Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	62,023	55,276	12.2	1)
Operating income	7,909	7,012	12.8	-
Ordinary income	9,129	7,943	14.9	-
Current net income	5,591	4,646	20.3	-

Factors
1) Sales
<Japan>
-The Company faced a problem with the supply chain that was impacted by the Great East Japan Earthquake and the flooding in Thailand. However, once this problem was resolved, the Company was able to maintain its normal rate of operations and expand operations into diversified, new fields of business. As a result, sales increased year-on-year.

<Asia>
-Even though the pace of growth in the region showed signs of slowing, the Company's operations in Asia still saw year-on-year increases, thanks to the continued market growth still occurring in countries such as China.

<North America>
-The Company's business got back on track after it won huge, new orders, which contributed to greater operating revenue year-on-year. Nevertheless, operating profit was down year-on-year because of the disruption in the supply chain caused by the Great East Japan Earthquake.

New Company

-The Company announced that it will establish a new company in Indonesia, which will produce piston rings for engines of automobiles and motorcycles. The new company will be capitalized at approximately 16.2 million USD, approximately 1.3 billion yen. Production will begin in March 2013, and its annual production is estimated to be 24 million piston rings in 2014. (From a press release on December 26, 2011)

Acquisition

-The Company announced on Feb. 28 that it will purchase 57.39% of all issued shares of Faltec Co., Ltd., Saiwai-ku, Kawasaki, Kanagawa Pref., which will then be its subsidiary. It will pay 8.1 billion yen to an investment fund, which currently holds 72.8% of Faltec shares, to purchase the shares. It does not plan to change Faltec's management through the ownership. TPR specializes in manufacturing engine parts. While the company expects that demands for engine parts should grow for the immediate future with expanding automobile demands in emerging markets, it also predicts that demands for engine parts should decline in the long term along with increasing HVs, which should reduce the number of engine cylinders, and with growing EVs. TPR has acquired some businesses in the past in order to increase its long-term management stability and this time, the investment fund has proposed the stock transfer. The shares will be transferred in early April. (From an article in the Nikkan Jidosha Shimbun on March 1, 2012)   

Restructuring

-The Company and Nippon Piston Ring Co., Ltd. (NPR) said that they have reached a basic agreement to dissolve their joint-venture contract in Indonesia. The two companies have been conducting piston ring business through their joint-venture unit, NT Piston Ring Indonesia (NTRI). NPR will now acquire all NTRI shares, making it its wholly owned subsidiary, while the Company will create a new production company, TPR Indonesia. By separating their operations and establishing independent businesses in the country, each company aims to respond to growing local demand more efficiently and thereby increase sales. TPR Indonesia will manufacture and sell piston rings for vehicles and motorcycles, starting in March 2013. Its production volume is expected to reach 24 million units in 2014. (From an article in the Nikkan Jidosha Shimbun on January 5, 2012)

Outlook for FY ending Mar. 31, 2013

(in billion JPY)

	FY ending Mar. 31, 2013 (Estimate)	FY ended Mar. 31, 2012 (Result)	Rate of Change (%)
Sales	138.0	62.0	122.5
Operating income	11.9	7.9	50.6
Ordinary income	12.9	9.1	41.4
Net income	6.7	5.5	19.9

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	1,892	1,869	1,841

R&D Facilities

-R&D activities are conducted at the Technical Center located within the Nagano Plant.

R&D Activities

-The Company worked on developing new products from a variety of aspects. These included lower friction, heat control, lighter weight, cleaner exhaust gas emissions, and alternate fuels (bio-fuels, CNG).
-The Company, in working to make products that have even greater levels of precision, developed new production methods that automate inline measuring, radically reduce costs, and minimize energy used in production operations.
-In order to quickly respond to the needs arising in line with the growth of electric vehicles, the Company is strengthening its capabilities in non-powertrain products. As a result, the Company focused its energy in introducing new technology in seals that mainly include rubber and composite products made lighter in weight by the use of aluminum and plastics. In this regards, the Company is building its R&D framework to create functional, cost-competitive products ahead of its customers, while exploring new business sectors.

R&D Achievements
<Powertrain components>
1) Piston rings
-Development of super low friction rings, which are designed to improve fuel economy.
-Development of thin, highly-functional oil rings, which are designed to improve reliability.
-Creation of a production line that is designed to radically reduce the production costs of piston rings.
 
2) Cylinder liners
-Commercialization of liners for small engines. These liners are smaller in diameter, have super thin walls, are lightweight, and have superior heat-conducting properties, enabling them to respond to the needs for greater output and improved fuel consumption and reliability.
-Commercialization of low friction bore liners, which are designed to improve fuel efficiency.

3) Valve seats
-Commercialization of valve seat materials which are capable of responding to the need for alternative fuels. These materials are highly resistant to abrasion.

<Other than powertrain components>
1) Aluminum-based products
-Commercialized a motor frame for EV motors by creating a new casting method and installing equipment.
-Commercialized an aluminum brake drum and bearing-cap by applying a centrifugally casted spiny shaped FC material.

2) Sintered mechanical parts
-The Company commercialized a seal-ring for turbochargers.
-Development of a processing method that improves the accuracy and enhances the strength of shock absorbers and coupling components

3)  Plastic and rubber products
-Commercialized plastic seal-rings for transmissions.
-Created greater precision electromagnetic valve spool rubber seals.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Japan	3,066	1,482	-
Asia	1,097	1,501	-
North America	319	139	-
Others	0	13	-
Overall	4,483	3,136	2,003

-The Company made continued investments in its operations overseas, spending to revamp and improve production facilities so as to increase production capacities. 

Planned Capital Investments (Automobile related product business)

(As of Mar. 31, 2012)

Name/ Name of the company	Location	Type of facility and purpose	Planned investment (millions of JPY)	Planned construction start date	Planned completion	Increased capacity upon completion
Nagano factory	Nagano Pref., Japan	Facilities for producing piston rings, conducting R&D activities, etc.	1,100	Apr. 2012	Mar. 2013	No impact on production capacity
TPR Industry Co., Ltd.	Yamagata Pref., Japan	Facilities for producing cylinder liners, and new applied products	1,200	Apr. 2012	Mar. 2013	No impact on production capacity
TPR Vietnam Co., Ltd.	Binh Duong, Vietnam	Facilities for producing cylinder liners	600	Jan. 2012	Dec. 2012	100% increase
Anqing TP Goetze Liner Co.,Ltd.	Anhui Province, China	Facilities for producing sintered alloy parts	570	Jan. 2012	Dec. 2012	15% increase