Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Sales	236,665	206,050	14.9	1)
Operating income	8,084	4,315	87.3	-
Ordinary income	7,269	3,402	113.7	-
Net income	2,423	518	367.8	-

Factors
1) Sales
<Japan>
-Operating revenue in FY ended Mar. 2014 fell 0.2%, down to 89.2 billion yen, the result of the Company's small product range for light and hybrid vehicles, and its customers' shifting operations from exporting vehicles from Japan to building them outside Japan. This resulted in fewer product orders in Japan.

<North America>
-Operating revenue grew 24.8% year-on-year to 122.8 billion yen, thanks to a weak yen to dollar and increased orders driven by demand from customers making new-vehicle purchases.

<Europe>
-Operating revenue increased 51.7% year-on-year to 7.4 billion yen. From the third quarter and after in Europe, there were signs of a recovery in automotive demand, which until then had been sluggish. In addition, favorable currency translation was a factor to the better performance.

<China>
-Operating revenue surged 78.1% year-on-year to 10.8 billion yen, thanks to a recovery in orders from Japanese OEMs, greater orders because of new model launches, and positive currency translation.

<Thailand>
-Operating revenue increased 21.4% year-on-year to 6.2 billion yen due to favorable currency translation.

<Indonesia>
-Operating revenue increased 19.2% year-on-year to 15.7 million yen, thanks to increased orders from Japanese OEMS and favorable currency translation.

Major Contracts

-In 2013, the Company has been awarded a new contract to supply brakes for General Motors' vehicles based on a global platform. Akebono will produce the brakes in the U.S. and China, planning to start delivery in the fall of 2014. General Motors is Akebono's largest customer, sales to which accounted for 24 percent of the Group's overall revenue in FY2012. Up until now, Akebono has been supplying mainly to the U.S. automaker's facilities within the U.S. The new program supporting the OEM's global platform will further expand Akebono's business with the major customer. (From an article in the Nikkan Jidosha Shimbun on Jun 25, 2013)

-In 2013, the Company announced that it would supply its brake systems for the McLaren P1, an ultra high-performance road car from the British sports car brand. Since establishing collaboration with Vodafone McLaren Mercedes in 2007, the company has been developing high-performance braking technologies to support the Formula 1 team to compete in a series of international car racing. Based on its midterm business strategy, the company aims to differentiate its products and technologies from those of its competitors. Winning a program for the ultra high-performance McLaren P1 has created a significant milestone for the company, as it is looking to expand business for high-performance road cars. (From an article in the Nikkan Jidosha Shimbun on Feb. 28, 2013)

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)

	FY ending Mar. 31, 2015 (Outlook)	FY ended Mar. 31, 2014 (Actual Results)	Rate of Change (%)
Sales	243,000	236,665	2.7
Operating income	11,000	8,084	36.1
Ordinary income	9,500	7,269	30.7
Net income	4,000	2,423	65.1

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

Mid-term Management Plan

-The Company announced its mid-term management plan, called Global 30, which outlines long-term plans that are set to end at the close of fiscal year 2020, which ends in March 2021. One of the targets under the Plan is to raise the Company's global market share of disc brake pads sold to OEMs to 30%.

-In order to achieve the objectives of Global30, the Company revised the schedule, making a new mid-year management plan, called Akebono New Frontier 30 - 2013 that sets fiscal year 2015 (ending March 2016) as the final year. The major points are outlined below:
1) Differentiate technology designed for the future

• Launch brake operations for mass-market, high performance vehicles
• Establish a supply network that can deliver to global platforms
• Develop low-cost brakes for developing countries
• Establish technology that can respond to next-generation environmental needs; increase facilities producing next-generation friction materials

2) Efforts and developments overseas for revolutionary cost reductions

• Reduce costs based on product sharing and standardization
• Establish an organizational structure in North America and Europe, which can generate profits
• Review the operating structure, aligning it with demand; and review resource distribution

3) Speed up the migration of global operations so they are based on Japan, the U.S.A., Europe, and Asia, and not only Japan, the U.S.A and Europe.

• Expand operations into developing countries
• Establish a global supply network and R&D structure

-Numerical Targets

(in 100 millions of JPY)

	-	Mid-term Management Plan		Long-term vision
	FY ended Mar. 31, 2014 (Actual Results)	FY ended Mar. 31, 2015 (Outlook)	FY ended Mar. 31, 2016 (Target)	FY ended Mar. 31, 2021 (Target)
Sales	2,367	2,430	2,500	3,000
Operating income	81	110	200	360
Operating Profit Margin	3%	5%	8%	12%
Market share of OE disc-brake pads	-	-	20%	30%

