Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	599,615	504,518	18.8	1)
Operating income	36,706	20,415	79.8	-
Ordinary income	36,777	20,287	81.3	2）
Net income	21,429	8,971	138.8	-
Automotive component business
Sales	535,295	460,292	16.2	3)
Operating income	34,278	18,115	89.2	4)

Factors
1)
-Sales at the automotive components business increased year-on-year due to the increase in product demand that resulted from eco-car sales incentives and due to more new-model vehicles being launched by its major customers in North America. In addition, sales were higher also due to the very aggressive sales activities that the Company made to expand its business with non-Japanese OEMS. Also, sales were up at the optoelectronics business, thanks to greater demand for LED products for hand-held tablets and lighting.
2)
-Profits were up significantly year-on-year, supported by greater sales volumes at the automotive components business and optoelectronics business and by the very effective rationalization measures that the Company initiated Group-wide.
3)
-Operating revenue rose year-on-year because of the business recovery that took place after the Great East Japan Earthquake and flooding in Thailand. Also, sales grew because vehicle production volumes increased tremendously, driven by eco-car sales incentives; and because new-model vehicles were launched North America.
4)
-Achieved a tremendous increase in operating income because of greater sales volumes year-on-year and effective rationalization measures that were implemented.

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

Recent Development Outside Japan

- The Company will expand its plant in Indonesia that produces safety products by 2016. Annual production of airbags will increase to 1.5 million units and steering wheels to 800 thousand units. This is about 5 times and 1.5 times their respective levels today. This is in response to increasing demand from the introduction of the ASEAN NCAP automobile safety performance assessment program in January 2013.  Investments to expand buildings and install new equipment will amount to approx. JPY 800 million. Sales of the local subsidiary is expected to increase fivefold over 2012 levels to JPY 4.5 billion per year in 2016. (From an article in the Nikkan Jidosha Shimbun on July 3, 2013)

- The Company announced that it has relocated and expanded Tianjin Star Light Rubber and Plastic Co., Ltd., its sealing parts production joint-venture in Tianjin, China. The company has transferred the facility based on the redevelopment project of Tianjin City, while enlarging its plant to meet growing demand in the local market. The new plant has a building area of approximately 42,000 square meters, 50 percent larger than the previous facility. Its land area covers 78,000 square meters, which is 90 percent larger than the previous location with room for further expansion. Since 2000, when it first injected capital in the Tianjin manufacturer, the Company has been gradually increasing its investment ratio in the joint business to the current 51 percent. Tianjin Star Light Rubber and Plastic manufactures and supplies weather-strips and glass runs mainly to Toyota Motor Corporation and other Japanese automakers. It has also been providing products to Chinese OEMs such as Great Wall Motor Company, Ltd., increasing its supply volumes both to Japanese and Chinese customers. The new facility is located at the Zhong Bei Industry Area, Xi Qing Economy Development Zone, Tianjin. Sales at the joint venture with about 1,000 employees (as of March 2013) totaled approximately 6.9 billion yen in 2012. (From an article in the Nikkan Jidosha Shimbun on Jun 11, 2013)

- The Company announced its plan to set up a production subsidiary in Brazil around March this year. The establishment will mark the company's first foray into the Brazilian market. After expanding and revamping the second-hand plant building it acquired in Itapetininga in the State of Sao Paolo, the company is intending to commence production of weatherstrips, airbags, components around the instrument panel and other interior and exterior products at the facility, beginning in November 2014. Initially supplying its products to Toyota and Honda, the subsidiary is going to increase its customer base in steps, as it aims to achieve sales of about 2.7 billion yen a year by 2017. The new company will be capitalized at approximately 4 billion yen, including fund for facility investment. The Company will be investing 94.8 percent of the planned capital. The plant has a land area of approximately 220,000 square meters and a building area of approximately 10,000 square meters. It will hire about 140 people by 2017. (From an article in the Nikkan Jidosha Shimbun on Feb. 23, 2013)

- The Company is increasing its production and supply capacity in Europe and the U.S. In order to meet growing demand for fuel hoses from General Motors in the U.S., the Company's U.S. subsidiary began operations on its new production line in January this year. In Europe, the Company was awarded the first major contract from BMW in Germany. With this achievement, the Company will start manufacturing weather-strips for both BMW and MINI brands at its plants in the UK and the Czech Republic by FY2014. The Company intends to continue marketing activities to win more business from other OEMs, assuming that it will take a certain amount of time to accomplish its plans. (From an article in the Nikkan Jidosha Shimbun on Jan. 15, 2013)

- The Company announced that it will set up a new manufacturing plant for automotive interior and exterior components in Canada by 2013. The new plant, which will be a branch plant of the Company's subsidiary, TG Minto Corporation, is slated to be established in the city of Stratford, Ontario. With an investment of approximately 900 million yen, approximately 11 million CAD, the new plant is expected to start production instrument panel parts, pillar garnishes, and column covers, in July 2013. The new branch plant, which will be called TG Minto Corporation Stratford Factory, is going to be the company's fifth manufacturing plant in Canada. It aims to secure sales of around 1.2 billion yen, approximately 15 million CAD, by fiscal year 2014. (From an article in the Nikkan Jidosha Shimbun on Dec. 21, 2012)

