Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of change (%)	Factors
Overall
Sales	372,083	373,458	(0.4)	-The lower performance year-on-year is due to the Great East Japan Earthquake and the flooding in Thailand, which both caused production to slowdown.
Operating income	2,630	11,885	(77.9)	-
Ordinary income	335	8,483	(96.0)	-
Current net income	(4,521)	3,346	-	-

New Company

<Indonesia>
-The Company announced on August 1, 2011 establishment of a new manufacturing subsidiary of auto parts in Indonesia, and subsidiaries to oversee regional operations in the U.S. and China. The new company in Indonesia "PT. Futaba Industrial Indonesia" will be established in the GIIC industrial park in Bucash in October with a paid-up capital of 1.3 billion yen. More than 80 percent of the capital will be invested by Futaba Industrial. The plant built at the site of about 50,000 square meters with a building space of about 5,000 square meters at a cost of 1.5 billion yen is scheduled to go into operation in September 2012 to produce possibly mufflers and other products, which will be decided later. In October this year Futaba will also set up "Futaba North America Engineering & Marketing Co." a new subsidiary in Illinois to oversee U.S. operations. Futaba, which owns six consolidated subsidiaries in China, will reorganize one of them to form a regional headquarters "Futaba Changzhou Engineering & Marketing" in September. (From an article in the Nikkan Jidosha Shimbun on August 2, 2011)

<China>
-The Company announced that it had established Changsha Futaba Auto Parts Co., Ltd., a new production facility in Hunan Province, China, in February 2012. The new facility is scheduled to commence commercial operations from September 2012, with plans to deliver exhaust-system products, fuel tanks, instrument panel reinforcements, bumpers, and other products to Guangzhou Mitsubishi. (From a press release)

Business Plan

-In Jan., 2012, the Company announced that Futaba Imari Corp. a consolidated subsidiary in Japan, will be renamed Futaba Kyushu Corp., effective April 1, 2012. The subsidiary manufactures and sells automotive mufflers and body pillars. (From a press release on January 27, 2012)

-In Nov., 2011, the Company a leading Japanese supplier of exhaust systems, has stepped up group-wide measures to revamp and streamline its domestic production system to cope with challenging economic situations, including the yen appreciation as high as 70s to the dollar. Futaba has mapped out a 5-year program to enhance efficiency in operations at each production site of its seven facilities and subsidiaries located in the Tohoku and Kyushu areas. Based on these projects, the company will reshuffle product items among plants and review their logistics in an attempt to achieve economies of scale, as well as to maximize efficiency in production and supply systems. It has also started talks with about 100 trading partners, including second-tier suppliers and equipment manufacturers, with the aim of maintaining their domestic production bases. Futaba is committed to keeping the presence in the market as a manufacturer by teaming up with suppliers to explore solutions to the challenge of the yen appreciation. (From an article in the Nikkan Jidosha Shimbun on November 17, 2011)

Contract

-The Company announced that its exhaust pipes are being installed on Toyota's new-model Corolla. (From a press release)

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	2,214	2,130	1,953

-Most of the Company's R&D activities are for automotive components.

R&D Activities

-The Company continued to work on enhancing the development of its main products as well as environmentally friendly products by promoting joint efforts between industry and academia.
-The Company developed smaller and lighter exhaust heat recovery devices, but which actually achieve higher performance in hybrid vehicles, improving fuel efficiency. The Company aims to win more businesses for these devices.
-The Company is also focusing on developing heat management systems so as to maximize energy efficiency.
-The Company continued to work on developing PM/NOx treatment devices for diesel vehicles to reduce exhaust emissions.
-The Company developed a single-unit muffler system, in which only the main muffler is highly capable of strictly maintaining a strong level of noise reduction. This latest muffler system is being equipped on Toyota's newest model Corolla.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	13,382	15,188	30,106

-The Company invested in installing production equipment at the automotive parts business (mainly assembly and welding lines and dies and jigs) to streamline operations and reduce labor to improve its productivity, and also to deal with model changes.
- Breakdown of investment for FY ended Mar. 31, 2012: 9,558 million yen in Japan; 1,238 million yen in North America; 296 million yen in Europe, and 2,289 million yen in Asia.

