditors

vi.

Matters on lawsuits between the Company and board members

vii.

Matters on filing lawsuits, etc.

(Resolution on remunerations, etc.)

Article 21.

Statutory auditors’ remunerations, etc. may be resolved in meetings of statutory auditors if all statutory auditors so agree.

(Minutes of meetings)
Article 22.

1.

The board of statutory auditors shall take minutes of meetings including the following matters, and all statutory auditors who attended such meetings shall either sign, or sign and affix their seal (manually or electronically) on the minutes.

i.

The date and the place of the meeting (This information shall include how any of statutory auditors, board members, executive officers (vice presidents) or accounting auditors who were not physically present in the meeting participated therein.)

ii.

How issues were discussed and the result thereof

iii.

Description of opinions and summary of statements if any of them were given on the following matters in a meeting of the board of statutory auditors

a.

Report by any of board members or executive officers (vice presidents) who discovered a fact that could damage the Company significantly

b.

Report by an accounting auditor on the discovery of improper performance of any of board members or executive officers (vice presidents) in executing their duties, or the discovery of a grave fact on a violation of laws, regulations or the articles of incorporation

iv.

Names or appellations of board members, executive officers (vice presidents) or accounting auditors who attended the meeting of the board of statutory auditors

v.

The name of the chairperson of the meeting of the board of statutory auditors

2.

If a report is decided not to have to be submitted to the board of statutory auditors based on the provision in Section 4 of Article 13, minutes including the following information shall be taken.

i.

Information on matters decided not to have to be reported to the board of statutory auditors

ii.

The day when such information was decided not to have to be reported to the board of statutory auditors

iii.

Appointing a statutory auditor who performed duties concerning taking minutes

3.

The Company shall keep the minutes in the previous section (Section 2) at its head office for ten (10) years.

(Secretariat for meetings of the board of statutory auditors)

Article 23.

Statutory auditors’ assisting personnel, such as audit staff, shall perform administrative work related to running a meeting of the board of statutory auditors, including summoning the meeting and taking minutes thereof.

(Statutory auditors’ auditing standard)

Article 24.

Matters concerning audits by the board of statutory auditors and statutory auditors shall be handled based on laws, regulations, or provisions in these Regulations, and on statutory auditors’ auditing standard prescribed in the meetings of the board of statutory auditors.

(Revise and eliminate these Regulations)

The board of statutory auditors shall revise and eliminate these Regulations.

(Supplementary provision)

These Regulations shall become effective as of July 05, 2008.

