Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of change (%)	Factor
Overall
Sales	70,721	60,384	17.1	-
Operating income	6,805	3,026	124.9	-Income increased year-on-year due to more aggressive initiatives to reduce total costs throughout the Group.
Ordinary income	7,151	3,140	127.7	-
Net income	4,483	1,655	170.9	-
Automotive parts
Sales	66,281	55,799	18.8	1)
Operating income	6,154	2,482	147.9

Factors
1) Automotive parts
-Production volumes in Japan for the entire year increased slightly year-on-year, with sales during the first half of the fiscal year rising because of the demand created by government-sponsored eco-car sales incentive programs. The sales didn't drop sharply even after the sales incentives ended in the 2nd half of the year.

-Overseas business performance improved tremendously year-on-year because of the rapid economic recovery that took place in the North American market, and the strong market growth seen in developing countries in Asia.

Start supplying body sealing to Chinese local manufacturer

- The Company has been awarded a contract to supply automotive body sealing products to a Chinese local manufacturer, starting in 2013. Although the company has already been providing body sealing products from its China Plant to Japanese joint ventures operating in China, this is the first time to deal with a Chinese company. The Company produces body sealing products in Shanghai and Guangzhou (Guangdong Province). The Shanghai facility supplies its products to the joint-venture facilities of Toyota, Nissan, Honda and Mazda, while the Guangzhou facility delivers its products to Honda's joint-venture plant. The Company is now poised to expand business with local manufacturers with the aim of establishing a strong foothold in the market to achieve sustainable growth. (From an article in the Nikkan Jidosha Shimbun on April 17, 2012)

Maintain collaborative relationships with Cooper Standard Automotive

<Mexico>
-Nishikawa of America, Inc. (NOA), the Company's wholly owned subsidiary in the U.S., will transfer the 20 percent share it has in Cooper Standard Automotive Sealing de Mexico S.A. de C.V. (CSM) to Cooper Standard Automotive (CSA), its joint venture partner. In November 2011, NOA established Nishikawa Copper Mexico S.A. de C.V. (NCM) by providing 100 percent of the capital. Having gained its own foothold in the Latin American market, the company has decided to sell all its CSM shares. CSM, which was formed in 1995, is currently owned 80 percent by CSA and 20 percent by NOA. Meanwhile, CSA is planning to invest 20 percent in NCM when its commercial operation starts in 2013. Nishikawa Rubber and CSA will thereby maintain their collaborative relationships. (From an article in the Nikkan Jidosha Shimbun on Sep. 14, 2012)

-In Feb. 2013, the Company held an opening ceremony of the Nishikawa Cooper Mexico S.A. de C.V., in Guanajuato, Mexico.

Recent Development Outside Japan

<Indonesia>
-In January 2013, the Company established  PT. Nishikawa Karya Indonesia, a joint-venture company, in Sumedan, West Java, Indonesia. It aims to develop a stable production structure in the fast growing market in order to meet the needs of its major customers, while expanding its automotive rubber and plastic parts business in ASEAN countries. The new company is capitalized at 16 million dollars (approximately 1,250 million yen), of which 80 percent will be invested by Nishikawa Rubber and 20 percent by PT. Karya Putra Sangkuriang, a local manufacturer.

<Korea>
- The Company announced that it will dissolve effective August 31, 2012 its Korean affiliate Nishikawa Bussan Korea Inc., which is a consolidated subsidiary of Nishikawa Rubber. Nishikawa Bussan Korea, which was established in March 2011, is engaged in production, processing and distribution of rubber and plastics for automotive and construction use. (From a press release on August 23, 2012)

Outlook for FY ending Mar. 31, 2014

(in millions JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	73,900	70,721	4.5
Operating income	6,700	6,805	(1.5)
Ordinary income	7,000	7,151	(2.1)
Net income	4,400	4,483	(1.9)

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	250	214	230
Automotive parts	171	140	149

 

R&D Activities

Developing Technology to Reduce Product Weight
-In responding to the need to create lighter weight products, the Company has already established specifications for weight-reducing standards based on developing technology that enables it to use plastic materials, which are especially being called upon to reduce the weight of glass-run channels, door inner seals, and trunk seals; and technology that enables it to create thinner-walled and foam-molded products. It is currently commercially producing these and expanding their content rate on new-model vehicles.
-The Company is currently working on reducing product weight based on the concepts of "less", "hybrid", and "module".
-The Company is reducing the weights of various materials used for seals.

