Recent Years

Contracts

<Toyota>
-Toyota Motor Corporation, which plans to start production of the Lexus LFA sports car in December 2010, has been supported by the Company for achieving its aggressive vehicle performance targets for the model. The light-weight pedal unit was newly designed by the Company. (From an article in the Nikkan Jidosha Shimbun on Oct. 22, 2009)

-The Company announced that its new components have been selected for the electronic control brake system of Toyota Motor Corp. new Prius. The new Prius incorporates the Company's brake control modulator with hydraulic brake booster function, stroke simulator and assist hydraulic pressure generating unit. Its hydraulic brake booster has contributed to the system's weight reduction by 29% and downsizing by 35% compared to the previous system. The electronic control brake system jointly developed by the Company and Toyota coordinates the hydraulic brake and the regenerative brake to recover the braking energy most efficiently. (From an article in the Nikkan Jidosha Shimbun on May 30, 2009)

-The Company developed the world's smallest and lightest electronic stability control (ESC) modulator. This new system was installed as standard equipment on the new Toyota iQ. (From an article in the Nikkan Jidosha Shimbun on Oct. 21, 2008)

-The Company supplied electric parking brakes, electronic control brake systems and disc brakes for 2009 Lexus LS460.

-The Company, together with Toyota, jointly developed the world's first Crawl Control systems for the Toyota Land Cruiser released in September 2007. (From a press release on Oct. 18, 2007)

-The Company developed the next generation ADS-A2 ABS modulators and the ADS-V2G ESC modulators for use in the new Toyota Corolla. (From a press release on Dec. 18, 2006)

-With Toyota, the Company developed electric parking brake systems for the Lexus LS460, the first Japanese vehicle to offer the advanced parking brake technology. (From a press release on Oct. 30, 2006)

-The Company begins providing brake system modules for the "Camry" whose production will start this spring at Guangzhou Toyota Motor Co., Ltd. This is the first time for the Company to supply modules. Its "corner modules" consisting of disc brakes and drum brakes will be incorporated in the Camry. The brake system supplier plans to purchase components for brakes from an Aisin Group company in China and to provide master cylinders and ABS control units from Japan. Module production is scheduled to start in May 2006 with the sales target of 500 million yuan to achieve in 2010. (From an article in the Nikkan Jidosha Shimbun on Feb. 10, 2006)

<Nissan>
-The Company will supply its ESC (electronic stability control) embedded with an ITS (Intelligent Transport System) function for the new Nissan Fuga to be launched in autumn 2009. It has been selected for application in the advanced system to support the driver when taking a curve because of its high performances including responsiveness. Nissan will equip the new Fuga with the "Intelligent Pedal synchronized with the car-navigation," which will support the gas and brake pedal operation when entering the curve, based on the map data of the car-navigation system. It will also mount the "Active Stability Assist," which will control acceleration and braking in a curve in response to the vehicle behavior. Nissan has selected the Company's ESC and sensors as part of these advanced technologies.(From an article in the Nikkan Jidosha Shimbun on Aug. 25, 2009)

<GM>
-The Company announced that it won a contract award from General Motors to supply the full brake system, which includes hydro boosters and opposed-type calipers along with ABS, TCS, and ESC systems for the new Hummer H3 model. ADVICS has supplied ABS components and other brake parts to GM, but this is the first time for the Company to win a full brake system program from the U.S. automaker. (From a press release on Dec. 14, 2004)

Business Outside Japan

<China>
-The Company is sending a representative to China as early as at the end of 2009 to explore new business opportunities with Chinese local automakers. The Company is intending to search local makers' needs with an eye for the possibility of even setting up a new production facility in China. The supplier now depends 80 percent of its sales on the Toyota Group, and has been increasing sales as Toyota's business has been expanding. However, shrinking demand for automobiles worldwide is forcing the Company to seek new customers other than Toyota Group companies. Diversified customer base has long been a target of the Company ever since it was founded.(From an article in the Nikkan Jidosha Shimbun on Aug. 24, 2009)

<North America>
-In 2008, the Company will begin producing ESCs in North America. (From a press release on Feb. 5, 2007)

<Europe>
-In April 2008, the Company established the ADVICS Europe Office in Braine-1'Alleud, Belgium to conduct research activities and map out business strategies for the European market. (From a press release on Mar. 31, 2008)

