Financial Overview

(in million JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	251,943	272,488	(7.5)	-
Operating income	12,824	16,796	(23.6)	-
Ordinary income	13,050	15,983	(18.4)	-
Current net income	6,095	9,940	(38.7)	-
Automotive parts
Sales	193,721	217,524	(10.9)	-The number of vehicles produced in Japan during the first half of the year drastically dropped due to the huge impact that the Great East Japan Earthquake had on business. Then, during the second half of the year, the flooding in Thailand severely impacted operations by reducing delivery of supplies. As a result, sales of automotive anti-vibration rubber, hose, urethane interior parts, and noise-dampening materials were down year-on-year.
Operating income	9,058	13,440	(32.6)	-

Recent Developments Outside Japan

<Poland>
-The Company has won a first business from a European manufacturer to supply anti-vibration rubber. Based on the agreement, the company's production subsidiary in Poland will supply its products to the customer's plants in Europe, starting in the business year ending March 2014. Up until now, the Polish facility has been delivering its products mainly to Japanese automakers' European operations. Seeing the possibility that its current production capacity is not large enough to deal with the new business in the medium-to long-term run, the Company is now mulling the possibility of expanding its existing facility or establishing a new one in order to ensure stable supply. (From an article in the Nikkan Jidosha Shimbun on January 30, 2012)

<Brazil>
-The Company will enter into the Brazilian market as early as by March 2013. The company is going to acquire a local manufacturer to obtain its production and supply network of anti-vibration rubber and fuel hoses. Based on its plan, it has been in talks with several Brazilian suppliers since the second half of 2011. Negotiations are scheduled to be finalized by March 2013. In case it fails to find any supplier that meet its requirements, its alternate plan is to establish a new plant by itself, which will become Tokai Rubber's first production facility in Brazil. Japanese automakers are now working on increasing vehicle production in Brazil, while European manufacturers, to which the company aims to supply its products, are also operating their plants in the country. After acquiring a production base, Tokai Rubber will aim to establish an advanced production structure capable of achieving its high quality standards, and start production and delivery as soon as possible. In addition to its operations in Japan, the company has plants in North America, Europe, China and Southeast Asia. Tokai Rubber is now working on rapidly expanding production in emerging markets, planning production launch at its new plants in India and Indonesia during 2012. The Brazilian project is part of the company's initiatives to increase its presence in newly developing markets. Tokai Rubber is intending to invest 200 billion yen in Brazil over the next five years through fiscal year 2015, which includes amount to be paid for purchasing a production base. (From an article in the Nikkan Jidosha Shimbun on January 23, 2012)

<Germany>
-The Company announced on May 19 its decision to establish a representative office in Wolfsburg, Germany. The office will engage in research activities on customer needs and development trends in order to further promote business in Europe. The company has established in 1999 TRI (Poland) Sp.zo.o., which manufactures anti-vibration rubber goods for automobiles, and expanded its business overseas in the automotive field including anti-vibration rubber/hoses and other interior parts. While it had an outpost for information gathering in former Western Europe a few years ago, it will establish a new representative office so that it can respond quickly to local customer needs with an intention to make it a subsidiary in the future. (From an article in the Nikkan Jidosha Shimbun on May 20, 2011)

New Company

-The Company announced that it held a groundbreaking ceremony for its development company for automotive rubber and plastic products, Tokai Rubber Technical Center (China) Co., Ltd. (TRTC), in Jiaxing City, Zhejiang Province, China. The total investment in the new company amounts to approximately 42 million Chinese yuan (approximately 550 million yen), and the land area is about 5,000 square meters. TRTC, which will begin its operations in autumn 2012, will be the forth development center for Tokai Rubber Industries, following its development centers in Japan, the U.S. and Thailand. (From a press release on March 14, 2012)

Joint Ventures

-The Company held a ceremony to mark the opening of Tokai Jinrong Die (Tianjin) Co., Ltd. a joint venture to manufacture and sell stamping dies for molding anti-vibration rubber products. This is part of Tokai Rubber's strategy to put in place a structure to build high quality, yet low-cost stamping dies with the aim of expanding sales of competitive anti-vibration rubber products for automobiles in the global market. The joint venture company was formed by three parties composed of Tokai Rubber, its subsidiary TRI Metex and a Chinese local stamping parts supplier. It went into full production in December 2011 (From an article in the Nikkan Jidosha Shimbun on March 19, 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	270.0	251.9	7.2
Operating profit	13.5	12.8	5.5
Ordinary income	13.5	13.1	3.1
Net income	8.0	6.1	31.1

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

Mid-term Management Plan

-The Company is conducting its business based on its mid-term plan it formed in November 2011, the 2015 TRI-Group Vision, which is scheduled to end at the close of the 2015 fiscal year. The following figures are the targets set under the plan.

