Financial Overview

(in million JPY)

	FY ended Oct. 31, 2013	FY ended Oct. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	164,956	139,687	18.1	Although sales were negatively affected by the termination of the eco-car incentive program in Japan, overall sales increased year-on-year thanks to strong sales outside Japan.
Operating profit	13,877	11,517	20.5	-
Ordinary income	17,089	12,430	37.5	-
Net income	10,623	6,753	57.3	-

New Company

-The Company announced its plans to establish a new subsidiary HI-LEX RUS LLC in Samara Oblast, Russia. The new company will manufacture and sell control cables and window regulators for use in automobiles. It will be capitalized at RUB 160 million, approximately JPY 400 million, 90 percent of which will be owned by HI-LEX Corporation. Production is scheduled to start in May 2015, primarily for supply to AvtoVAZ. Sales are expected to reach RUB 882 million, about JPY 2.5 billion, in fiscal year 2016. (From a press release on December 14, 2012)

Outlook for FY ending Oct. 31, 2014

-The Company expects its sales to be JPY 176,800 million, and its operating profit to be JPY 15,520 million.

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

R&D Expenditure

(in million JPY)

	FY ended Oct. 31, 2013	FY ended Oct. 31, 2012	FY ended Oct. 31, 2011
Japan	881	472	558
North America	252	248	249
China	311	150	-
Asia	186	156	163
Total	1,632	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.

<Europe>
-Engineers at HI-LEX Europe GmbH are designing and testing new products targeted at global strategic vehicles produced by European and U.S. automakers.

R&D Activities

New materials

-In order to help automakers offer a quiet cabin, the Company developed low-vibration, low-noise cables by using plastic materials with high levels of lubricating and vibration-insulation properties.

New technology
-The Company developed high-performance cables, lightweight materials and weight-saving designs. It also developed sensors for various system products. 

New products
-The Company developed and commercialized electric parking brake systems for commercial trucks.

-The Company developed power lift gate systems and power sliding door systems with improved safety, convenience and design features.

Capital Expenditure

(in million JPY)

	FY ended Oct. 31, 2013	FY ended Oct. 31, 2012	FY ended Oct. 31, 2011
Japan	2,038	1,251	682
North America	1,986	1,414	1,119
Asia	1,441	1,239	1,487
China	1,848	720	463
Europe	400	230	74
Total	7,715	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 2013 included establishing new plant of HI-LEX Mexicana, S.A. de C.V.

Capital Investment Plans

(As of Oct. 31, 2013)

Company name (Location)	Type of project	Planned total investment (in million JPY)	Project period		Increased capacity upon completion
			From	To
HI-LEX India Private Ltd. Chennai Plant (Tamil Nadu, India)	New plant and equipment installation	948	2013.11	2014.12	150% increase in production capacity
Daedong HI-LEX of America Inc. Main Plant (Queretaro, Mexico)	Plant expansion and equipment installation	528	2013.10	2014.03	-
Chongqing HI-LEX Cable System Group Co. Ltd. Main Plant (Chongqing, China)	Plant expansion and equipment installation	1,151	2012.08	2014.10	170% increase in production capacity
Changchun HI-LEX Auto Cable System Co. Ltd. Main Plant (Changchun, China)	Plant expansion and equipment installation	686	2013.10	2014.10	640% increase in production capacity