Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	1,067,526	1,052,671	1.4	-Sales revenue in Japan recovered because of greater sales of new-autos that resulted from the recovery of the Great East Japan Earthquake and the stimulation in consumer sales arising from eco-car sales incentives.  Sales in Steering unit increase.
Operating income	29,158	35,657	(18.2)	-Operating income decreased due to several factors such as depressed selling prices of products.
Ordinary income	34,240	38,649	(11.4)
Current net income	13,862	13,303	4.2	-
Mechanical Components Division
Sales	921,798	902,797	2.1	-Sales in Steering widely increased.
Operating income	17,494	22,862	(23.5)	-The increase in operating revenue, which resulted from greater sales volume, was offset by depressed product selling prices.

Parts Standardization Project

-The Company, in response to a growing trend toward modularization by automakers, is revamping its processes and practices to propose application engineering in parts development. The Japanese auto parts supplier has up to now been engaged in applied development close to individual application specified to each customer or product. Hereafter, however, it is poised to eradicate waste in designing by putting standard specification products at the centerpiece. By preparing parts catalogs in the three major product areas of steering, drive-train unit and bearing by Mar.2013, the company will recommend automakers to adopt standard specifications in the core portion of parts and apply specific features to the peripheral portion to meet individual requirements by highlighting advantages in cost created by economies of scale.　

Parts Evaluation Structure

-The Company will construct a global structure capable of evaluating technologies and specifications on its own in various places of the world in order to offer the optimal specifications without asking for feedback from customers. The Company is aiming to increase sales by cutting cost and leadtimes for product development. (From an article in the Nikkan Jidosha Shimbun on Oct. 19, 2012)

- The Company held an opening ceremony for its new proving grounds in Iga, Mie Prefecture on October 10, 2012. For the Company, which has been conducting test runs at proving grounds of Toyota and other companies, this is the first time to establish its own test courses. The Iga proving grounds consist of a general circuit course, one of the world's flattest dynamics pads, and a noise assessment course copying road conditions in newly developing countries. The new proving grounds will play a significant role in driving to improve product performances and shortening development lead times. The Iga facility has a total course area of 160,000 square meters on approximately 500,000 square meters of land. The Company has invested about 3 billion yen in this facility. (From an article in the Nikkan Jidosha Shimbun on Oct. 11, 2012)  

Absorption

- The Company is absorbing its wholly-owned subsidiary, Toyoda-Koki Automotive Torsen Company, as of October 1, 2012, which develops and manufactures torque sensing limited-slip differentials (Torsen). The Company, which is pursuing standardization, grouping and modularization in the auto parts division, is aiming to enhance product capability and utilize its management resources more efficiently by absorbing the subsidiary.  (From an article in the Nikkan Jidosha Shimbun on August 1, 2012)

Outlook for FY ending Mar. 31, 2014

(in 100 million JPY)

	FY ending Mar. 31, 2014 (Estimate)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	11,200	10,675	4.9
Operating income	360	291	23.7
Ordinary income	340	342	(0.6)
Net income	155	138	12.3

Outlook by Segment for FY ending Mar. 31, 2014

(in 100 million JPY)

	FY ending Mar. 31, 2013 (Estimate)	FY ended Mar. 31, 2012 (Actual Results)	Rate of Change (%)
Total of  Mechanical Components	9,650	9,217	4.7
-Steering	5,190	4,837	7.3
-Bearing	3,240	3,184	1.8
-Driveline	1,220	1,196	2.0
Total of Machine Tools	1,550	1,457	6.4
Overall	11,200	10,675	4.9

>>>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	36,355	34,704	31,938

R&D Facilities in Japan

Technical Center	Automotive System Operations	-Yokohama, Kanagawa Pref. -Okazaki, Aichi Pref. -Kashihara, Nara Pref.
	Machine tool / Bearing Operations	-Yokohama, Kanagawa Pref. -Toyota, Aichi Pref. -Kashiwara, Osaka Pref.

R&D Activities

-The Company, together with Toyota Motors, jointly developed technology on friction control that can analyze the surfaces of gear wheels down to the nano level and improve the reliability and quietness of Torsen differentials. (Torsens are a type of differential that can instantly optimize the distribution of torque between the front and rear wheels or the left and right wheels depending on the driving condition.) This latest technology can now be equipped on hybrid vehicles, from which customers have come to expect a high level of quietness these days. In fact, this technology is recognized as epoch-making in terms of new technology for automotive parts based on tribology, being awarded the Japan Society of Tribologists "Technology Award" and the Society of Automotive Engineers of Japan "Thesis" Award.

Product Development

Steering Systems Division
-The Company is working to make steering systems more compact and lighter, mainly focusing on electric power-steering systems that are regarded to be the most environmentally friendly steering systems. The Company developed a combined ECU/motor C-EPS system as its newest series of column-assist power-steering systems. This new system is 30% more compact and 35% lower in weight compared to conventional systems, and is even 10% more energy efficient.

Bearing Division
-The Company's LFT-III ultra-low-torque tapered bearings are now being equipped on Japan-built sports cars. These latest tapered bearings are for differentials and boast the lowest level of torque performance in the world, achieving an 80% reduction in torque compared to the Company's existing ones. When combined with Torsen differentials, these tapered bearings help enhance not only driving comfort but also fuel efficiency.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	109,602	65,864	30,850
Mechanical Components	95,771	59,289	27,321

Overall
-Added production facilities in order to respond to demand in every region.
-Establishment of Iga proving ground.
-Invested to create core technologies in-house, develop innovative production methods and facilities, and set-up global-standard production lines.

Machine tool
-Organized and enhanced production plants in order respond to increased demand in developing countries.
-Establishment of technical centers and Iga proving ground.

Planned Capital Investment

(As of Mar. 31, 2013)

Plant	Location	Type of facility	Estimated amount of investment (in million JPY)	Project Period
				From	To
Kokubu Plant	Osaka, Japan	Facility for manufacturing mechanical components	3,800	Apr. 2013	Mar. 2014
Kagawa Plant	Kagawa, Japan	Facility for manufacturing mechanical components	3,700	Apr. 2013	Mar. 2014
Hanazono Plant	Aichi, Japan	Facility for manufacturing mechanical components	3,300	Apr. 2013	Mar. 2014
Daibea Co., Ltd. Head Office & Izumi Plant	Osaka, Japan	Facility for manufacturing mechanical components	1,280	Apr. 2013	Mar. 2014
JTEKT (Thailand) Co., Ltd.	Bangpakong, Thailand	Facility for manufacturing mechanical components	7,800	Apr. 2013	Mar. 2014