Financial Overview

(in million JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Sales	2,568,779	2,159,942	18.9	-
Operating income	120,058	76,790	56.3	-
Ordinary income	145,354	94,116	54.4	-
Net income	66,748	37,955	75.9	-
Automotive Business
Sales	1,350,124	1,070,650	26.1	-Sales and income from wire harnesses increased year-on-year, thanks to robust sales outside Japan such as in North America and Asia, favorable currency translation because of the weak yen, and successful cost-reduction initiatives. -Tokai Rubber Industries, as a result of being acquired by the Company, added to the consolidated business performance and achieved higher sales and income year-on-year.
Operating income	71,781	53,116	35.1

Joint Venture

<Russia>
-The Company and Sumitomo Wiring Systems, Ltd. (SWS) will start producing automotive wiring harnesses in Russia by the spring of 2014. The Company and SWS will establish a joint venture in August 2013 with OAO Zavod Radioapparatury (ZRA), a manufacturer of communication devices and wires in Russia. The new JV will utilize ZRA's existing manufacturing plants in Russia. The Company's Group has been operating a sales subsidiary in Russia, but this will be the first production base for wire harnesses in the country. To expand sales, the Company and SWS will promote its products to automakers that have presence in the Russian market. (From an article in the Nikkan Jidosha Shimbun on July 6, 2013)

Business Plan

Entering into automotive battery market
-The Company enters the automotive battery market for electric vehicles and plug-in hybrid vehicles. The Company developed a battery which can supply electricity both to vehicles and home appliances. In anticipation of an increase in demand for electricity supply to home appliances from vehicles, the firm aims to receive orders from automakers as soon as possible. (From an article in the Nikkan Jidosha Shimbun on December 5, 2013)

Outlook for FY ending Mar. 31, 2015

(in million JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ended Mar. 31, 2014 (Actual Results)	Rate of Change (%)
Sales	2,700,000	2,568,779	5.1
-Automotive Business	14,000	13,510	3.6
Operating income	125,000	120,058	4.1
Ordinary income	142,000	145,354	(2.3)
Net income	110,000	66,748	66.3

-Sales in the automotive business for the fiscal year ending March 2015 are forecast to increase due to continued, robust demand for wire harnesses and products manufactured by Tokai Rubber Industries. Initiatives for both of these businesses are outlined below:

• Wire harness: Continue to focus on R&D and sales of lighter weight, aluminum harnesses, and low-environmental-impact high voltage harnesses.
• Tokai Rubber: Create maximum synergy with the anti-vibration rubber/hose business that was acquired in 2013 and establish a supply network worldwide as a global supplier.

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

Mid-term Management Plan

-In 2013, the Company released the "17 Vision," its mid-term business plan for fiscal 2013 through fiscal 2017. Financial targets are as follows:

(in billion JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ending Mar. 31, 2016 (Targeted)	FY ending Mar. 31, 2018 (Targeted by end of Mid-term Plan)
Sales	2,700.0	2,600.0	3,000.0
Operating income	125.0	130.0	180.0
Operating profit margin	4.6%	5.0%	6.0%

Automotive Business
-In order to meet the targeted objectives outlined in its mid-term management plan, the Company will further expand its operations involved with its mainstay product items, namely harnesses, connectors, and anti-vibration rubber; based on the following strategies.
1) Increase the share of sales to non-Japanese OEMs

• Increase its market share of harnesses, connectors, and anti-vibration rubber

2) Speed up new product development

• Better respond to the need for weight reduction (aluminum harnesses, etc.) and more modularization
• Increase sales of electronics products (central gateways, etc.)
• Develop and commercialize products for next-generation and eco-friendly vehicles (products for idling stop systems, etc.)

3) Reduce costs

• Pursue the idea of producing products at the optimum locations
• Enhance technology on automation

R&D Expenditure

(in million JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	99,520	94,287	86,582
-Automotive Business	62,069	57,866	49,017

-The Company plans to invest JPY 98,000 million for oveall R&D expenditure during FY ending Mar. 2015, of which JPY 61,000 will be allocated to Automotive Business.

R&D Activities

Wire harnesses / In-vehicle electronic equipments
-R&D activities are mainly conducted at AutoNetworks Technologies, Ltd., which is jointly owned by the Company and Sumitomo Wiring Systems, Ltd. R&D activities are mainly focused on developing new products meeting safety, comfort and environmental needs.

-Wire harnesses:

• The Company is building harness architectures that can be mounted in next-generation vehicles' onboard systems, conducting R&D activities on elemental technologies needed to meet this need. 
• Also, in order to reduce vehicle weight and be environmental friendly, the Company is developing lighter weight harnesses. It has succeeded in this area, developing and starting mass-production of harnesses using aluminum, which is lighter in weight than copper.
• Moreover, the Company is continuing its R&D activities on high-voltage harnesses and connectors for the growing EV/HEV sector.

-In-vehicle electronics devices:

• The Company is now developing electronics devices such as PDs (power distributors) and next-generation in-vehicle LAN (Local Area Network) units in order to respond to the rapid advances taking place in IT. The Company is also launching systems with advanced features and/or networking capabilities.

-Rubber products:
-The Company is conducting advanced R&D activities on technology that can reduce costs, comply with environmental concerns, enhance riding comfort, and be applied globally.

Capital Expenditure

(in million JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	150,823	147,883	135,039
-Automotive Business	88,237	76,914	60,498

-The Company invested in the automotive business to increase production and improve the efficiency of wire harnesses and vibration isolating rubber.

Investment Plan (FY ended Mar. 31, 2015)

-The Company plans to invest JPY 160,000 million.
-Its Automotive Business Division plans to invest JPY 85,000 billion mainly in its facility that produces wire harnesses and vibration-isolating rubber.