Recent Development in Japan

- The Company announced that it will establish a wholly owned subsidiary in Osaki, Miyagi Prefecture as a regional headquarters in northeast Japan. TG East Japan is scheduled to be set up in January 2013 to support Toyota Motor, which is stepping up production in the northeast area based on a strategy to develop the region to its third largest manufacturing base in Japan. The subsidiary will serve as a front office and procurement department in the district. Its employees will work on quickly responding to quality-related requirements from customers, while conducting activities to assist its local suppliers. TG East Japan will be capitalized at 20 million yen. (From an article in the Nikkan Jidosha Shimbun on Nov. 29, 2012)

Contracts

- The Company is enjoying growing sales of its actuators for pop-up hood systems, which reduce the impact on a pedestrian in the event of a collision. The company initially supplied its hood-lifting actuators for the Mazda Roadster. Additionally, the Company won the second actuator contract for the new Toyota Crown released last December. As the global crash safety tests are slated to include some pedestrian protection criteria, the company is expecting further growth in demand for pop-up hood safety systems. Already having started full-scale supply to Toyota, the Company is accelerating expansion of its hood-lifting actuator business. (From an article in the Nikkan Jidosha Shimbun on Mar. 8, 2013)

Outlook for FY ending Mar. 31, 2013

(in million of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Actual Results)	Rate of Change (%)
Sales	620,000	599,615	3.4
Operating income	40,000	36,706	9.0
Ordinary income	41,000	36,777	11.5
Net income	24,000	21,429	12.0

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Automotive Parts Business	23,500	21,900	21,900
Non-Automotive Parts Business	3,600	3,900	3,600
Total	27,100	25,800	25,500

 

R&D Structure

-R&D activities are conducted globally through cooperation among several organizations within the Company: the R&D Center; Production Technology Development Center; Development, Engineering and Production Engineering Departments at each business segment; Technology Management Department; Material Engineering Department, and its subsidiaries outside Japan, namely Toyota Gosei North America Corporation, Toyoda Gosei Asia and Toyota Gosei Europe.

R&D Facilities

Kitajima Technical Center	Aichi Pref., Japan
Miwa Technical Center	Aichi Pref., Japan

R&D Activities

-The Company developed and launched production of the following new products/technologies:

• Pop-up-hood actuators (designed to enhance pedestrian safety)
• Spindle grilles
• Highly stylized, extremely high frequency covers
• Light-weight trim for openings
• Light-weight glass runs
• Plastic turbo pipes

-Development of materials, products, and production methods that are capable of complying with all aspects of environmental regulations.
-Development of all-composite, high-pressure hydrogen tanks for fuel-cell vehicles.

Patent License Contracts for Innovations in Technology

(As of Mar. 31, 2013)

Company	Country	Contract	Period
Autoliv Development AB	Sweden	A patent license agreement for curtain airbags.	Feb. 5, 2001 - Feb. 20, 2016
Stant Manufacturing, Inc.	USA	A patent license agreement for quick turn fuel caps.	Apr. 2, 2001 - Oct. 18, 2014
Intier Automotive Interiors of America	USA	A patent and expertise license agreement for urethane spray surfaces	Nov. 18, 2002 - May 10, 2014
Daimler AG	Germany	A patent for a cover used in millimeter-wave radar	Nov. 10, 2011 - Sep. 23, 2019

The following licensing agreement was terminated because the period of coverage came to an end.

Company	Country	Contract	Period
Eaton Corporation	USA	A patent license agreement for fuel valves.	Feb. 10, 1999 - Feb. 18, 2013

Technical Assistance Contracts

(As of Mar. 31, 2013)

Company	Country	Contract	Period
Stant Manufacturing, Inc.	USA	An expertise license agreement for conductive fuel caps	Nov. 17, 1998 - Dec. 21, 2018
Magna Steyr Fuel Systems	Germany	A patent license agreement for conductive fuel caps	Feb. 26, 2004 - Dec. 21, 2018
Orbitronics Co., Ltd.	Pakistan	An expertise license agreement for steering wheels	Dec. 29, 2006 - Dec. 28, 2014
Pong Codan Rubber (M) Co., Ltd.	Malaysia	A technological licensing agreement on weather-strips	Jul. 16, 2007 - Jul. 15, 2012

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Automotive Parts Business	37,400	33,100	36,100
Non-Automotive Parts Business	1,500	4,400	10,700
Group	39,000	37,600	46,900

-The company invested 39 billion yen mainly in its Automotive Parts Business and Optical Electronics Business.

Automotive Parts Business

-The Company spent 37.4 billion yen in capital improvements at its automotive components business in order to produce new products and increase the production capacity at plants, mainly overseas.

Capital Investment Plan (FY ending Mar. 31, 2014)

-The Company plans to invest a total of 43,500 million yen to install new and/or additional equipment and facilities, allocating 42,000 yen to the automotive components business for new equipment/facilities and dies.