EX-1

Exhibit 8.1

Subsidiaries of the registrant

No.	Company name in English	Jurisdiction of Incorporation
1	Nidec America Corporation	U.S.A
2	Nidec Electronics GmbH	Germany
3	Nidec Electronics (Thailand) Co., Ltd.	Thailand
4	Nidec Precision (Thailand) Co., Ltd.	Thailand
5	Nidec Hi-Tech Motor (Thailand) Co., Ltd.	Thailand
6	Nidec (Dalian) Limited	China
7	Nidec Taiwan Corporation	Taiwan
8	Nidec Singapore Pte. Ltd.	Singapore
9	P.T. Nidec Indonesia	Indonesia
10	Nidec (H.K.) Co., Ltd.	Hong Kong
11	Nidec Philippines Corporation	Philippines
12	Nidec Precision Philippines Corporation	Philippines
13	Nidec Subic Philippines Corporation	Philippines
14	Nidec Korea Corporation	Korea
15	Nidec-Kyori Corporation	Japan
16	Nidec-Kyori (Shanghai) Machinery Corporation	China
17	Nidec Machinery Corporation	Japan
18	Nidec Machinery (Thailand) Co., Ltd.	Thailand
19	Nidec Total Service Corporation	Japan
20	Nidec Total Service (Zhejiang) Corporation	China
21	Nidec Nemicon Corporation	Japan
22	Nidec Power Motor Corporation	Japan
23	Nidec Seiko Corporation	Japan
24	Nidec Power Motor (Shanghai) International Trading Co., Ltd.	China
25	Nidec Power Motor (Zhejiang) Co., Ltd.	China
26	Nidec-Shimpo Corporation	Japan
27	Nidec-Read Corporation	Japan
28	Nidec-Read Taiwan Corporation	Taiwan
29	Nidec-Read Korea Corporation	Korea
30	Nidec-Shimpo America Corporation	U.S.A
31	Shimpo Drives Incorporation	U.S.A
32	Nidec-Shimpo Philippines Corporation	Philippines
33	Nidec -Shimpo (Shanghai) International Trading Co., Ltd.	China
34	Nidec-Shimpo (Zhejiang) Corporation	China
35	Nidec-Shimpo (H.K.) Co., Ltd.	Hong Kong
36	Nidec Tosok Corporation	Japan
37	Nidec Tosok (Vietnam) Co., Ltd.	Vietnam
38	Nidec Tosok (Shanghai) Co., Ltd.	China
39	Nidec Copal Corporation	Japan
40	Nidec Copal Philippines Corporation	Philippines
41	Nidec Copal (Vietnam) Co., Ltd.	Vietnam
42	Nidec Copal (Malaysia) Sdn. Bhd.	Malaysia
43	Nidec Copal Precision Parts Corporation	Japan
44	Nidec Copal (Thailand) Co., Ltd.	Thailand
45	Copal Optical and Electronic Machinery (Shanghai) Co., Ltd.	China
46	Nidec Copal (U.S.A) Corporation	U.S.A
47	Nidec Copal Hong Kong Co., Ltd.	Hong Kong
48	Nidec Copal (Zhejiang) Co., Ltd.	China
49	Nidec Copal Electronics Corporation	Japan
50	Nidec Copal Electronics, Inc.	U.S.A
51	Nidec Copal Electronics GmbH	Germany
52	Globa Service Inc.	Japan
53	Globa Sales Co., Ltd.	Japan
54	Kansai Globa Sales Co., Ltd.	Japan
55	Nidec Copal Electronics (Shanghai) Co., Ltd.	China
56	Nidec Copal Electronics (Korea) Co.,Ltd.	Korea
57	Nidec Copal Electronics (Zhejiang) Co., Ltd.	China
58	Nidec Copal Electronics Singapore Pte. Ltd.	Singapore
59	Fujisoku Corporation	Japan
60	Nidec Shibaura Corporation	Japan
61	Nidec Shibaura (Zhejiang) Co., Ltd.	China
62	Nidec Shibaura Electronics (Thailand) Co., Ltd.	Thailand
63	Nidec Shibaura (H.K.) Limited	Hong Kong
64	Nidec Steel Products (Zhejiang) Co., Ltd.	China
65	Nidec System Engineering (Zhejiang) Corporation	China
66	Nidec (Zhejiang) Corporation	China
67	Nidec (Dongguan) Limited	China
68	Nidec Automobile Motor (Zhejiang) Corporation	China
69	Nidec (New Territories) Co., Ltd.	China
70	Nidec (Shanghai) International Trading Co., Ltd.	China
71	Nidec Vietnam Corporation	Vietnam
72	Nidec Sankyo Corporation	Japan
73	Nidec Logistics Corporation	Japan
74	Nidec Logistics Consulting (Pinghu) Corporation	China
75	Nidec Logistics Singapore Pte. Ltd.	Singapore
76	Nidec Sankyo Service engineering Corporation	Japan
77	Nidec Sankyo Shoji Corporation	Japan
78	Nidec Sankyo America Corporation	U.S.A
79	Nidec Sankyo Taiwan Corporation	Taiwan
80	Nidec Sankyo Singapore Pte. Ltd.	Singapore
81	Nidec Sankyo (Zhejiang) Corporation	China
82	Nidec Sankyo Vietnam Corporation	Vietnam
83	Nidec Sankyo (Fuzhou) Corporation	China
84	Nidec Sankyo Fuzhou (H.K.) Co., Ltd.	Hong Kong
85	Nidec Sankyo Electronics (Shanghai) Corporation	China
86	Nidec Sankyo (H.K.) Co., Ltd.	Hong Kong
87	Nidec Sankyo Electronics (Shaoguan) Co., Ltd.	China
88	Nidec Sankyo Electronics (Shenzhen) Corporation	China
89	Nidec Sankyo Europe GmbH	Germany
90	Nidec Nissin Corporation	Japan
91	Nidec Nissin Tohoku Corporation	Japan
92	Nidec Nissin (H.K.) Co., Ltd.	Hong Kong
93	Nidec Nissin (Dongguan) Corporation	China
94	Nidec Nissin Vietnam Corporation	Vietnam
95	P.T. Nidec Nissin Indonesia	Indonesia
96	Nidec Nissin (Dalian) Corporation	China
97	Nidec Pigeon Corporation	Japan
98	Nidec Pigeon (H.K.) Co., Ltd.	Hong Kong
99	Nidec Motors & Actuators	France
100	Nidec Motors & Actuators (Germany) GmbH	Germany
101	NMA Property Verwaltungsgesellschaft mbH	Germany
102	Nidec Motors & Actuators (Poland) Sp.Z o.o.	Poland
103	Nidec Motors & Actuators (Spain) S.A.	Spain
104	Nidec Motors & Actuators (USA)） INC.	U.S.A
105	Nidec Motors & Actuators （Mexico) S. de R.L. de C.V.	Mexico
106	Nidec Brilliant Co., Ltd.	Singapore
107	Nidec BMS Pte. Ltd.	Singapore
108	BG Casting Pte. Ltd.	Singapore
109	Nidec Legend Pte. Ltd.	Singapore
110	PT Brilliant Precision	Indonesia
111	PT Pacific Coatings Batam	Indonesia
112	Nidec Brilliant (Thailand) Co., Ltd.	Thailand
113	Nidec Brilliant Precision (Thailand) Co., Ltd.	Thailand
114	Nidec Brilliant (Suzhou) Co., Ltd.	China
115	Brilliant Technology (Suzhou) Co., Ltd.	China
116	Nidec BMS (Suzhou) Co., Ltd.	China
117	Brilliant Magnesium Pte. Ltd.	Singapore
118	Brilliant Precision Manufacturing Sdn. Bhd.	Malaysia
119	Taima Casting Sdn. Bhd.	Malaysia
120	Japan Servo Co.,Ltd.	Japan
121	Servo Techno System Co.,Ltd.	Japan
122	Japan Servo Motors Singapore Pte,Ltd	Singapore
123	PT.Japan Servo Batam	Thailand
124	Japan Servo USA Inc.	U.S.A
125	Japan Servo (Hong Kong) Limited	Hong Kong
126	Changzhou Servo Motors Co.,Ltd.	China
127	Japan Servo Europe GmbH	Germany
128	Nidec Servo Vietnam Corporation	Vietnam

