Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Sales	217,692	204,053	6.7	-Sales volumes recovered, especially in Japan, with the end of the negative impact on business that was caused by the Great East Japan Earthquake and the flooding in Thailand. However, financial performance was dampened by the drop in new-vehicle sales at its major customers in China, Japanese OEMs.
Operating income	6,120	7,582	(19.3)	-Income decreased year-on-year because of lower sales in China, expenses incurred with the launch of a new subsidiary in Mexico, and changes in the sales structure in Japan.
Ordinary income	9,326	10,156	(8.2)	-
Net income	5,593	6,358	(12.0)	-

Joint Ventures

-The Company announced that it would establish a new company in Selangor, Malaysia through a joint investment with a local seat manufacturer, Auto Parts Holdings Sdn. Bhd. The Company's first Malaysian plant will produce automotive seats for 40,000 vehicles a year, starting in the second half of 2014. The seats will be supplied to the plants of Japanese automakers. The joint venture will be called APM Tachi-S Seating Systems Sdn. Bhd. Production operations will be initially outsourced to Auto Parts Holdings, to which the Company is licensing-out technologies. APM Tachi-S Seating Systems will be capitalized at 3.5 million RM, of which 40 percent will be provided by Tachi-S Thailand Co., Ltd. and 60 percent by Auto Parts Holdings. The capital composition is planned to be adjusted when the factory is completed. Sales are expected to reach 3.2 billion yen by FY2015. (From an article in the Nikkan Jidosha Shimbun on Jan. 31, 2013)

-The Company is going to establish a new automotive seating plant in Dalian City, Liaoning Province, China through a joint project with Lear Dongfeng Automotive Seating Co., Ltd. (headquarters: Wuhan City, Hubei Province), a Chinese joint venture of Lear Corporation. The plant is expected to have the capacity to produce seats for approximately 200,000 vehicles a year. Construction work will begin in 2013 based on a plan to supply seats for about 100,000 vehicles a year initially to Nissan Motor's new joint-venture facility that will commence production in 2014. In the area of seat business for Nissan vehicles built outside Japan, the Company has already been in partnership with Lear, a major seat supplier based in the U.S. By bolstering its relationship with the global supplier, the company aims to enhance its support to Nissan, which is stepping up production in China. (From an article in the Nikkan Jidosha Shimbun on Feb. 13, 2013)

Investment Activities

- The Company announced on that it will make an additional investment of USD 8.5 million (approximately 850 million yen) in its Indonesian subsidiary, PT. Tachi-S Indonesia. The company is going to appropriate the fund in a new plant and equipment in order to start mass-production of automotive seats in November 2014. As a result of this capital injection, the subsidiary's capital will be increased to USD 15.25 million (approximately 1.52 billion yen). (From an article in the Nikkan Jidosha Shimbun on Jun 3, 2013)

- The Company announced that it will make an additional investment of 314 million pesos (approximately 1.9 billion yen) in its Mexican subsidiary, Setex Automotive Mexico S.A. de C.V., in April 2013. As a result of this capital increase, the subsidiary is going to expand its capacity to produce automotive seats, demand for which is projected to outstrip the originally expected level. This will allow the Company to establish an efficient local supply system to meet Japanese automakers' demand promptly. Setex Automotive Mexico, initially capitalized at 50,000 pesos (approximately 300,000 yen), will ensure a production capacity of 280,000 units a year by fiscal year 2017. (From an article in the Nikkan Jidosha Shimbun on Apr. 20, 2013)

- The Company is going to double the production capacity at its Wuhan Plant in Hubei, China to seats for 200,000 vehicles a year by the summer of 2013. The expansion plan is based on a new program the company won from Dongfeng Honda Automobile (Wuhan) for its new vehicle models. Taking advantage of this additional business opportunity with the customer, the Japanese major seat manufacturer is poised to enhance its supply structure in China and expand sales to the Honda Group. Up until now, The Company's Chinese plants have been making seats mainly for Nissan vehicles. The Group is now looking to enhance its presence in China further by stepping up business with Honda as well. (From an article in the Nikkan Jidosha Shimbun on Jan. 24, 2013)