Establishing New Subsidiaries

<China>
-In February 2004, the Company established ADVICS Tianjin Automobile Parts Co., Ltd. in Tianjin, China. (From a press release on Mar. 29, 2004)

-In November 2004, the Company established ADVICS Guangzhou Automobile Parts Co., Ltd. in Guangzhou, China. (From a press release on Mar. 24, 2005)

<Taiwan>
-In December 2005, the Company established ADVICS Taiwan Automotive Parts Co., Ltd., a wholly owned subsidiary, to develop and sell automotive brake systems and related components. The new entity is capitalized at 16 million New Taiwan dollars. (From a press release on Dec. 28, 2005)

Business Restructuring

-The Company and Aisin Seiki Co., Ltd. announced that they have agreed on a basic agreement to transfer part of Aisin's automobile brake production business to the Company. Through acquiring the production business in Japan, which had been an issue for the Company, it will be able to establish the foundation to achieve higher competitiveness with combined efforts with its own production operation. Aisin plans to transfer the production facilities and shares of stock related to Aisin's Kariya Plant (brake parts production), Kariya, Aichi Pref. and AS Brake Systems, Inc., Itami, Hyogo Pref. to the Company by April 1, 2010. Aisin's brake manufacturing company in Indiana, U.S.A. will also be transferred to the Company on July 1. The annual sales level of the production business to be acquired by the Company is 100 billion yen, which accounts for one third of its consolidated net sales. Approx. 1,500 employees in Japan and 500 employees in the U.S. will move to the Company, which will increase the company's human resources by 70%. (From an article in the Nikkan Jidosha Shimbun on Oct. 2, 2009)

-Aisin Seiki Co., Ltd. and the Company jointly announced a plan to merge their two brake parts and components suppliers in Tianjin, China. The two companies aim to expand their brake business in China through promotion of production rationalization and management efficiency. Tianjin Aisin Automobile Parts Co., Ltd. and ADVICS Tianjin Automobile Parts Co., Ltd. will be consolidated with the latter as a surviving company maintaining its name. A total capital of approx. five billion yen will be invested by the Company (50.1%), Aisin Seiki (47.2%) and Toyota Tsusho Corp. (2.7%) to establish the new company in July 2008. Brake boosters/master cylinders, disc brake calipers and parking brakes will be manufactured with expected sales of 1.36 billion Yuan or about 18 billion yen in FY 2008. Employees will total 1,400 by FY 2008. (From an article in the Nikkan Jidosha Shimbun on Dec. 6, 2007)

-Aisin Seiki Co., Ltd. and Sumitomo Electric Industries, Ltd. announced that the two companies have reached a final agreement to transfer Sumitomo Electric's automotive brake business to Aisin Seiki on October 1, 2007, Aisin Seiki and Sumitomo Electric jointly established ADVICS to produce and sell automotive brake systems. The two companies have agreed to transfer Sumitomo Electric's brake business to Aisin in order to improve business efficiency through integration of their automotive brake production businesses. (From a press release on Sep. 3, 2007)

Business Plans

-The Company aims to increase its share of the global brake market from a little over 10 percent (based on a prediction by ADVICS) to 15 percent by 2015. The Group, which generates 80 percent of its sales through business with Toyota today, plans to strengthen its marketing activities targeting automakers other than the Toyota Group, while further stepping up sales to this major customer. Based on this expansion plan, ADVICS aims to increase its consolidated sales by 40 percent (compared with FY2007's result) to 600 billion yen by fiscal year 2015. As competition with Europe- and US-based brake suppliers intensifies, the Company intends to boost sales by cultivating the European market, where it has a relatively low profile, and by reinforcing production and sale of components designed for the growing compact vehicle segment. Also, following Aisin Seiki increasing its shareholding in the company to 50 percent, ADVICS will enhance its collaboration with the Aisin Group to improve its business structure. (From an article in the Nikkan Jidosha Shimbun on Sep. 30, 2008)

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2010	FY ended Mar. 31, 2009	FY ended Mar. 31, 2008
Total	13,600	15,300	16,100

R&D Activities

-The Company is engaged in the pursuit of automotive driving performance, developing products that enable end-users to enjoy driving their cars worry free.
-The Company's recent achievements include an ESC (Electronic Stability Control) system and a braking energy regeneration system.