• Operating revenue: 420 billion yen
• Operating profit: 34 billion yen
• Profit margin: 8%
• ROE: 10%
• ROA: 8%

-Activities and developments in fiscal year 2012:

•  The Company established automotive-parts production plants in Indonesia and India, launching commercial operations there in order to respond to the robust demand in rapidly growing emerging-market countries. As a result, the Company strengthened its supply structure in developing countries.
• The Company set up a subsidiary in Shanghai, China to coordinate the distribution of materials and products from its production plants in China to its plants in Japan and other Asia countries, creating a pipeline for exporting.
• In Japan, the Company will reorganize its production structure in September 2012, consolidating the four, independently running business operations conducting product development, production, and sales activities into Fuji-Susono Works and the Company's subsidiary, TRI Oita AE, as a means of enhancing its productivity, as well as its product development and sales activities.
• The Company will continue to pursue every avenue to reduce costs.

R&D Expenditure

(in million JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	8,660	8,182	-
Automotive parts	6,770	6,596	-
Rubber products business	-	-	6,241

R&D Structure

-The Company's R&D activities are being conducted by its R&D center, called Technopia, which works together with the Materials R&D Center and New Business R&D Center. In March 2011, the Company set up its New Business Coordination Center and Automotive Coordination Center that work on establishing new lines of businesses and develop new products.

-The Company announced on June 16 it will set up a technical development center for automotive rubber and plastic products in Jiaxing City, Zhejiang Province, China to enhance local development capability. The new engineering facility will be built in the Jiaxing Economic Development Zone in July and go into operation in May 2012. It will be capitalized at 50 million yuan and invested wholly by Tokai Rubber Industries. (From an article in the Nikkan Jidosha Shimbun on June 17, 2011)

Capital Expenditure

(in million JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	20,191	14,938	10,277
Automotive parts	17,237	12,530	-
Rubber products	-	-	8,448

-The Rubber Products Business invested both in Japan and overseas mainly to upgrade equipment used for producing anti vibration rubber and hoses.

Investment Outside Japan

<India>
-The Company announced on March 2 that it had held a ceremony to mark the opening of its new plant in Karnataka in the south of India. When the vibration rubber supplier established Tokai Rubber Auto-Parts India (TRI) in 2008, the subsidiary inaugurated its operations by using a rental facility and equipment. However, as its operations expanded, it decided to build its own plant at a cost of about 1.3 billion yen to supply products to local automakers, including Toyota, Suzuki, Honda and Nissan. TRI's new plant is the second local facility established by the Tokai Rubber group. It is also considering setting up another plat in the suburbs of Delhi, India's capital, in the medium run. The plant has a land of about 40,000 square meters and buildings of about 8,000 square meters. Its employees will number 210 in 2015. (From an article in the Nikkan Jidosha Shimbun on March 3, 2012) 

-The Company announced on August 25 that it has constructed a new plant in India for production of anti-vibration rubber for automobiles in the suburbs of Bangalore in the south. The Tokai Rubber Group, which has been engaged only in assemblies of anti-vibration rubber products  in India, will be moving into full scale manufacturing operation to expand its supply capacity. The Group has been operating at two locations in India, by establishing a subsidiary Tokai Imperial Rubber India Private Ltd. for manufacture of rubber hoses for automobiles in 2005 and a second subsidiary Tokai Rubber Auto Parts India Private Ltd. for manufacture and sales of anti-vibration rubber products in 2008. A new plant will go into full operation in January 2012. The new plant has land of about 40,000 square meters and a building of about 8,000 square meters. It will increase its employees to 210 in 2015, aiming to achieve about 700 million rupees (approximately 1.2 billion yen) in sales in the year. (From an article in the Nikkan Jidosha Shimbun on August 26, 2011)

<Indonesia>
-The Company announced on July 14 that it will establish a new plant in Indonesia for production of anti-vibration rubber for use in automobiles. It is a third plant in Indonesia for the company, which has just recently decided on construction of a plant for producing plastic hoses for motorcycles in the country. The new company "PT. Tokai Rubber Indonesia (TRID)" will be built at the KIM Industrial Park in Karawan, West Java in August. Capitalized at $11.5 million (approx. 960 million yen) it will be invested wholly by Tokai Rubber. Vibration absorbing rubber products for automobiles in Indonesia are now supplied by PT. Fukoku Tokai Rubber (Indonesia), a joint venture with Fukoku Co., Ltd. By establishing TRID, Tokai Rubber will expand local production capacity of automobile rubber products to respond quickly to needs of customers. The new plant with a building of 7,680 square meters in an area of 50,000 square meters is scheduled to go into operation in 2012. The company expects to employ about 300 workers and generate 310 billion rupees (approx. 3 billion yen) in sales in fiscal 2015. (From an article in the Nikkan Jidosha Shimbun on July 15, 2011)

-The Company said on July 7 that it will set up a subsidiary in Indonesia for plastic fuel hose production for automobiles. A new plant will begin hose production for motorcycles in November to serve Japanese-affiliated motorcycle makers. Production for vehicles will follow. The new company PT. Tokai Rubber Auto Hose Indonesia will be located in the Cikarang-Jababeka Industrial Park in Bekashi, West Java. It will be established by the end July with a capital of $4.5 million to be wholly invested by Tokai Rubber. (From an article in the Nikkan Jidosha Shimbun on July 8, 2011)