EX-1

Exhibit 11.1

(Translation)

NIDEC CORPORATION

Code of Ethics

Compliance Rules

(As amended on April 15, 2008)

Chapter I: General Provisions

Article 1 (Purpose)

These Compliance Rules (these “Rules”) set forth the basic principles, structure and operation of a compliance system that, through continuous review and improvement, is designed to promote the proper conduct of our business in accordance with applicable laws and regulations.

Article 2 (Scope of Application)

These Rules shall apply to Nidec Corporation (the “Company”).  However, these Rules shall not be prevented from being applied to the Company’s affiliated companies as necessary.

Article 3 (Definition of Compliance)

As used herein, “Compliance” refers to a comprehensive management system that is designed to establish corporate integrity, earn the respect of the communities in which we do business and raise ethical awareness among our directors, officers and employees by promoting the observance of laws, regulations, company rules and ethical conduct.

Chapter II: Structure

Article 4 (The Board of Directors)

The Board of Directors shall decide basic matters relating to Compliance.

Article 5 (The Compliance Committee)

5.1.

A Compliance Committee (the “Committee”) shall be established with the board member in charge of the Compliance Office as its chairman. The Committee shall establish a basic Compliance policy, and supervise the progress of the Company’s status on compliance.

5.2.

The members of the Committee shall be those of the Managing Directors’ Meeting.

