Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	117,068	117,621	(0.5)	-The overall financial results this past fiscal year were lower year-on-year due to the drop in unit-production both in and outside Japan of four-wheel vehicles built by the Company's main customers who were negatively impacted by the Great East Japan Earthquake and the flooding in Thailand. Another factor that caused lower year-on-year financial performance was negative currency translation due to the high evaluation of the yen.
Operating income	11,056	12,852	(14.0)
Ordinary income	11,494	12,672	(9.3)
Net income	7,276	8,041	(9.5)
Automotive Clutch Division
Sales	46,426	49,419	(6.1)	-Operating performance in the Automotive Clutch Business dropped year-on-year due to due the decrease in unit-production both in and outside Japan of four-wheel vehicles built by the Company's main customers, who had been negatively impacted by the Great East Japan Earthquake and the flooding in Thailand. In addition, negative currency translation also affected the business' results.
Operating income	1,601	2,948	(45.7)

Contracts

-The Company has been awarded a new contract to supply clutch parts and other products to ZF AG, a German transmission supplier. Ordered products are clutch assemblies and disk sets, which will be supplied from its U.S. subsidiaries. Clutch assemblies will be delivered from "FCC Indiana," and friction and core plates from "FCC North Carolina," respectively. (From an article in the Nikkan Jidosha Shimbun on June 16, 2011)

Recent Developments Outside Japan

<USA>
-The Company announced that it will transfer major manufacturing processes from two plants in Ryuyo and Tenryu in Iwata City on the Pacific coast to other plants in the inland area and the subsidiary in the U.S. to avoid risks of tsunami and liquefaction from future earthquakes. Production of friction materials will be moved from the Ryuyo Factory to the Suzuka Factory in Mie Prefecture and FCC (North Carolina), LLC. Clutch parts for vehicles will be diverted to the Hamakita Factory in Hamamatsu. Friction materials will be transferred from the Tenryu Factory to the Hosoe Factory in Hamamatsu, and clutches for motorcycles to the Suzuka Factory, respectively. (From an article in the Nikkan Jidosha Shimbun on March 23, 2012) 

-The Company is going to start producing friction materials for automotive transmission clutches in the U.S.A. Up until now, the Company has been manufacturing such materials solely in Japan. Projecting an increase in clutch production in the U.S., and addressing risks of natural disasters, the Company has decided to produce them also in the U.S. In North America, F.C.C. will increase production of clutches for Ford Motor, while starting to produce products also for ZF, a German-based automatic transmission supplier. Production of friction materials for both motorcycles and automobiles is currently conducted at the Ryuyo Plant (Iwata City, Shizuoka Prefecture) and the Suzuka Plant (Suzuka City, Mie Prefecture). For its close proximity to the coast (1.5-kilometers), the Ryuyo Plant has a high tsunami risk in case of an earthquake. In order to reduce the hazard, the Company plans to transfer one of the three production lines at the Ryuyo Plant to Suzuka as early as this year, and one to its existing plant in the U.S. (From an article in the Nikkan Jidosha Shimbun on February 28, 2012)

<Germany>
-The Company announced that it will form FCC Munich Office in Germany to strengthen its vehicle clutch business in Europe. The new office will start its operations in April 2012. (From a press release on December 22, 2011)

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

R&D Structure

-The Company has a Technology Laboratory and Production Technology Center in Hamamatsu City, Shizuoka Prefecture.

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	2,933	2,853	2,807
Automobile clutches	1,658	1,548	1,474

R&D Activities

Automobile clutches
-The Company conducted R&D on wet friction-materials for automatic transmissions (which include CVTs) and dry friction-materials for manual transmissions as the underlying framework to developing clutches that are lighter in weight and lower in cost, and which contribute to better fuel efficiency.
-For new customers, the Company developed new, wet friction-materials for automatic transmissions. These materials, which improve fuel efficiency and resistance to wear and abrasion, are based on friction plate production plans on segmentation, which is the Company's proprietary technology.  
-The Company mass-produced friction materials for center differentials, which contribute to increasing product appeal and resistance to friction and abrasion.
-The Company is developing clutches based on a new architecture, designing them to work with multi-step automatic transmissions.

Product Development

New heat-resistant friction material
-The Company will soon start supplying its newly developed heat-resistant friction material to automakers. The new technology, which is quite insusceptible to "hot spot" burning and other defects, will be used on clutch products. The level of its heat resistance is almost 40 percent higher than existing products running in friction under high-speeds and low load. The Company will initially release the material for automotive clutch application, looking to expand the use to motorcycle clutches as well in the future. The company will present this next-generation clutch technology to vehicle manufacturers, highlighting its excellent performance and quality. It has already won a business for a car clutch application. (From an article in the Nikkan Jidosha Shimbun on June 8, 2011)

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	11,051	4,744	4,283

-For the mid term, the Company focused its investments in product areas and R&D areas that are expected to grow, investing in products that require less labor, and contribute to improving reliability and rationalization.

Planned Capital Investments

(As of Mar. 31, 2012)

Name (Location)	Business segment	Type of facility	Planned total investment (million yen)	Start	Planned completion
F.C.C Co., Ltd
Suzuka Plant (Mie Pref., Japan)	Motorcycle clutches Automobile clutches	Production facility for clutches	1,125	2012.04	2013.03
Technology Research Center (Shizuoka Pref., Japan)	R&D	Testers and measuring instruments	458	2012.04	2013.03
Hamakita Plant (Shizuoka Pref., Japan)	Automobile clutches	Building, Production facility for clutches	352	2012.04	2013.03
Hosoe Factory (Shizuoka Pref., Japan)	Motorcycle clutches Automobile clutches	Production facility for clutches	348	2012.04	2013.03
Subsidiaries
PT.FCC Indonesia (Karawang, Indonesia)	Motorcycle clutches Automobile clutches	Production facility for clutches	2,512	2012.04	2013.03
FCC (North Carolina), L.L.C. (North Carolina, USA)	Motorcycle clutches Automobile clutches	Building, Production facility for clutches	2,433	2012.04	2013.03
FCC (Thailand) Co., Ltd. (Bangkok, Thailand)	Motorcycle clutches Automobile clutches	Building, Production facility for clutches	1,660	2012.04	2013.03
FCC Adams , LLC. (Indiana, USA)	Automobile clutches	Building, Production facility for clutches	1,178	2012.04	2013.03
FCC Rico, Ltd. (Haryana, India)	Motorcycle clutches Automobile clutches	Building, Production facility for clutches	951	2012.04	2013.03