Raising Capital

- The Company announced its plan to obtain up to approximately 5.1 billion yen by an issuance of new shares and disposal of its own shares. This fund increase will be applied to capital expenditures for its subsidiaries in ASEAN and China as well as for expanding development functions at its UK subsidiary. The company will issue approximately 1 million new shares through a public offering and up to 400,000 shares by a third party allotment. In addition, 2.18 million of its own shares are to be disposed of. The Company is going to appropriate the funds to its subsidiaries, including: Zhejiang Jee Ju Tai Automotive Seat Co., Ltd. (Zhejiang Province, China), Tacle Seating Thailand Co., Ltd. (Thailand), and Tachi-S Engineering Europe S.A.R.L. (France). (From a press release on November 30, 2012)

Outlook for FY ending Mar. 31, 2014

(in millions of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	203,000	217,692	(6.7)
Operating income	5,200	6,120	(15.0)
Ordinary income	7,400	9,326	(20.7)
Net income	4,000	5,593	(28.5)

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	4,026	3,418	2,695

-The Company's planned expects R&D expenditure for FY ending Mar. 31, 2014 is 3,612 million yen.

R&D Facilities

Tachi-S Technology Center	Ome City, Tokyo
Tachi-S Technology Center Aichi	Anjo City, Aichi Pref.
Tachi-S Engineering U.S.A. Inc.	Michigan, USA
Tachi-S Engineering Europe S.A.R.L.	Velizy-Villacoublay, France
Tachi-S Engineering China Co., Ltd.	Fuzhou, China
Tachi-S Engineering Latin America S.A. DE C.V.	Aguascalientes, Mexico
Tachi-S Engineering Vietnam Co., Ltd.	Ho Chi Minh, Vietnam

R&D Structure

-The Company, in order to conduct effective and efficient R&D activities, has positioned its technical center in Japan as the main function accountable for product development and fundamental technology. In addition, however, the Company works with its operations in the U.S.A. and Europe, and with technical-licensing and partner companies, in order to gather information on the latest technologies and peripheral technologies. Also, the Company makes sales presentations to global OEMs and parts suppliers about its wealth of technology on new products and new production methods. Currently, some of these technologies are being used by customers.

-The Company formed two commercial alliances, the first one with Fuji Kiko (in August 1999) and the second with Kasai Kogyo (in November 2006). These alliances are designed to improve its R&D capabilities in the areas of structural products and plastic molded parts, with the idea of jointly using each other's R&D functions outside Japan.

-Based on its decision to consolidate all the functions directly involved with product creation, namely development, production, and purchasing, the Company opened its R&D/Product Creation Center in August 2012 in Ome City, Tokyo.

-In May 2012, the Company established Tachi-S Engineering Latin America, S.A. De C.V. in Aguascalientes, Mexico, as its technical center responsible for the Central and South American regions.

-The Company plans to increase research and development staffs from 600 to 800 by FY ending Mar. 31, 2016.

R&D Activities

Developing Seats and Proprietary Structural Parts
-The Company develops the following products as seat-systems: seats for cars and other types of vehicles, recliner devices, slide rails, large-size movable lifters, underfloor storage devices, long slide-rails for RVs (and related peripheral parts), rotary units, and other items. It is working to win customers.

Developing Enhanced Safety Technology
-As a means to enhancing occupant safety, the Company develops the following items as seat systems, which are already being installed: seats with three seatbelts, seats with side airbags, occupant sensing seats with smart airbags, and seats that mitigate neck injuries. In addition, the Company conducts R&D activities on the structural nature of safety seats in terms of their responding to front, rear, or lateral collisions.

Developing Environmentally Compliant Technology
-In the area of developing technology that complies with environmental concerns, the Company develops new materials that improve fuel efficiency and comply with the total phase-out of environmentally harmful substances; and develops ultra-lightweight seats that incorporate the latest structural technology. It is making sales presentations to customers, who are using these products.

Developing Products for Adapted Vehicles
-The Company develops special seats designed for vehicles adapted for use by the physically challenged. These seats offer excellent assistance in terms of their easy operation and their ease of letting occupants get in and out of vehicles. It is making sales presentations to customers, who are using these products.
 