Article 6 (The Compliance Office)

The Committee shall have a Compliance Office (the “Office”) that shall serve as secretariat.  The Office shall be responsible for vigorously enforcing Compliance by planning and proposing policies concerning Compliance and providing each business division with guidance and support.

Article 7 (Compliance Officer)

7.1. Each business unit general manager, division general manager or other person separately appointed by the Committee (each, a “Compliance Officer”) shall be accountable to the Committee concerning Compliance matters within his or her area of jurisdiction.

7.2. The Compliance Officer, in response to compliance-related needs within the range of his/her business operations, shall handle issues properly with the Compliance Office’s support.

Article 8 (Special Rules Regarding Public Relations)

If the Office decides that a particular Compliance matter may affect public relations, it shall report the matter as soon as possible to the manager of the Public Relations & Advertisement Division and the manager of the Investor Relations Division.

Chapter III: Code of Ethics

Article 9 (Code of Ethics)

9.1. The Company’s executives and regular employees shall:

a) Promote honest and ethical conduct, including the ethical handling of conflicts of interest,

b) Promote full, fair, accurate, timely and understandable disclosure,

c) Promote compliance with applicable laws and governmental rules and regulations, and

d) Deter wrongdoing.

9.2. The Company’s executives and regular employees shall owe a duty to the Company to act with integrity.  Integrity requires, among other things, being honest and candid.  Deceit and subordination of principle are inconsistent with integrity.

9.3. The Company’s executives and regular employees shall:

a) Act with integrity, including being honest and candid while still maintaining the confidentiality of information where required or consistent with the Company’s policies,

b) Observe both the form and spirit of laws and governmental rules and regulations, accounting standards and Company policies, and

c) Adhere to a high standard of business ethics.

Article 10 (Conflicts of Interest and Corporate Opportunities)

10.1. The Company’s executives and regular employees shall refrain from conduct that conflicts with the interests of the Company and subordinate their personal interests to those of the Company.  A “conflict of interest” can arise when any of the Company’s executives and regular employees takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively.  Before taking any action that might conflict with or compete against the interests of the Company, directors shall obtain prior approval from the Board of Directors in accordance with Articles 356-1 and 365 of the Company Law of Japan.

10.2. Some clear conflict of interest situations that should always be approved by the Board of Directors, if material, include the following.  It shall be remembered that any case that has a conflict of interest to any of the Company’s executives and regular employees also has a conflict of interest to his/her family member(s).

a) Any significant ownership interest in any supplier or customer;

b) Any consulting or employment relationship with any customer, supplier or competitor;

c) Any outside business activity that detracts from an individual’s ability to devote appropriate time and attention to his or her responsibilities with the Company;

d) The receipt of non-nominal gifts or excessive entertainment from any company with which the Company has current or prospective business dealings;

e) Being in the position of supervising, reviewing or having any influence on the job evaluation, pay or benefit of any immediate family member; and

f) Selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable officers or directors are permitted to so purchase or sell.

Anything that would present a conflict for a Covered Person would likely also present a conflict if related to a member of his or her family.

10.3. When the Company’s executives and regular employees are uncertain as to whether their or others conduct might conflict with the Company’s interests, they shall consult with and/or report to the Office.

Article 11 (Disclosure Controls and Procedures)

11.1. The Company’s executives and regular employees shall be familiar with and comply with the Company’s Disclosure Controls and Procedures applicable to him/her, so that the Company’s subject reports and documents filed with the Securities and Exchange Commission (the “SEC”) comply in all material respects with the applicable federal securities laws and SEC rules.

11.2. The Company’s executives and regular employees having direct or supervisory authority regarding these SEC filings or the Company’s other public communications concerning its general business, results, financial condition and prospects shall, to the extent appropriate within his or her area of responsibility, consult with other Company officers and employees and take other appropriate steps regarding these disclosures with the goal of making full, fair, accurate, timely and understandable disclosure.

11.3. The Company’s executives and regular employees shall:

a) Familiarize himself or herself with the disclosure requirements applicable to the Company as well as the business and financial operations of the Company,

b) Not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company’s independent auditors, governmental regulators and self-regulatory organizations.

c) Properly review and critically analyze proposed disclosure for accuracy and completeness (or, where appropriate, delegate this task to others).

