Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of change(%)	Factors
Overall
Sales	29,200	27,479	6.3	-
Operating income	837	863	(3.0)	-
Ordinary income	944	906	4.2	-
Net income	1,040	663	56.9	-
Electrical Component Business
Sales	12,572	11,096	13.3	-Sales increased year-on-year because the construction machinery markets in Asia, North America, and Japan finally hit bottom and stabilized. In addition, even though the Company suffered a temporary setback because of the Great East Japan Earthquake, the quick recovery in demand after helped contribute to higher sales year-on-year.
Operating income	1,032	722	42.9	-

Joint Ventures

-The Company said on December 16 that it has decided to tie up with Thai Electric Industries Co., Ltd. (TEI) on forming a joint venture in Thailand. Establishment of a local manufacture and sales facility in Asia, in which the economy is projected to grow steadily, is meant to enhance a competitive edge in cost by avoiding the risk of the strong yen and promoting local sourcing in response to customers that are stepping up overseas production. The joint venture "Sawafuji Electric (Thailand) Co., Ltd." will be set up in Nonthaburi Province on January 20, 2012. Its capital of 150 million baht (approximately 372 million yen) will be shared 74 percent by Sawafuji and 26 percent by TEI. The new company plans to be engaged in manufacture and sales of electrical parts like starters, alternators and generators.　(From an article in the Nikkan Jidosha Shimbun on December 19, 2011)

Recent Development Outside Japan

<Thailand>
-The Company is going to start manufacturing automotive electric components such as starters and alternators as well as gasoline and diesel engine generators in an Asian country other than Japan. The Company is mulling the possibility of establishing a new plant in Thailand, where it has produced vehicle refrigerators. New operation is expected to start as early as the beginning of 2013, becoming the Company's first production base for electric components outside Japan. The move is intended to meet an expected increase in demand from its major customer, Hino Motors, Ltd., which is stepping up business in Thailand. In the area of generator business, the Company is aiming to supply high-quality and low-cost products that suit the needs of the growing Asian market. (From an article in the Nikkan Jidosha Shimbun on August 10, 2011)

Management Policies

-The Company adheres to the following management policies in order to make the Group more adaptable to changes, as well as to create a company capable of achieving continued growth.
1) Strengthen R&D Capabilities

• Enter new business sectors, working in the growing area of electric and hybrid commercial vehicles.
• Redevelop technological expertise in electric-power-generation.
• Innovate and expand the refrigerated vehicle business.

2) Create a global production framework

• Complete the successful launch of the Thai subsidiary
• Develop an integrated production framework based on both the Nitta and Thai plants.

3) Revolutionize product creativity

• Focus even more on TPM
• Significantly improve productivity

4) Develop human resources

R&D Expenses

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	812	626	749
Electrical Component	421	307	240

R&D Activities

Electrical Components
-Currently developing small and light, and high-powered electrical components that are in compliance with new regulations on mid-to-large-sized diesel-powered vehicles.

-The Company has begun to develop a new hybrid system that uses function of the starter partly as power source for driving a vehicle. The electric device supplier is aiming to increase fuel efficiency by having the starter partly assist the engine while the vehicle is starting or accelerating. The Company will propose this technology to commercial vehicle manufacturers focused on its leading customer, Hino Motors, as the system for medium- and heavy-duty trucks. The starter is originally a device to ignite the engine. The new system is meant to reduce fuel consumption by use of the starter power as a supplemental energy for driving the vehicle, when fuel consumption is soaring at the time of start and acceleration. The Company is also working hard on development and commercialization of a starter of high durability compliant with an automatic vehicle start and stop system that repeatedly puts on or off the engine. This technology will be applied to the new hybrid system as well. (From an article in the Nikkan Jidosha Shimbun on August 22, 2011)

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	242	286	490

-The Company made investments in equipment mainly for improving profitability and streamlining production operation. 

Planned Capital Investment

(As of Mar. 31, 2012)

Company / Location	Facilities	Expected Investment (In millions of JPY)	Start	Planned completion	Capacity increase after completion
Sawafuji Electric Thailand Co., Ltd. (Nonthaburi, Thailand)	Facilities to produce electrical parts Facilities to produce electric power units	578	Apr. 2012	Mar. 2013	30% increase