Product Development

ESC modulator
-The Company announced that it has developed the world's smallest and lightest electronic stability control (ESC) modulator, the ADS-V2P, and that the new system would be installed as standard equipment on the new Toyota iQ. The Company also improved its driving systems, modifying its control valve and motor to cut operating noise and improve brake response. (From an article in the Nikkan Jidosha Shimbun on Oct. 21, 2008)

Crawl control function
-The Company and Toyota have jointly developed the world's first Crawl Control for the Land Cruiser released in September, 2007, realizing drastic improvement in safety and convenience of off-road driving. The Crawl Control system supports the driver's driving control on road surfaces that require delicate speed control, such as sandy area and dirt roads. Crawl Control automates the acceleration and braking operation by ideally controlling the engine and brakes to minimize wheel skidding as much as possible. With this, the driver can concentrate on the steering wheel operation and enjoy easy driving and at the same time secure safety. Also, the speed selector switch enables selection of the optimum car speed for the road surface (1 to 5 km/h) from 3 levels, offering smooth running over any kind of road surface. This technology has been realized by adding newly developed software to the ESC system that utilizes Hydraulic Booster HB-Ci with high brake efficiency and high control response features. (From a press release on Oct. 18, 2007)

ABS and ESC modulators
-The Company has developed next-generation ABS and ESC modulators. These all-new ABS ADS-A and ESC ADS-V2G modulators are used in Toyota Motor's new Corolla. The ABS ADS-A2 modulator incorporates a motor drive system and control valves that have been altered, leading to a 20% reduction in weight and size (compared with its former modulator). The ESC ADS-V2G modulator uses the company's proprietary gear pumps to achieve superior quietness, and through the use of brake controls, it supports various extended functions such as the Radar Cruise Control and Pre-Crash Safety systems. Similarly, the ADS-V2G, thanks to the alterations to its motor drive system, control valves and other components, has also achieved a 20% reduction in weight and size (compared with its former modulator). (From a press release on Dec. 18, 2006)

Electric parking brakes
-The Company and Toyota jointly developed the Electric Parking Brake (EPB), a first for domestic cars, for the Lexus LS460. The EPB is a system that automatically activates the parking brake through a simple switch operation. Unlike traditional manual and pedal operated brakes, the actuator (motor) is driven to work the parking brake by a finger-operated switch on the dashboard panel on the driver's side. In addition, it adopts the shift-linked function that automatically actuates and releases the brake in conjunction with shifts, a world-first. In the shift-linked function, the parking brake is actuated by selecting the auto mode and moving the shift lever to the "P" position and released by moving the shift lever out of the "P" position. In addition to enhanced convenience, this system prevents human errors such as forgetting to release the parking brake. By removing the need for a parking brake pedal, a wider foot space is provided for the driver. (From a press release on Oct. 30, 2006)

Investments Outside Japan

<USA>
-The Company will begin mass production of ESC in the U.S.A. in 2008. ADVICSs will set up a production line with a capacity of 600,000 units per year at ADVICS Manufacturing Ohio, Inc. in Ohio by investing 37 million U.S. dollars. ADVICS aims to increase its sales in the North American market, centered around electronically controlled brake systems, from 680 million U.S. dollars (estimated sales for FY2006) to 1 billion U.S. dollars by around 2010. (From a press release on Feb. 5, 2007)

<China>
-In November 2004, the Company established ADVICS Guangzhou Automobile Parts Co., Ltd. in Guangzhou, China to produce and sell automotive brake systems and brake components. The new facility will start operations in August 2005 and launch production in May 2006. It is capitalized at 7.3 million U.S. dollars, of which 95 percent was invested by the Company and 5 percent by Toyota Tsusho. The company projects sales to reach 500 million yuan by FY2010. (From a press release on Mar. 24, 2005)

-In February 2004, the Company established ADVICS Tianjin Automobile Parts Co., Ltd. in Tianjin, China to manufacture and sell automotive brake systems and components. Operations will start in August 2004 and production will begin in February 2005. It capitalized at 12 million U.S. dollars, of which 95 percent was provided by ADVICS Co., Ltd. and the remaining 5 percent by Toyota Tsusho Corporation. The new plant targets generating sales of 900 million yuan by 2010. (From a press release on Mar. 29, 2004)