Article 12 (Confidentiality)

The Company’s executives and regular employees shall maintain the confidentiality of undisclosed material information concerning to the Company, affiliated companies, customers, joint venture partners and other such parties that, if disclosed, would harm the Company or such other entities.

Article 13 (Prohibition of Unfair Transactions)

13.1. The Company does not seek competitive advantage through unlawful or unethical business practices.

13.2. The Company’s executives and regular employees shall endeavor to deal fairly with customers, competitors and other parties with whom they deal during the course of business, and shall refrain from engaging in unfair transactions or acts, such as price or market manipulation, concealing facts, taking advantage of information that they become aware of based on their position, miscommunication of material information and similar such acts.

Article 14 (Protection and Proper Use of the Company’s Assets)

The Company’s executives and regular employees shall protect the Company’s assets and ensure their efficient use.  All Company’s assets shall be used only for legitimate business purposes.

Article 15 (Compliance with Laws)

15.1. The Company’s executives and regular employees shall observe all laws and regulations applicable to the Company’s business.

15.2. The Company’s executives and regular employees shall exercise sufficient care with respect to investments in securities so that they do not violate insider-trading laws and so that they comply with the Financial Instruments and Exchange Law and Company rules.  The Company’s executives and regular employees shall consult with and/or report to the Office if they do not understand applicable laws or regulations or if they have any doubts regarding their application.

Article 16 (Responsibility to Report Noncompliance)

If any of the Company’s executives and regular employees violate any Compliance rules, are compelled to violate any Compliance rules or become aware of a violation of Compliance rules by a third party, they shall report such violation to the Office. In such case, the Company shall do everything possible to maintain the confidentiality of the report, the name of the person making the report and related matters.  Also, the Company shall not retaliate against or cause disadvantage to a reporting person.

Article 17 (Waivers of this Code of Ethics)

17.1. From time to time, the Company may waive some provisions of this Code of Ethics.  Any Company’s executives and regular employees who believe that a waiver may be called for shall contact the Office.

17.2.Any changes to or waiver of this Code of Ethics for directors of the Company shall, to the extent required, be promptly disclosed as provided by SEC rules.

Chapter IV: Policy and Planning

Article 18 (Compliance Enforcement)

The Committee shall at the start of the fiscal year prepare and submit a basic plan concerning Compliance to the Board of Directors for their approval.  

Article 19 (Compliance Training)

The Personnel Division shall consider ways to improve Compliance awareness when it designs training programs for the Company’s executives and regular employees.

Chapter V: Follow up

Article 20 (Compliance Audit)

Corporate Administration & Internal Audit Department shall provide appropriate instruction and supervision as it deems necessary.

Article 21 (Revision)

Any revision of these Rules shall be made by resolution of the Board of Directors.

EX-1

Exhibit 12.1

CERTIFICATION

I, Shigenobu Nagamori, certify that:

1.  I have reviewed this annual report on Form 20-F/A of Nidec Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.  The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.  The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:  December 24, 2008

/s/   Shigenobu Nagamori

Shigenobu Nagamori

President, Chief Executive Officer and Representative Director

EX-1

Exhibit 12.2

CERTIFICATION

I, Yasunobu Toriyama, certify that:

1.  I have reviewed this annual report on Form 20-F/A of Nidec Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.  The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.  The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: December 24, 2008

/s/   Yasunobu Toriyama

Yasunobu Toriyama

Executive Vice President, Chief Financial and Accounting Officer and Director

EX-1

Exhibit 13.1

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Nidec Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that the Company’s annual report on Form 20-F/A for the year ended March 31, 2008 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  December 24, 2008

/s/   Shibenobu Nagamori

Shigenobu Nagamori

President, Chief Executive Officer and Representative Director

EX-1

Exhibit 13.2

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Nidec Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that the Company’s annual report on Form 20-F/A for the year ended March 31, 2008 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  December 24, 2008

/s/   Yasunobu Toriyama

Yasunobu Toriyama

Executive Vice President, Chief Financial and Accounting Officer and Director