Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	133,605	62,023	115.4	1)
Operating income	10,085	7,909	27.5	-
Ordinary income	11,833	9,129	29.6	-
Net income	5,569	5,591	(0.4)	-

Factors
1) Sales
<Japan>
-Sales decreased year-on-year in Japan because of negative currency translation based on the high valuation of the yen in the first half of the year and the drop in product orders that resulted from the political tensions between Japan and China during the second half. This was in spite of increased sales as a result of the recovery in new-vehicle production volumes at OEMs in Japan.

<Asia>
-Even though sales to Chinese OEMS remained stagnant, sales for the year were higher because of the Company's winning new product orders.

<North America>
-Sales increased year-on-year because of the recovery in sales of Japanese-brand vehicles and higher new-vehicle sales at US-based OEMs.

Acquisition

-The Company acquired 1.7 million shares in Faltec Co., Ltd., making it into its subsidiary. The transaction was completed on April 5, and TPR now holds 65.0 percent of the total voting rights of Faltec. Faltec's wholly owned subsidiaries in the U.K. and China have also been turned into specified foreign subsidiaries of TPR. (From an article in the Nikkan Jidosha Shimbun on April 7, 2012)

Joint Ventures

<U.S.A.>
-The Company announced on April 24 that the Company and Federal-Mogul will establish TPR Federal-Mogul Tennessee, Inc., a joint venture to manufacture cylinder liners in the U.S. The new production company will be capitalized at 20 million dollars (approximately 1.6 billion yen), of which 53.9 percent will be invested by TPR America Inc., and 46.1 percent by Federal-Mogul Powertrain, Inc. Production is scheduled to begin in May 2013 with a plan to manufacture 12 million units in 2014. (From an article in the Nikkan Jidosha Shimbun on April 25, 2012)

Business Plan

-The Company announced its mid-term business plan for FY 2012 through 2014 featuring sales expansion in Asia and diversification of its business including resin parts. (From an article in the Nikkan Jidosha Shimbun on Jun. 18, 2012)

• In its core business of powertrain related parts, it will build its second U.S. cylinder liner plant in Tennessee, scheduled for operation in May 2013.
• In Indonesia, it will build a new piston ring plant to replace the joint venture with Nippon Piston Ring Co., Ltd. dissolved in order to establish better operations. Production will start in Mar. 2013.
• Concurrently, the Company will promote diversification by expanding its businesses other than engine parts, including automotive resin parts of its subsidiary TPR Enpla Co., Ltd. and industrial rubber seals of TPR Sunlight Co., Ltd.
• The Company is searching for possibilities in streamlining the administrative functions together with FALTEC Co., Ltd., which became its subsidiary in April, in addition that they should jointly work on innovative technologies and development of parts. While setting "exterior parts/resin parts" and "engine parts" as two focuses of its business, the Company will develop technologies to support weight reduction and environmental responsiveness of vehicles on global basis in order to win new orders.

Major Contracts

-The Company has been awarded a contract to supply piston rings for Nissan's and Mitsubishi Motors' new mini-vehicle model scheduled for release in May 2013. The Company's piston rings will be used in the minicar's new, high-performance engine developed at NMKV Co., Ltd., a mini-vehicle joint venture by Nissan Motor and Mitsubishi Motors. Both automakers are the Company's customers. Following the new model launch in May, the two OEMs are planning to put the second generation of the mini-vehicle on the market by March 2014, which is expected to further boost the volume of requirements for piston rings. The piston rings will be manufactured at the Company's Nagano Plant and delivered to Mitsubishi Motors' Mizushima Plant where the mini models will be assembled. (From an article in the Nikkan Jidosha Shimbun on Feb. 26, 2013)

Outlook for FY ending Mar. 31, 2014

(in millions of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	140,000	133,605	4.8
Operating income	11,900	10,085	18.0
Ordinary income	12,600	11,833	6.5
Net income	5,600	5,569	0.6

>>>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
Total	4,034	1,892	1,869
-TPR Group	1,921	1,892	1,869
-Faltec Group	2,060	-	-

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 and low LOC (lubricating oil consumption) rings which are designed to improve fuel economy.
-Development of 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 a new liner material designed for alternative fuels, which demonstrates highly performance in terms of corrosion and abrasion resistance.
-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.
-Development of a new production line with innovative features that remarkably lower costs, enabling the production of low-priced products.

<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 small sized 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, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Japan	2,514	3,066	1,482
Asia	2,767	1,097	1,501
North America	973	319	139
Others	47	0	13
Faltec Group	3,666	-	-
Total	9,968	4,483	3,136

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

Investment Activities Outside Japan

-The Company is poised to expand its production capacity of cylinder liners in the U.S. and China. Plans are to double its capacity in the U.S., while boosting the level by 50 percent in China by 2015. In response to growing use of engine blocks made of lightweight aluminum alloy, the Company is developing and producing the ASLOCK cylinder liner. (From an article in the Nikkan Jidosha Shimbun on Jan. 11, 2013)

• U.S.A.: In May 2013, the Company is going to launch operations at its new plant in Tennessee, U.S.A., which is its second joint venture with Federal-Mogul Corporation. The facility will be dedicated to manufacturing the ASLOCK cylinder liners. With this expansion, The Company's monthly production capacity in the U.S., including that of its existing plant in Minnesota, is expected to increase from present 1.1 million units to 2.2 million units by 2015. While expanding supply to Japanese automakers, the company is looking to start supplying the new cylinder liners to U.S. automakers as well.
• China: the Company is going to install a new production line at its subsidiary in Anhui Province to raise its monthly capacity to 1.8 million units in 2015 from current 1.2 million units. This will allow the Chinese subsidiary to meet growing demand from Chinese local automakers as well as facilities of the U.S., European and Japanese OEMs.

Planned Capital Investments (Automobile related product business)

(As of Mar. 31, 2013)

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
The Company Nagano factory	Nagano Pref., Japan	Facilities for producing piston rings, conducting R&D activities, etc.	1,000	Apr. 2013	Mar. 2014	No impact on production capacity
TPR Industry Co., Ltd.	Yamagata Pref., Japan	Facilities for producing cylinder liners and conducting R&D activities	1,200	Apr. 2013	Mar. 2014	No impact on production capacity
PT. TPR Indonesia	West Java, Indonesia	Facilities for producing piston rings	1,600	Jan. 2013	Dec. 2013	100% increase
Anqing TP Goetze Liner Co.,Ltd.	Anhui Province, China	Facilities for producing cylinder liners	1,000	Jan. 2013	Dec. 2013	15% increase