Developing Technology to Improve Sound-proofing Performance
-In order to improve the sound-proofing performance of door-hole seals and enhance the sound-proofing performance of non-door parts, the Company is continuing its R&D activities on combining foam-forming technology with non-standard materials. In FY ended Mar. 31, 2013, it launched the sale of two anti-noise products that were not designed for doors.
-The Company is continuing to develop door-seal materials and optimize combinations of products so that they do not lose their sound-proofing performance, aiming to improve their cost performance.

Developing Technology to Reduce Environmental Impact
-The Company is studying material recycling in order to effectively use resources.
-The Company is developing next-generation materials to reduce material loss/waste, make seal-material production lines more energy-efficient, and create materials for eco-friendly cars like electric vehicles; and developing new materials using plant resources.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	5,409	3,617	2,324
Automotive parts	5,305	3,483	-

Automotive parts
-The Company invested in facilities and equipment to produce new-type seals. It is also investing to rationalize its operations under the aim of lowering costs.

 

Planned Capital Investments

(As of Mar. 31, 2013)

Plant	Equipment to be introduced	Estimated amount of investment (in million JPY)	Project Period
			From	To
The Company
Shiraki Plant (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals and Components for general industry	424	Dec. 2012	Mar. 2014
Asa Plant (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals and Components for general industry	958	Dec. 2012	Mar. 2014
Yoshida Plant (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals and interior/exterior components -Manufacturing equipment for exterior walls for housing	579	Dec. 2012	Mar. 2014
Mihara Plant (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals. -Manufacturing equipment for exterior walls for housing	453	Nov. 2012	Mar. 2014
Others	-Buildings and R&D equipment and others	743	Jan. 2013	Mar. 2014
Domestic subsidiaries
Nishikawa Bussan (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals and dies	124	-	Mar. 2014
Seiwa Kougyo Co., Ltd. (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals and Components for general industry	52	Mar. 2013	Mar. 2014
Nishikawa Big Ocean Co., Ltd. (Hiroshima Pref., Japan)	-Manufacturing equipment for automotive seals	146	Mar. 2013	Mar. 2014
Nishikawa Rubber Yamaguchi (Yamaguchi Pref., Japan)	-Manufacturing equipment for automotive seals	142	Mar. 2013	Mar. 2014
Overseas subsidiaries
Nishikawa Cooper LLC. (Delaware, USA)	-Manufacturing equipment for automotive seals	1,661	Dec. 2012	Dec. 2013
Nishikawa Tachaplalert Cooper Ltd. (Nakhonratchasima, Thailand)	-Manufacturing equipment for automotive seals	991	Dec. 2012	Dec. 2013
Shanghai Nishikawa Sealing System Co., Ltd. (Shanghai, China)	-Manufacturing equipment for automotive seals	651	Dec. 2012	Dec. 2013
Guangzhou Nishikawa Sealing System Co., Ltd. (Guangzhou, China)	-Manufacturing equipment for automotive seals	105	Dec. 2012	Dec. 2013
Nishikawa Cooper Mexico S.A. de C.V. (Guanajuato, Mexico)	-Buildings and manufacturing equipment for automotive seals	1,125	Sep. 2012	Dec. 2013
PT. Nishikawa Karya Indonesia (West Java, Indonesia)	-Buildings and manufacturing equipment for automotive seals	1,360	Jan. 2013	Dec. 2013