-The company, Japan, announced that it will set up a new plant in Hunan, China in 2012. In March 2012, it will establish a new manufacturing company, planning to start producing exhaust manifolds, body stamping parts and other products in August 2012. It will rent a plant and prepare production systems. The investment amount has not been disclosed. It will be the company's seventh plant in China, but the first one in an inland area as the others are located mainly in coastal areas. With this move, Futaba aims to expand its business in inland China, where automakers are strengthening its efforts in response to growing demands. (From an article in the Nikkan Jidosha Shimbun on November 26, 2011)

Planned Capital Investments (Automotive Parts)

Name (Location)	Purpose	Planned investment (in million JPY )	Starting	Planned Completion
Futaba Industrial Co., Ltd.
Head Office, Okazaki Plant (Okazaki City, Aichi)	Production facility	1,000	Mar. 2011	Mar. 2013
Midori Plant (Toyota City, Aichi)	Production facility	550	Feb. 2011	Mar. 2013
Chiryu Plant (Chiryu City, Aichi)	Production facility	400	Oct. 2011	Mar. 2013
Koda Plant (Nukata gun, Aichi)	Production facility	1,600	Jun. 2011	Mar. 2013
	R&D facility	200	Mar. 2012	Mar. 2013
Mutsumi Plant (Okazaki City, Aichi)	Production facility	1,000	Mar. 2011	Mar. 2013
Tahara Plant (Tahara City, Aichi)	Building and Production facility	1,150	Jan. 2012	Mar. 2013
Takahashi Plant (Okazaki City, Aichi)	Production facility	900	Jun. 2010	Mar. 2013
	Dies and jigs etc.	5,300	Feb. 2011	Mar. 2013
Consolidated subsidiary
(Futaba Imari Corp., Imari Plant (Saga Pref., Japan)	Production facility	170	Feb. 2012	Mar. 2013
(Futaba Imari Corp., Miyata Plant (Fukuoka Pref., Japan)	Production facility	220	Apr. 2012	Mar. 2013
(Futaba Imari Corp., Nohgata Plant (Fukuoka Pref., Japan)	Production facility	600	Apr. 2012	Mar. 2013
Futaba Hiraizumi Corp. (Iwate Pref., Japan)	Production facility	330	Mar. 2012	Mar. 2013
Apics Co.,Ltd. (Aichi Pref., Japan)	Production facility	270	Apr. 2012	Mar. 2013
FIC America Corp. (Illinois, USA)	Production facility	1,430	Apr. 2011	Mar. 2013
Futaba Indiana of America Corp. (Indiana, USA)	Production facility	2,370	Mar. 2012	Mar. 2013
Futaba Industrial Texas Corp. (Texas, USA)	Production facility	420	Apr. 2012	Mar. 2013
FIO Automotive Canada Corp. (Ontario, Canada)	Production facility	470	Mar. 2012	Mar. 2013
Futaba-Tenneco UK Ltd. (Lancashire, UK)	Production facility	440	Mar. 2011	Dec. 2012
Futaba Industrial U.K. Ltd. (Derbyshire, UK)	Production facility	180	Dec. 2011	Dec. 2012
Futaba Czech s.r.o. (Czech Republic)	Production facility	480	Jun. 2011	Dec. 2012
Shenzhen Futaba Metal Products Co., Ltd. (Guangdong, China)	Production facility	60	Dec. 2011	Dec. 2012
Tianjin Shuang Shye Mechanical Industrial Co., Ltd. (Tianjin, China)	Production facility	260	Dec. 2011	Dec. 2012
Tianjin Futaba Shye Chan Mechanical Industrial Co., Ltd. (Tianjin Development Area, China)	Production facility	1,400	Nov. 2011	Dec. 2012
Guangzhou Futaba Auto Parts Co., Ltd. (Guangzhou, China)	Production facility	1,070	May. 2011	Dec. 2012
Dongguan Futaba Metal Products Co., Ltd (Dongguan, China)	Production facility	320	Jan. 2012	Dec. 2012
Chngsha Futaba Auto Parts Co., Ltd. (Hunan, China)	Production facility	800	Apr. 2012	Dec. 2012
FMI Automotive Components Ltd. (Haryana, India)	Production facility	240	Mar. 2012	Mar. 2013
PT. Futaba Industrial Indonesia (Bekasi, Indonesia)	Production facility and building	2,300	Jan. 2012	Mar. 2013