Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	42,904	44,768	(4.2)	-
Operating income	3,136	3,775	(16.9)	-
Ordinary income	3,209	3,856	(16.8)	-
Current net income	2,042	2,504	(18.5)	-

Highlights for FY ended Mar. 31, 2013
1) New program business
-The Company was successful in winning a large volume of new program business as a result of its dynamic sales activities directed toward truck makers, construction and industrial equipment/machinery makers, and engine manufacturers.

2) Cost reduction initiatives
-The Company, which worked to reduce its cost structure company-wide, lowered the costs for materials, improved productivity, and strove to achieve effective cost control by lowering expenses.

3) Development of low-priced products and eco friendly products
-For Japanese and non-Japanese truck OEMs, production and industrial equipment OEMs, and engine manufacturers, the Company is actively working to develop low-cost and eco-friendly products. The Company is developing products that have developing-country specs that need to satisfy low-price requirements, already winning firm orders to deliver some of these products.

4) Expanding business overseas
-In order to respond to the growing demand for commercial-vehicle parts at its plants in China and India, the Company established a joint venture in China, FAW Sihuan Brake, to manufacture and sell commercial-vehicle brakes and related products. In India, the Company turned its joint venture, TBK India Private Ltd., into a subsidiary last fiscal year. The Company is now building a new plant there and strengthening its business organization/foundation. In addition, the Company also strengthened the business operations at its subsidiaries in Thailand, China, and the U.S.A.

Entering into development and production of components for passenger vehicles

-The Company is entering into development and production of components for passenger vehicles. The company is going to engineer components such as electric pumps for HVs and EVs by leveraging its technical expertise in the truck, bus, and construction machinery fields. Some of TBK's brake parts have already been used in passenger vehicles as common automotive parts, but this is the first time for the company to develop products exclusively for passenger vehicles. The company is now stepping up sales activities and preparing production lines for the new products, as it aims to start mass-production during the next fiscal year. TBK will also accelerate commercialization of the heater unit and inverters it has already developed for passenger electric vehicles, while actively participating in auto exhibitions to introduce its new technologies. (From an article in the Nikkan Jidosha Shimbun on Sep. 6, 2012)

Restructuring

-Zhejiang Asia-Pacific Mechanical & Electronic Co., Ltd. announced on January 4, 2013 that Hangzhou TBK-APG Brakes Co., Ltd. will be liquidated. Zhejiang Asia-Pacific Mechanical & Electronic now owns a 75 percent share in the joint venture with the Company, which also agreed to dissolve the joint- venture business during the contract period. Total assets at Hangzhou TBK-APG Brakes reached 43.34 million yuan as of the end of September 2012. Its sales during the January-September period in 2012 reached 40.23 million yuan. Zhejiang Asia-Pacific Mechanical & Electronic will assume all inventory, accounts receivable, and machinery and equipment of the join venture, planning to launch the APG brand at the new facility as of January 1, 2013. (From an announcement by the company, January 4, 2013)

>>>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
Brake production facilities	441	451	510
Engine Components and others	709	599	496
Total	1,150	1,050	1,007

-R&D expenditure on new product development amounted to 56 million yen in FY ended Mar. 31, 2013.

R&D Section

-The R&D activities are promoted by No.1 Development Dept., No.2 Development Dept., New Products Development Dept. and the Experiment Department.
-The Group has a total of 78 researchers, which account for about 5.4 percent of its entire workforce.

R&D Activities

-The Company has developed a new heating system for electric vehicles and hybrid electric vehicles. The new heating technology consists of a motor and a fan. The fan will blow the heat generated from the motor-drive unit and the coil to the cabin to provide improved energy efficiency. By comparison with conventional electric heaters having an energy efficiency of approximately 70 percent, the efficiency level of TBK's new technology is elevated to as high as 88 percent. In addition, the elimination of a heater core contributes to reducing the size and weight of the heater system, while enabling sharing of the fan with the air-cooling unit. The company will propose this new technology to automakers and suppliers of vehicle climate-control systems, aiming to turn it into a practical business solution as early as possible. (From an article in the Nikkan Jidosha Shimbun on Sep. 24, 2012)

Brake Business
-An increasing number of the Company's air wedge drum brakes, which all Japanese OEMs are  installing, are being equipped on more vehicle models produced by both Japanese and non-Japanese OEMs.
-The Company's next-generation brake, which is an air-disk brake, is now being developed as a module. The Company is now working on creating proprietary pads, rotors and other parts, and preparing for future applications.
-The Company streamlined the operations of its S cam brakes sold in developing countries in order to respond to a wider range of needs.
-The Company is conducting research and development activities, which are focusing on safer, environmentally friendly, and energy-saving products, accumulating its technology and passing it on to engineers for the future.

