Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of change (%)	Remarks
Overall
Sales	217,279	227,478	(4.5)	-Overall, sales were lower year-on-year due to the drop in demand for steel materials used in the non-automotive sector. This was in spite of higher sales year-on-year for automotive forged products, supported by strong demand in the automotive sector.
Operating income	7,332	8,458	(13.3)	-
Ordinary income	7,929	7,925	0.1	-
Net income	4,898	4,246	15.4	-
Sales by Segment
Steel	104,223	127,362	(18.2)	-Revenue was lower due to a drop in sales volumes and lower product selling prices.
Forged products	98,030	87,423	12.1	-Revenue was higher due to an increase in sales volumes.
Electromagnetic products	11,242	9,085	23.7	-Revenue was higher due to an increase in sales volumes of electronic products and magfine magnets.

Outlook for FY ending Mar. 31, 2014

(in millions of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	238,000	217,279	9.5
Operating income	7,500	7,332	2.3
Ordinary income	7,000	7,929	(11.7)
Net income	4,500	4,898	(8.1)

>>> 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
Steel	2,416	2,378	-
Forged products	167	205	-
Electromagnetic products	1,013	753	-
Total	3,597	3,337	2,776

R&D Structure

-The Company has about 200 employees engaged in R&D as of March 31, 2013.

R&D Activities

Steel business
-The following were the main R&D results achieved:

• R&D on steel used for high-strength conrods, which help improve fuel efficiency.
• New-product development on steel for environmentally friendly gear wheels, which requires fewer resources, offering a good balance between product strength and lowering/eliminating alloys (MO, Cr-free). It is well suited to customers' new production processes, i.e., inline carburization.

Forged-products business:
-The following were the main R&D results achieved:
1) Greater efficiency and lower costs for hot-forging processes

• High-speed, automated forging of CVT shafts
• High-speed, automatic, multi-cavity manufacture of small-sized crank shafts
• Low-energy, low CO2 discharge heat-treatment furnace

2) High-precision and low-cost cold-forging

• Forming high-precision inner splines

Electromagnetic products business:
-The following were the main R&D results achieved:

• Utilizing injection molding technology on dysprosium-free, neodymium anisotropic bonded magnets magfine, and applying it to motors.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Steel	3,952	6,361	-
Forged products	5,995	3,480	-
Electromagnetic products	227	793	-
Others	98	15	-
Total	10,272	10,649	20,528

Steel
-Rationalizing and renewing manufacturing facilities, etc., making them environmentally compliant.

Forged products
-Invested to enhance production capacity; and streamline, maintain, and renew production facilities

Electro magnetic products
-Enhancement of production capacity, etc.

Investment Outside Japan
<Thailand>
-The Company held a ceremony to celebrate the completion of its new plant in Chonburi, Thailand. As a new base of Aichi International (Thailand) Co., Ltd. (AIT), its production subsidiary, it has established full-scale production operations from forging, machining through delivery inspection. The AIT has a plant in Chonburi without a forging process, which has imported forged parts from other countries for shipping. To prepare for the full-scale operations, it installed new forging facilities and transferred all the processes of machining and inspection from the existing plant. The new plant will begin a full-scale mass production in June and the old plant will be gradually closed. The Company plans to utilize the new plant as a core base in Asia to supply forged parts. The site is 101,000 m2 with the building area of 16,000 m2. (From an article in the Nikkan Jidosha Shimbun on May 12, 2012)

Planned Capital Investment

(As of Mar. 31, 2013)

Name (Location)	Type of business	Type of facility	Planned investment (in millions of JPY )	Start	Completion	Production capacity upon completion
Chita Plant (Aichi Pref., Japan)	Steel etc.	Facilities for producing steel, rolling equipment, etc.	3,192	Jul. 2010	Aug. 2014	*1
Kariya Plant (Aichi Pref., Japan)	Steel	Rolling equipment, etc.	1,027	Sep. 2010	Mar. 2015	*1
Forging Plant (Aichi Pref., Japan)	Forged products	Facilities for producing forged products	6,159	Sep. 2011	Oct. 2015	*1
Higashiura Plant (Aichi Pref., Japan)	Electro magnetic products etc.	Facilities for producing products using magnets, etc.	146	Mar. 2006	Mar. 2015	*1
Gifu Plant (Gifu Pref., Japan)	Electro magnetic products	Facilities for producing electronic functional materials and components	112	Jul. 2012	Mar. 2014	*1
Seki Plant (Gifu Pref., Japan)	Electro magnetic products	Facilities for producing products using magnets	199	Aug. 2011	Feb. 2014	*1
Electronic Components Plant (Aichi Pref., Japan)	Electro magnetic products	Facilities for producing electronic functional materials and components	953	Dec. 2011	Mar. 2015	*2

*1：The production capacity upon completion is expected to be around the same level as what it was at the end of March 2013.
*2：Information on production capacity after the facilities are completed is not provided because of the difficult in making objective assessment on output.