Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	782,299	748,249	4.6	-The number of vehicles sold by OEM customers increased. -The Company strengthened production operations in emerging-market countries, which are countries where demand is seen as raising.
Operating income	21,962	19,479	12.7	-Operating income increased because of growing product sales and activities designed to reduce the costs of goods, and lower fixed costs.
Ordinary income	22,027	18,693	17.8	-
Net income	24,284	15,598	55.7	-Net income rose substantially year-on-year due to the large proceeds gained from the sale of the former Tochigi Plant site.

Outlook for FY ending Mar. 31, 2013

(in billions of JPY)

	FY ending Mar. 31, 2013 (Outlook)	FY ended Mar. 31, 2012 (Result)	Year-on-year Fluctuation
Sales	810	782.3	27.7
Operating income	26	22	4
Ordinary income	25	22	3
Net income	15	24.3	(9.3)
Investment Expenditure	24	21.5	2.5
R&D Expenditure	26	23.5	2.5

Sales by Region

(in billions of JPY)

	FY ending Mar. 31, 2013 (Outlook)	FY ended Mar. 31, 2012 (Result)	Year-on-year Fluctuation
Japan	444	448.9	(4.9)
North America	187	151.3	35.7
Europe	82	80.2	1.8
Asia	149	155.4	(6.4)

 

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

Mid-term Business Plans

-The Company has mapped out a mid-term business plan called the CK G×4 T10, which covers a 6-year period from April 2011 through March 2017. Under the new plan, the company aims at becoming one of the top ten (T10) auto parts suppliers in the global market in terms of sales and operating profit, based on the prediction that global vehicle production will be reaching 95 million units in the near future. In order to achieve this target, the manufacturer is going to develop 10 new Green (G) products that are friendly to the environment. It will also aim to meet increasing demand from rapidly growing emerging countries by outsourcing production to its local plants. The G×4 stands for Green, Growth, Global and Great Company, four key words of the company's progress policy. (From an article in the Nikkan Jidosha Shimbun on July 21, 2011)

-The following are activities the Company conducted in the second year of its mid-term management plan aimed at strengthening sales in emerging-market countries.
1. Establishing corporations in Brazil and Russia:

• Calsonic Kansei do Brasil Ltda. (July 2012)
• Calsonic Kansei Rus LLC. (May 2012)

2. Enhancing the business operations at existing facilities:

• Greater production capacity in China and Mexico.
• Launch of production in China of compressors. (March 2012)

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Japan	21,310	18,820	-
North America	1,210	1,230	-
Europe	670	600	-
Asia	250	350	-
Total	23,460	21,010	21,197

R&D Structure

-The Company organized its R&D structure, creating a global R&D center concept based on consolidating R&D activities into three, core functions as follows: development technology (Saitama, Saitama Prefecture); testing (Sano, Tochigi Prefecture); and production technology (Yoshimi, Saitama Prefecture).

-In conducting activities according to its CK G×4 T10 mid-term management plan, the Company forged a policy to enhance its engineering functions emerging market countries.

• China: increase the number of R&D staff from the current 320 (as of March 31, 2012), to 409 by March 31, 2013.
• Mexico: increase the number of R&D staff from the current 31 (as of March 31, 2012), to 50 by March 31, 2013.

R&D Structure by Region

<Japan>
-As the center conducting R&D activities capable of responding to product requirements worldwide, it is in-charge of advanced, basic, and application development. The Company is adding more resources toward advanced and basic development activities, which create future development technology and are designed to enhance its competitive edge. 

-In order to strengthen its predominance in terms of product pricing, one element of product competitiveness, the Company has been working on ways to reduce the costs of goods. Making use of R&D capabilities in LLCs is one of these. Specific examples include transferring R&D responsibilities to its China Technical Center and CK Engineering Shanghai.

<North America>
-The Company makes use of its North American R&D capabilities to finalize product development based on discussions with local customers, after basic developments and application specs of vehicle product developments are decided in Japan. The R&D activities for products designed for the Mexican market are managed and operated in the North American Technical Center.

<Europe>
-The Europe Technology Center serves the same function as that of the North American one. The Center is in charge of one critical part of R&D activities for Renault, based on its partnership with the company.

<Asia>
-The importance of R&D in Asia is tied to the growth of the Chinese market. The Company is significantly expanding the R&D structure at its Asian Technical Center, which shares the role with the Japan Technical Center in developing products for the Chinese market, aiming to create a very efficient and cooperative R&D structure.

R&D Facilities

R&D Center	Saitama Pref., Japan
Test Center	Tochigi Pref., Japan
Production Engineering Center	Yoshimi, Saitama Pref., Japan

R&D Activities

Improving product competitiveness
-Developing components and systems that respond to environmental concerns. And example of these types of components include a heat exchanger that complies with the need for technology that is environmentally focused.
-Developing an exhaust system, and the components for it, which can improve fuel economy and exhaust purification performance.
-Developing highly advanced modular products as well as to develop components that are higher in performance and lighter in weight.
-Developing meters and information delivery systems that enhance safety.
-Developing air-conditioning systems that provide a comfortable driving environment.

Developing strategic products
-Developing systems and products for next-generation electric vehicles
-Developing technologies and products that reduce product weight so as to decrease CO2 emissions
-Developing low-cost vehicle systems and products for emerging markets

Product Development

Injection-molded panel skin
-The Company developed the world's first technology to injection-mold instrument-panel skin, under the aim of increasing the content ratio of soft-pad instrument panels. The Company was successful in improving product quality at an even lower cost basis. The Company has made it possible for all of its production facilities to produce these panels by using standard equipment. It plans to first launch production from China.

EGR cooler
-The company developed an ultra compact and light-weight EGR cooler, forecasting greater vehicle content of this cooler on gasoline-powered vehicles. Based on its recently developed VVG Fin, the Company has succeeded in creating the most efficient heat-exchange rate in the world.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Japan	7,300	6,700	-
North America	4,900	2,600	-
Europe	1,200	700	-
Asia	8,100	5,100	-
Total	21,500	15,100	16,000

-The Company invested mainly in its auto-parts business to augment and upgrade its testing facilities, in addition to investing in facilities and equipment (including intangible assets) to respond to vehicle model changes being made by its major customers.

-The Company invested 21,300 million yen in its auto-parts business, preparing facilities and equipment to handle the production of brand-new products, in addition to spending on facilities and equipment to produce products designed for electric vehicles. (FY ended Mar. 31, 2011: 14,900 million yen)

Outlook of Capital Expenditure

(in millions of JPY)

	FY ending Mar. 2013 (Outlook)
Japan	8,800
North America	5,800
Europe	1,700
Asia	7,700
Total	24,000

Investment Outside Japan

<China>
-The Company will set up a new company in Haimen City, Jiangsu Province, China in April 2011 to manufacture compressors for air conditioners. China is the fourth country for Calsonic Kansei to establish a compressor company, following Japan, Malaysia, and Thailand. The name of the new company is Calsonic Kansei (Haimen) Car Air-Conditioning Compressor Corporation and is 100% owned by Calsonic Kansei China Holding Company, the holding company of the Calsonic Kansei group companies in the China Region. The company is scheduled to commence its manufacturing activities from April 2012. The purpose of the establishment of the new company is to respond to the needs for the production increase of compressors in line with the increasing automotive demand in China. As the first phase, the company plans to manufacture 600,000 units of Aluminum vane rotary compressor a year. (From a press release on March 11, 2011)