Developing Lower-cost Products
-The Company develops low-cost, next-generation seats made possible through standardization, which are already being equipped by customers in and outside Japan.

Developing Production Technology
-The Company develops technology that improves the adhesion and molding of seats, technology that can foam mold single-unit headrests and armrests, and technology that reduces work and increases automation in the seat-assembly processes. It works on mold-making and die-making based on CAD and CAM. In addition, the Company has constructed a mixed production-line that can handle small lots of numerous product items, enabling it to respond to the increasing number of both vehicle models and product items.

Seat R&D
-Under the aim of creating more comfortable seats, the Company is continuing its efforts at evaluating the level of "seating comfort", doing its own research into seat structures and designs in terms of how seats should be. In addition, in order to find the perfect design in a short period of time, i.e., a design that balances performance, quality/quantity, and costs, the Company conducts CAE analysis in reducing development time and costs.

Seat-design R&D
-The Company is developing designs on its own that are connected to all the sectors that the Company is engaged in such as seats. This includes working on future seat concepts and developing new product designs and corporate designs. The Company had made presentations to customers, who are currently using these products.

Licensing of Technology from Other Companies

(As of Mar. 31, 2013)

Partner	Country	Contract	Contract period
Isringhausen GmbH & Co. KG	Germany	-Licensing-in of manufacturing technology and distributorship for suspension systems. -Sharing and licensing of manufacturing technology and sales know-how for seats (patented items are excluded)	Nov. 1985 - for an indefinite period (Subject to expiration with a prior notice of 6 months)

Licensing of Technology to Other Companies

(As of Mar. 31, 2013)

Partner	Country	Contract	Contract period
Auto Parts Manufacturers Co., Sdn. Bhd.	Malaysia	-Licensing-out of manufacturing know-how for agreed items -Technological assistance on manufacturing equipment for agreed items (specific agreement is required) etc.	Mar. 2000 - Mar. 2015

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	4,535	4,808	1,873

-The Company invested mainly in the following projects: construction of the Technology and Product-creation Center; and preparation of new facilities and equipment to handle new program business and vehicle model changes.

-The Company expects capital expenditure for FY ending Mar. 31, 2014 to be 10,207 million yen.

<Japan>
-Capital investment of 2,825 million yen mainly in facilities assigned to produce products for new orders the Company won and to adjust its production operations to handle products for vehicles that underwent model changes.

<U.S.A.>
-The Company invested a total of 845 million yen mainly in production facilities, in order to respond to vehicle model changes.

<Mexico>
-The Company invested 604 million yen in its Mexico operations, mainly to upgrade production facilities and make preparations to respond to vehicle model changes.

<France>
-Capital investment of 69 million yen mainly in facilities assigned to produce products for new orders the Company won.

<China>
-The Company invested 169 million yen in its Chinese operations mainly to upgrade production facilities and make preparations to respond to vehicle model changes.

Planned Capital Investments

(As of Mar. 31, 2013)

Company Office	Investment targets	Estimated amount of investment (million JPY)	From	To
Musashi Plant	Equipment for manufacturing automotive seats	312	Feb. 2014	Sep. 2014
Suzuka Plant	Equipment for manufacturing automotive seats	80	Mar. 2014	Oct. 2014
Technical Monozukuri Center	IT system	410	Sep. 2013	Aug. 2014
Setex Inc. Headquarter Plant	Equipment for manufacturing automotive seats	939	Feb. 2013	Jan. 2014
Industria de Asiento Superior, S.A. de C.V. New Plant	Plant for assembly and sewing operations	1,568	Dec. 2012	Dec. 2013
Tachi-S Engineering Latin America S.A. de C.V. New Plant	New plant	743	Apr. 2013	Oct. 2014
Setex Automotive Mexico S.A. de C.V. Headquarter Plant	Equipment for manufacturing automotive seats	934	Jan. 2013	Sep. 2013
PT. Tachi-S Indonesia Headquarter Plant	New plant	569	Apr. 2013	May 2014