Engine Components
-The Company promoted the improvement and development of water and oil pumps for engines of small, medium, and heavy-duty vehicles and buses.

Other divisions
-The use of retarder has expanded for medium, and heavy-duty vehicles and buses, as it is regarded as a suitable device for engines designed to meet the exhaust emission regulations.
-The Company worked on enhancing its product mix of retarders, in addition to increasing the number of vehicle models on which they can be adopted.

Licensing of Technology to Other Companies

(As of Mar. 31, 2013)

Name of the contractor	Country	Contract item	Contract coverage	Contract period
TBKK (Thailand) Co., Ltd.	Thailand	Automotive brakes, camshafts, oil pumps, water pumps	1. To set the rights for establishing industrial property rights. 2. To supply technical information 3. To grant manufacture and sales licenses	Mar. 29, 1990 - 10 years from sales launch (then automatic extension every year)
Sangsin Brake Co., Ltd.	Korea	Brakes for large vehicles	Same as above	Jan. 14, 1994 10 years from mass production starting date (then automatic extension every year)
Full Win Developments Ltd.	China	Brake linings	Same as above	Aug. 1, 2002 10 years from the effective date (then automatic extension every year)
Hangzhou TBK-APG Brakes Co., Ltd.	China	Same as above	Same as above	July 30, 2003 10 years from mass production starting date (then automatic extension every year)
Chang chun TBK Shili Auto Parts Co., Ltd.	China	Friction materials for brakes used in commercial vehicles	Same as above	Dec.22, 2005 10 years from mass production starting date (then automatic extension every year)
TBK America, Inc.	USA	Water pumps and oil pumps for automobiles	Same as above	Nov. 15, 2006 10 years from the initial payment date (then automatic extension every year)
Sangsin Brake Co., Ltd.	Korea	Electromagnetic retarders	Same as above	From Sep. 30, 2010 10 years from mass production starting date (then automatic extension every year)
TBK India Private Ltd.	India	Water pumps and oil pumps for automobiles	Same as above	From Jun. 28, 2011 10 years from mass production starting date
Changchun FAW Sihuan TBK Co., Ltd.	China	Brakes for commercial vehicles	Same as above	From Jul. 5, 2012 10 years from mass production starting date (then automatic extension every year)

Capital Investment

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Automotive Components	2,899	2,376	1,296
-Japan	1,982	1,647	1,068
-Asia	873	687	209
-North America	55	40	18

Major investment projects
Japan: 646 million yen for engine component business, 444 million yen for brake business
Asia: 490 million yen for engine component business

Investments Outside Japan

<Asia>
-The Company is accelerating moves to boost its production capacity in Thailand and other Asian countries to meet growing demand for commercial vehicle parts from the overseas markets. The company, which mainly produces brakes and other products for trucks and buses, is going to invest 800 million yen each in its existing facilities in Thailand and China by March 2013. In addition, its new plant in India, which opened in September, is preparing to start deliveries as soon as possible, with its sales target for this fiscal year set at 500 million yen. Faced with falling demand in Japan, including that for knockdown kits, the company has been expanding offshore operations, while promoting local sourcing to improve profitability. (From an article in the Nikkan Jidosha Shimbun on Dec. 5, 2012)

<India>
-The Company is aiming to generate 3 billion yen a year in sales of heavy-duty vehicle components at its Indian subsidiary as early as 2015. In addition to supplying products to the local car industry, the subsidiary will also function as an export base for the European and the U.S. markets. With its new plant currently under construction scheduled to commence full-scale production around September this year, the company is poised to improve its cost competitiveness by increasing local sourcing, while hiking its production capacity. The new plant will supplement TBK's capacity to produce water pumps and oil pumps used in heavy-duty trucks in India, where it already manufactures these products at its existing local facility. As a result of the expansion, sales for this year are expected to reach approximately 700 million yen. In efforts to meet its targets, the company will step up marketing activities not only to truck manufacturers in Japan and India but also to those in Europe. (From an article in the Nikkan Jidosha Shimbun on July 18, 2012)