Financial Overview

(in million JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Sales	42,042	34,289	22.6	1)
Operating income	1,781	284	527.1	-
Ordinary income	1,756	302	481.5	-
Current net income	1,288	216	496.3	-

Factor
1) Sales
-During the fiscal year ended March 2014, sales increased 22.6 percent year-on-year due to the following factors:

• Sales of synthetic leather (polyurethane leather) for automotive seats increased significantly from the previous year thanks to new orders for main seat materials. The main seat materials are used on a number of new vehicles.
• Sales at the Company's Chinese subsidiary grew as a result of active marketing efforts targeted at local manufacturers. Demand from Japanese automakers also increased due to a recovery in vehicle production volume.

Outlook for FY ending Mar. 31, 2015

(in million JPY)

	FY ending Mar. 31, 2015	FY ended Mar. 31, 2014	Rate of change (%)
Sales	42,500	42,042	1.1
Operating income	1,800	1,781	1.1
Ordinary income	1,800	1,756	2.5
Net income	1,400	1,288	8.7

R&D Expenditure

(in million JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	564	565	560

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

Synthetic leather for seat main
-The Company will continue to develop and propose synthetic leather that is used as seat main material. The polyurethane leather greatly contributed to boosting the Company's sales during the fiscal year ended March 2014.
Major features of the synthetic leather:

• Achieves high flame-retardant properties and excellent wear-resistance
• Offers an innovative texture that is different from genuine leather and fabric. Such innovation was achieved by tie-dyeing and advanced surface treatment technologies
• Optimized urethane composition minimizes a rise in seat temperature and dampness. In addition, a new porous structure allows air to pass through easily

Capital Expenditure

(in million JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	1,994	1,199	2,790

-Major investment projects during the fiscal year ended March 2014 included the retooling of foaming machine at the Tenryu Plant No.1. The Company also invested in capacity expansion and cost-cutting projects. 

Planned Capital Investment

(As of Mar. 31, 2014)

Name	Facility	Total Amount Invested (In millions of JPY)	Started	Expected to Complete in
1st Tenryu Plant (Shizuoka Pref., Japan)	Synthetic leather (for vehicles, furniture, shoes and general merchandise)	237	Apr. 2014	Mar. 2015
2nd Tenryu Plant (Shizuoka Pref., Japan)	Composites for molding and making synthetic leather (for vehicles, furniture, shoes and general merchandise)	529	Apr. 2014	Mar. 2015
Shinshiro Plant (Aichi Pref., Japan)	Production facilities to form automotive composite materials	159	Apr. 2014	Mar. 2015
Headquarters (Shizuoka Pref., Japan)	Facilities for conducting R&D	186	Apr. 2014	Mar. 2015
Kyowa-GSK Plastics (Langfang) Co., Ltd. (Langfang, China)	Composites for molding and making synthetic leather (for vehicles)	384	Jan. 2014	Dec. 2014