Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	126,245	117,068	7.8	-The Company increased sales due to strong performance in its Automobile business because of the recovery in automobile production at its major customers. This was despite sales decreases of motorcycle clutches in Indonesia and Brazil, and the drop in sales in China triggered by the boycott on Japanese products.
Operating income	10,964	11,056	(0.8)	-The Company incurred higher initial costs involved with launching new types of products.
Ordinary income	13,124	11,494	14.2	-Income grew due to favorable currency
Net income	7,942	7,276	9.2	-The Company reported higher corporate taxes
Automotive Clutch Division
Sales	55,240	46,426	19.0	-Performance was negatively impacted by the boycott on Japanese products in China. Nevertheless, sales and profit both increased especially due to strong to strong sales to Ford, in addition to the overall recovery in production levels at the Company’s major customers in Japan and North America.
Operating income	3,798	1,601	137.2

New Company

Established Joint Venture in Korea
-The Company and Seojin Automotive Co., Ltd. of Korea established FCC Seojin Co., Ltd., a 50-50 joint venture in Korea. The new entity will invest 86 million dollars to set up a production facility in Pyeongtaek City to manufacture wet-type clutches. The construction project will commence in June 2013, and production is expected to begin in September 2014. Seojin Automotive is a clutch manufacturer, supplying its products to automakers including Hyundai-Kia, Renault Samsung, GM Korea, and the SAIC Group. (From a press release, January 30, 2013)

Etablished Management Company in China to Oversee Country's Operations
-The Company announced that it will establish a new wholly-owned subsidiary, F.C.C. (China) Investment Co., Ltd., in Chengdu, Sichuan Province, China with an investment of 30 million USD. F.C.C. is planning a substantial capital investment related to primarily to clutches for automobiles. The new subsidiary will be established for financing the fund and overseeing. (From a press release on June 25, 2012)

Restructuring

Liquidated Subsidiary
-The Company announced that it has completed to liquidate FCC (Europe) Ltd., its UK consolidated subsidiary. The subsidiary had been manufacturing and selling of clutches for motorcycles and automobiles. (From a press release on December 25, 2012)

Merged Subsidiaries
-The Company announced that it will merge its two U.S. consolidated subsidiaries, FCC (Indiana) Mfg., LLC. and FCC (Indiana), Inc., effective January 1, 2013. FCC (Indiana) Mfg., LLC., which will be a surviving company, is to change its corporate name to FCC (Indiana), LLC. The integration of FCC (Indiana) Mfg., LLC., a manufacturing company for automotive clutches and related parts, with FCC (Indiana), Inc., a sales company for clutches and parts manufactured by FCC (Indiana) Mfg., LLC., will lead to reducing the management cost and improving the efficiency in its operations. (From a press release on November 22, 2012)

Transferred Production Lines
-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.

>>>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	2,983	2,933	2,853
Automobile clutches	1,745	1,658	1,548

R&D Structure

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

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.
-The Company began commercial production of torque limiters for hybrid cars, after developing them based on technology on wet-friction materials and wet-friction technology for automatic transmissions that were improved in terms of fuel performance and durability based on the segmented method of friction-plate production, which is the Company's proprietary technology.
-The Company developed a clutch featuring a new design structure, which is capable of responding to new, multi-speed automatic transmissions.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Motorcycle clutches	5,059	5,593	2,127
Automobile clutches	6,038	4,883	2,428
Company-wide (all functions)	677	575	189
Overall	11,774	11,051	4,744

-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.

-The Company will add clutch production lines for continuously variable transmissions (CVTs) at its manufacturing sites in North America, China, and Indonesia, as the company's major customer Honda Motor is increasing its focus on CVT technology in its small- and mid-size lineup, which typically used automatic transmissions (ATs). F.C.C.'s U.S. plant has recently started operation of its new CVT clutch production line. During fiscal year 2013, the company will also revamp its existing production lines in Indonesia and China to make clutches for CVTs instead of ATs. Furthermore, by setting up an additional production line to the U.S. and China plant respectively, the company will increase the number of its CVT clutch production lines overseas to five by fiscal year 2014. Operating six production lines in total, including the one in Japan, the company will be able to produce clutches for 3 million CVT systems a year. (From an article in the Nikkan Jidosha Shimbun on Jan. 28, 2013)

-The Company will start local production of lockup clutches for torque converters in Thailand by the end of this year. Up until now, the company has been manufacturing clutches for the Thai market in Japan. In order to meet the needs of its customers for local sourcing, the company will transfer its production line from Japan to Thailand. F.C.C. now produces automotive clutches mainly in Japan, the U.S., China and Indonesia. Transfer of the lockup clutch production line will allow the company to begin full-scale production operations for automotive components in Thailand. (From an article in the Nikkan Jidosha Shimbun on Oct. 17, 2012)

Planned Capital Investments

(As of Mar. 31, 2013)

Name (Location)	Business segment	Type of facility	Planned total investment (million yen)	Start	Planned completion
F.C.C Co., Ltd
Hamakita Plant (Shizuoka Pref., Japan)	Automobile clutches	Building, Production facility for clutches	1,066	Apr. 2013	Mar. 2014
Technology Research Center (Shizuoka Pref., Japan)	R & D	Testers and measuring instruments	350	Apr. 2013	Mar. 2014
Ryuyo Factory (Shizuoka Pref., Japan)	Motorcycle clutches Automobile clutches	Production facility for clutches	151	Apr. 2013	Mar. 2014
Suzuka Plant (Mie Pref., Japan)	Motorcycle clutches Automobile clutches	Production facility for clutches	151	Apr. 2013	Mar. 2014
Subsidiaries
FCC (North Carolina) LLC. (North Carolina, USA)	Motorcycle clutches Automobile clutches	Building, Production facility for clutches	7,160	Apr. 2013	Mar. 2014
FCC (Thailand) Co., Ltd. (Bangkok, Thailand)	Motorcycle clutches Automobile clutches	Building, Production facility for clutches	2,086	Apr. 2013	Mar. 2014
Chengdu Yonghua. F.C.C. Clutches Co., Ltd. (Szechuan, China)	Motorcycle clutches Automobile clutches	Production facility for clutches	2,072	Jan. 2013	Dec. 2013
FCC (Indiana), LLC. (Indiana, USA)	Automobile clutches	Production facility for clutches	1,805	Apr. 2013	Mar. 2014
FCC Adams , LLC. (Indiana, USA)	Automobile clutches	Building, Production facility for clutches	1,330	Apr. 2013	Mar. 2014
PT.FCC Indonesia (Karawang, Indonesia)	Motorcycle clutches Automobile clutches	Production facility for clutches	824	Apr. 2013	Mar. 2014