Financial Overview

(in millions of JPY)

	FY ended March 2013	FY ended March 2012	Rate of Change(%)	Factors
Sales	102,817	96,237	6.8	-
Operating income	7,579	6,207	22.1	-
Ordinary income	8,934	7,224	23.7	-
Net income	4,501	3,013	49.4	-
Automotive and Construction Machinery Industries
Sales	60,019	52,768	13.7	-Sales increased due to favorable growth in Japan, even though sales declined because of the economic slowdown in China and the debt crisis in Europe.

Outlook for FY ending Mar. 31, 2014

(in million of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	110,000	102,817	7.0
Operating income	9,000	7,579	18.7
Ordinary income	9,600	8,934	7.5
Net income	5,200	4,501	15.5

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

Mid-term Management Plan

-The Company announced its mid-term management plan that covers the fiscal years 2011-2013 (starting March 2012 and ending March 2014). Under the plan, the Company aims to achieve operating revenue of 110 billion yen and an operating profit of 9 billion yen. The main points are outlined below.

• In order to build a global production structure, the Company will continue migrating production operations to locations outside Japan, which it is currently doing; working to boost its production volumes outside Japan.  
• The Company will develop next-generation products that are anticipated to be commercialized 10 years later, as well as enhance its core technologies in order to make this a reality. 

R&D Expenditure

(in millions JPY )

	FY ended March 2013	FY ended March 2012	FY ended March 2011
Overall	755	676	615

R&D Structure

-The Company's Technical Center is the main function responsible for R&D activities in the Company, collaborating with the technical/engineering, production, and sales functions to develop products in all its business sectors.
-The Company has 66 staff working in R&D, accounting for 1.3% of its total workforce.
-R&D expenses in its business operations targeted to the auto and construction equipment industries are 474 million yen.

R&D Activities

Automotive and Construction Machinery Industries
-Mechanical seals for engine coolant circulation pumps

• The Company is developing next-generation mechanical seals that significantly reduce frictional force while at the same time maintain a high level of sealing performance.
• The Company completed development of a carbon bearing for electric water-pumps, which demonstrates excellent performance in terms of wear and abrasion resistance.

-Mechatronic products

• The Company started commercial production of metal seals for turbo chargers, which comply with exhaust-gas emissions regulations.
• In the sector of producing products that respond to the need for improved fuel efficiency, the Company not only expanded its production volume of fuel pulsation dampers but also developed products that meet a wider range of uses. 

Capital Expenditure

(in millions JPY)

	FY ended March 2013	FY ended March 2012	FY ended March 2011
Overall	8,527	8,821	3,496

Automotive and Construction Machinery Industries
-In fiscal year ended Mar. 31, 2013, the Company made capital investments mainly to increase its production capacity, especially at the following locations.

• The Company: 2,937 million JPY
• EKK Eagle (Thailand) Co., Ltd.: 856 million JPY
• P.T. Eagle Industry Indonesia: 786 million JPY
• Eagle Industry France S.A.S.: 557 million JPY

Investments Outside Japan

<Indonesia>
-The Company started building a new plant at P.T. Eagle Industry Indonesia in March 2013, planning to launch commercial production of floating seals for construction equipment in December 2013. In addition, in the fiscal year ending March 2016, the plant is scheduled to start producing seals for automotive water pumps and lip seals for automotive air-conditioners, estimating that operating revenue will reach 5 billion yen at the end of the 2019 fiscal year. This plant is being positioned as an important production facility to supply products to automobiles and construction equipment in the Asian region.

<Mexico>
-The Company built a production facility at its subsidiary in Mexico, EKK Eagle Industry Mexico S.A. de C.V., with construction of the plant building scheduled for completion in July 2013. From April 2014, the plant will produce TM solenoid valves, with operating revenue at the end of the 2019 fiscal year ending in March 2020 forecast to reach 10 billion yen. The Company is considering producing water-pump seals and air-conditioning control valves in the future.

Planned Capital Investment

(As of Mar. 31, 2013)

Facility (Location)	Location	Equipment to be installed	Estimated amount of investment (in million JPY)	Period of the project
				from	to
The Company's Okayama Plant	Okayama Pref., Japan	Equipment to produce mechanical seals	2,086	Apr. 2013	Mar. 2014
		Equipment to produce special valves
Hiroshima Eagle Co., Ltd.	Hiroshima Pref., Japan	Equipment to produce mechanical seals	202	Apr. 2013	Mar. 2014
		Equipment to produce special valves
Okayama Eagle Co., Ltd.	Okayama Pref., Japan	Equipment to produce mechanical seals	119	Apr. 2013	Mar. 2014
		Equipment to produce special valves
Eagle Industry France S.A.S.	France	Equipment to produce special valves	2,301	Apr. 2013	Mar. 2014
EKK Eagle (Thailand) Co., Ltd.	Thailand	Equipment to produce mechanical seals	624	Apr. 2013	Mar. 2014
		Equipment to produce special valves
Eagle Simrax B.V.	Netherlands	Equipment to produce mechanical seals	456	Apr. 2013	Mar. 2014
Eagle Industry (Wuxi) Co., Ltd.	Wuxi, China	Equipment to produce mechanical seals	322	Apr. 2013	Mar. 2014
		Equipment to produce special valves