Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Sales	294,943	259,994	13.4	-
Operating income	10,014	10,818	(7.4)	-Although profits were fueled by greater sales and the Company’s cost reduction initiatives, overall profits decreased year-on-year due to increases in R&D expenses, depreciation costs, and labor expenses.
Ordinary income	11,013	11,458	(3.9)
Current net income	2,656	4,239	(37.3)

Highlights by Region

<Japan>
-Sales of products for four-wheel vehicles fell in Japan, but grew in Asia and North America. Sales also increased because of the Company's consolidating its automotive heat-exchanger business. As a result of this, operating revenue was 161.836 billion yen, a year-on-year increase of 16.854 billion yen.

<The Americas>
-Sales of products for four-wheel vehicles significantly increased. In addition, favorable currency translation also supported the growth in sales. As a result, operating revenue was 93.143 billion yen, for a year-on-year increase of 27.047 billion.

<Asia>
-Due to higher sales in Thailand because of the recovery in business after the flood damage the year before, operating revenue was 78.644 billion yen, a year-on-year increase of 7.274 billion yen.

<China>
- Sales of products for four-wheel vehicles fell, but those for motorcycles increased. In addition, favorable currency translation also supported the growth in sales. As a result, sales totaled 35.52 billion yen, a year-on-year increase of 831 million yen.

<Europe>
-Due to greater sales of products for four-wheel vehicles, operating revenue grew year-on-year, to 6.487 billion yen, or year-on-year increase of 2.042 billion yen.

Major Contracts

-For the direct-fuel-injection engine Honda Accord sold in North America, the Company is supplying electrically controlled products, magnesium intake manifolds, and climate-control products.
-The Company's electrically controlled products for monitoring battery voltage are being equipped on the Fit EV as well as on the Accord Plug-in Hybrid designed for the North American market.
-Alternative fuel products: injectors for natural gas vehicles are being equipped on the Suzuki Alto 800 released in India.
-Automotive heat-exchangers for the automotive climate control sector: newly developed condensers are being equipped on the Volkswagen New Golf.

Restructuring

<Japnan>
-The Company announced that it will integrate its two production subsidiaries in Kakuda City, Miyagi Prefecture effective January 2013. By consolidating their manufacturing and administrative functions into a single company, the group aims to increase its operational efficiency and improve competitiveness. The subsidiaries to be merged are Kanazu Manufacturing Co., Ltd. and Keihin Sogyo Co., Ltd., which manufacture and sell products for motorcycles and automobile, as well as general-purpose machine products. Kanazu Manufacturing, which will be the surviving company, will change its corporate name to Keihin Sakura. (From an article in the Nikkan Jidosha Shimbun on Nov. 1, 2012)

-The Company has established two new sales offices near the operations of its major customers for responding to their requirements more efficiently. One was set up in Kumamoto Prefecture, and the other on the premises of the company's Suzuka Plant in Mie Prefecture. Keihin now has four sales facilities in Japan, including its existing locations in Asaka, Saitama Prefecture and Hamamatsu, Shizuoka Prefecture.

<Europe>
-The Company announced that it has reorganized its sales operations in Europe. Keihin Sales and Development Europe GmbH (Bayern, Germany), a sales office for motorcycle products, has integrated into its operations Keihin Europe Ltd. (Glasgow, U.K.), which had specialized in sales of automotive products such as heat exchanging equipment. The integration is intended to enhance the Group's capabilities to propose its technologies to new customers.

>>>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	18,676	16,547	15,086

R&D Facilities

Tochigi R&D Center (Takanezawa Town, Tochigi Pref., Japan)

-With system development being a key focus , the Tochigi R&D Center conducts all R&D activities, from developing and inspecting software, to conducting research and analysis using actual vehicles. -As the main facility conducting system development, the Tochigi R&D Center focuses on expanding R&D areas based on systemization and integration as well as developing advanced technologies mainly for electronic control units (ECUs).

Kakuda R&D Center (Kakuda City, Miyagi Pref., Japan)

-The Kakuda R&D Center, in aiming to develop core products that support systems, pursues performance, functionality, durability, and economy, which are elements that form the foundations to improving quality; and at the same time, it links these elements to production technology. -It consists of an analysis building, which analyzes data; a durability building, which conducts vibration tests and measures heat resistance; and a chassis building, which uses actual motorcycles and vehicles to evaluate products in terms of their value as system components.

-The Company announced opening of its second R&D facilities in China at Shenyang, Liaoning, where it plans to accelerate technology development in order to meet the fuel efficiency requirements tightened by the Chinese government. It will invest a total of one million yuan (approx. 12 million yen) and hire 50 employees at the end of 2012. Keihin Corp. established an R&D center in Shanghai in 2003 and has promoted localization in terms of development. By opening the new R&D facilities, it aims to improve customer services and to increase local parts procurement so that it should raise cost competitiveness. (From an article in the Nikkan Jidosha Shimbun on Jun. 4, 2012)

R&D Activities

Four wheel vehicle business
The Company developed and commercialized
-Fuel-supply systems and induction-systems for environmentally friendly engines
-Products for hydraulically controlling transmissions
-Fuel-supply products and systems designed to handle alternative fuels
-Products for high-performance, compact automotive air-conditioning systems.
-ECUs for engines and transmissions
-Motor and battery control-units for hybrid cars
-Cell voltage sensor unit for lithium-ion batteries

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Total	24,365	13,013	12,518

Breakdown of capital investment costs in facilities and equipment:
-Production: 15,871 million yen; R&D: 1,573 million; Others (including intangible assets) 6,919 million yen.

Breakdown of capital investment costs by region:
-Japan: 5,888 million yen; The Americas: 2,648 million yen; Asia: 5,827 million yen; China: 1,501 million yen; Europe: 7 million yen

Investments Outside Japan

-The Company has developed a highly efficient production line to manufacture electronic control units (ECUs) of automotive engines. The advanced production line has already been introduced to the company's Thai facility. The Thai Plant will function as a supply hub for engine ECUs for use on the next-generation of Honda's flagship model, which is scheduled for a global release this year. These ECUs will be delivered to Honda's factories in Thailand, Japan, Mexico and some other countries in Asia. Up until recently, Keihin has been producing ECUs for the model's existing lineup also in Japan. The company, however, has decided to switch to integrated production in Thailand to enhance its cost competitiveness. As a next step, Keihin is going to introduce the high-efficiency production line into its second plant in Indonesia, which will commence production in August this year. When the plant becomes operational, the Thai facility and the Indonesian facility will be able to produce ECUs for 1 million vehicles a year in total. (From an article in the Nikkan Jidosha Shimbun on Feb. 26, 2013)

-The Company will boost its production capacity for air conditioning heat exchangers by 1 million units a year by FY2013. The enhancement is to deal with increasing orders from the Volkswagen Group, which is expanding its global sales volume. The Japanese supplier will raise production capacity at its facilities in Mexico, the Czech Republic, and China. Building on the business with Volkswagen, Keihin is looking to boost business with customers other than Honda, its parent company. Its sales to non-Honda companies, which totaled 30 billion yen on a consolidated basis in FY2011, are expected to triple to around 100 billion yen by FY2018. (From an article in the Nikkan Jidosha Shimbun on Jan. 18, 2013)

Planned Capital Investments

(As of Mar. 31, 2013)

Segments	Planned Amount of Investment (in million yen)
Japan	7,386
The Americas	8,108
Asia	8,615
China	2,458
Europe	26
Total	26,595