Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Sales	29,934	28,020	6.8	-Financial performance improved year-on-year, supported by the recovery in demand that occurred during the latter half of the fiscal year.
Operating income	(890)	(122)	-	-
Ordinary income	(940)	(28)	-	-
Current net income	(958)	(1,935)	-	-

-Operating revenue from the automotive business increased 10.0% year-on-year, growing to 17,395 million yen, which accounts for 58.1% of all operating revenue of the Company.

Restructuring

-The Company announced it will transform Kyowa-Gsk Plastics (Langfang) Co., Ltd., a stock sharing application based affiliate in China, into its consolidated subsidiary. By acquiring a 10 percent stock from its joint venture partner Ullitec Holdings Corporation, Kyowa Leather will increase its stake to 60 percent. Kyowa-Gsk Plastics (Langfang) manufactures and sells compound formed materials and synthetic leather for automobiles. (From a press release on September 21, 2011)

Outlook for FY ending Mar. 31, 2013

(in millions of JPY)

	FY ending Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of change (%)
Sales	35,500	29,934	18.6
Operating income	300	(890)	-
Ordinary income	300	(940)	-
Net income	100	(958)	-

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	560	575	482

R&D Structure

-The Company has a technical center in Hamamatsu City, Shizuoka Prefecture.

R&D Activities

Development agendas of the automotive interior business
-The Company is developing new, synthetic-leather materials that contribute to enhancing the quality of vehicles.
-The Company is working to improve upon and develop product technology that takes into consideration factors such as weight reduction, ease of recycling, lowered costs, environmental protection, and greater comfort for passengers.

Product Development

-The Company's proprietary Aquawish, an environmentally friendly aqueous synthetic leather, was employed as an automotive interior material for the first time.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	2,790	1,300	1,048

-The Company is making capital investments in its facilities and equipment, mainly in the coating machines in Plant No. 2 at the Tenryu Plant, and in its printers. In addition, the Company is spending to improve its operating cost-structure in order to lower costs.

Planned Capital Investment

(As of Mar. 31, 2012)

Name	Facility	Total Amount Invested (In millions of JPY)	Started	Expected to Complete in	Increased Capacity after Completion
1st Tenryu Plant (Shizuoka Pref., Japan)	Synthetic leather (for vehicles, furniture, shoes and general merchandise)	375	Apr. 2012	Mar. 2013	No increase (initiated for rationalization purposes only)
2nd Tenryu Plant (Shizuoka Pref., Japan)	Composites for molding and making synthetic leather (for vehicles, furniture, shoes and general merchandise)	363	Apr. 2012	Mar. 2013	No increase (initiated for rationalization purposes only)