Financial Overview

(in millions of JPY)

	FY ended Oct. 31, 2012	FY ended Oct. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	139,687	125,098	11.7	1)
Operating profit	11,517	9,182	25.4	-
Ordinary income	12,430	9,907	25.5	-
Net income	6,753	5,798	16.5	-

Factors
1) Sales
<Japan>
-Sales in Japan totaled 60,920 million yen, up 10.1 percent from last year's result due to a recovery in vehicle production volumes in Japan. Operating profit increased by 31.6 percent year-on-year to 65,780 million yen.

<North America>
-Sales in North America reached 48,714 million yen, up 17.2 percent year-on-year, thanks to the increase in vehicle production volumes in the U.S. Operating profit increased by 48.8 percent year-on-year to 3,084 million yen.

<China>

-Sales in China increased 11.0 percent year-on-year to 23,803 million yen because of a recovery in vehicle production volumes by Japanese automakers. Operating profit rose by 15.2 percent year-on-year to 2,241 million yen.

<Asia>
-Sales in Asia increased 6.3 percent from the previous year's result to 23,879 million yen, thanks to buoyant demand in the market. Operating profit, however, decreased 10.1 percent year-on-year to 1,846 million yen. The fall was due to the yen appreciation, which raised the prices of materials procured from Japan.

<Europe>
-Sales in Europe totaled 3,813 million yen, up 3.3 percent from the previous year's result, mainly because of a recovery in production volumes by major customers. The Company posted an operating loss of 85 million yen in the region, mainly because of a rise in imported materials prices, as value of the Hungarian forint dropped. (The Company posted an operating profit of 14 million yen in fiscal year ended October 2011.)

Outlook for FY ending Oct. 31, 2013

-The Company expects its sales to be 132,100 million yen, and its operating profit to be 10,810 million yen.

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

R&D Expenditure

(in millions of JPY)

	FY ended Oct. 31, 2012	FY ended Oct. 31, 2011
Japan	472	558
North America	248	249
China	150	-
Asia	156	163
Total	1,028	971

R&D Structures

<Japan>
-Research and development activities are conducted at the following operations. Focus is set on development of new materials, technologies and products in the areas of automotive components, industrial equipment and home-related equipment.

• R&D Group
• Systems Planning Group
• Cable Design Group
• Utsunomiya Technical Center

<North America>
-Engineers at the Automotive Center of HI-LEX Controls Inc. are developing new technologies and products targeted at the automotive industry in North America.

<China>
-Engineers at Chongqing HI-LEX Cable System Group Co. Ltd. are developing new technologies and products targeted at the automotive industry in China.

<Asia>
-Major development activities are conducted at Daedong HI-LEX Inc. Focus is set on developing new technologies and products, especially in the area of automotive door modules.

R&D Facilities

-The Company is planning to establish a new development and sales office in Bayern, Germany in February 2013.

R&D Activities

New materials
-The Company is developing new, environmentally friendly materials such as anti-freeze grease. For the purpose of expanding their cable applications, it is also developing ultrathin cables made from nonferrous metal by leveraging its expertise developed over the years.

New technology
-The Company is developing high performance and lightweight cables, window regulators with a new structure, and power-saving control units.

New products
-The Company is working on development of high value-added products. In the area of door opening/closing systems, it is mass-producing power liftgates with a function to hold the door in a desired position.

Capital Expenditure

(in millions of JPY)

	FY ended Oct. 31, 2012	FY ended Oct. 31, 2011
Japan	1,251	682
North America	1,414	1,119
Asia	1,239	1,487
China	720	463
Europe	230	74
Total	4,855	3,826

-The Company is investing in plants in equipment to expand capacity and streamline operations.

-Major investment activities in business year ended October 2012 included installing new equipment at Daedong HI-LEX Inc.

Investment Outside Japan

<Russia>
-In 2012, the Company announced a plan to establish HI-LEX RUS LLC in Russia in December 2012. The new subsidiary, which will be capitalized at 160 million rubles (approximately 400 million yen), will manufacture and sell control cables and window regulators. Production operations are scheduled to start in May 2015, primarily for supply to AvtoVAZ. 

Capital Investment Plans

(As of Oct. 31, 2012)

Company name (Location)	Type of project	Planned total investment (in million yen)	Project period		Increased capacity upon completion
			From	To
PT. Hi-Lex Indonesia Cikarang Plant (Bekasi, Indonesia)	Plant expansion and equipment installation	591	2010.08	2013.02	30% increase in production capacity
HI-LEX Mexicana, S.A. de C.V. El Marques Plant (Queretaro, Mexico)	New plant	289	2012.10	2013.04	25% increase in production capacity
HI-LEX India Private Ltd. Gurgaon Plant (Haryana, India)	Plant expansion and equipment installation	981	2012.07	2013.09	78% increase in production capacity
Guangdong HI-LEX Cable System Co. Ltd. Main Plant (Guandong, China)	Plant expansion	542	2012.09	2013.04	144% increase in production capacity
Chongqing HI-LEX Cable System Group Co. Ltd. Main Plant (Chongqing, China)	Plant expansion	764	2012.09	2013.06	130% increase in production capacity