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	2,338	2,304	1,747

R&D Structure

Name	Location	Remark
Japan
Development division	Hanyu, Saitama Pref.	-
Ai-Ring (Test Course)	Iwaki, Fukushima Pref.	Largest-scale test course in Japan among domestic auto-parts suppliers' facilities
Akebono Research & Development Centre Ltd.	Hanyu, Saitama Pref.	-Materials development: control of specially-made friction, low environmental impact, crisis management -Next-generation friction materials development: compact, light-weight, high performance -Friction behavior research: friction behavior mechanisms -Process development: productivity, low environmental impact
North America
Akebono Engineering Center	Michigan, USA	-
Europe
Akebono Europe S.A.S.	Gonesse, France	-
Akebono Advanced Engineering (UK) Ltd.	Wokingham, UK	-
China
China Technical Center	-	-

R&D Activities

<Japan>
Friction materials for brakes
-Development of high-quality products (mainly high-performance brake-pads for passenger cars and low-cost brake-pads) that provide superior performance in terms of noise and vibration, and which reduce wheel dust (a phenomenon that has recently become the focus of attention), and which use safe frictional materials that take environmental concerns into account.
-Develop new friction materials that comply with recently enacted environmental regulations on friction materials in several U.S. states, including Washington.

Disk brakes/drum brakes
-Developed aluminum alloy opposed-piston brakes as a means of enhancing performance and reducing costs.

Motorized technology
-Electric brakes that can be controlled by electric signals coming from small electric motors placed in the brakes.
-Development of technology on electric parking systems in which only the parking function has been motorized.

Akebono Engineering Center
-Conducts the following R&D projects:

• Proprietary lubricating material that helps control NVH and friction.
• Developed environmentally low impact materials designed as strategic materials that prevent drying
• Reduction of cast-rare-earth metals
• Functional particles for developing operations in new business fields.
• Relationship between frictional materials and loss (reduction) of frictional behavior
• Surface processing technology designed to achieve zero-emission

<North America>
Friction materials
-Development of friction materials that provide superior performance in terms of noise and vibration, and which comply with new environmental regulations on friction materials.

Brake design/structural development
-Development of light-weight, aluminum alloy disk-brake

<Europe>
-Development of friction materials that meet strict, environmental regulations in Europe; friction materials that meet regulations on European vehicles exported to Japan and the U.S.A.
-Akebono Advanced Engineering (UK) Ltd.: development of disc-brakes designed for motor sports; specializing in development of disc-brakes for high-performance vehicles

<China>
Disc-brakes
-Research and analysis on Chinese market needs and how products are being used, to develop products that can be delivered at low cost but which still provide needed features and performance

<Thailand>
-Established R&D center focused on needs of countries in the ASEAN Region; in January 2014

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Total	21,800	19,800	14,300

-The Company invested the following amounts in facilities and equipment in its global operations: Japan: 5.3 billion yen, North America: 13.0 billion yen, Europe: 600 million yen, Indonesia: 1.1 billion yen, China 1.5 billion yen, and Thailand: 300 million yen.

-Investment projects are as follows:

• Japan: facilities to produce next-generation friction materials
• North America: new operations and plant building in Mexico
• Europe: facilities for R&D activities
• Indonesia, Thailand, China: capital investment to increase production in order to meet the rise in product orders

Planned Capital Investments

(As of Mar. 31, 2014)

Company/plant (Location)	Facilities & Activities	Total investment (millions of yen)	Start date	Completion
Headquarters and other facilities (Tokyo, Japan)	Casting production facilities, equipment for new production methods, information equipment	3,116	Apr. 2014	Mar. 2015
Development division (Saitama Pref., Japan)	Testing and R&D facilities, high-performance brake development facilities	1,768	Apr. 2014	Mar. 2015
Akebono Brake Iwatsuki Manufacturing Co., Ltd. (Saitama Pref., Japan)	Production facilities manufacturing disc brakes and drum brakes	529	Apr. 2014	Mar. 2015
Akebono Brake Fukushima Manufacturing Co., Ltd. (Fukushima Pref., Japan)	Production facilities manufacturing brake linings, industrial machinery, and railway products	207	Apr. 2014	Mar. 2015
Akebono Brake Yamagata Manufacturing Co., Ltd. (Yamagata Pref., Japan)	Production facilities manufacturing disc brake pads	676	Apr. 2014	Mar. 2015
Akebono Brake Sanyo Manufacturing Co., Ltd. (Okayama Pref., Japan)	Production facilities manufacturing disc brakes and drum brakes	329	Apr. 2014	Mar. 2015
Akebono Research & Development Center Ltd. (Saitama Pref., Japan)	Testing and R&D facilities	21	Apr. 2014	Mar. 2015
Akebono Brake Corporation (Michigan, USA and others)	Facilities to conduct R&D activities, and manufacture disk-brakes, drum-brakes, and disk-brake pads	4,237	Jan. 2014	Dec. 2014
Akebono Brake Mexico S.A. de C.V. (Guanajuato, Mexico)	Facilities to manufacture disk-brakes, drum-brakes, and disk-brake pads	891	Jan. 2014	Dec. 2014
Akebono Europe S.A.S. (Gonesse, France and others)	R&D facilities, production facilities manufacturing disc brake pads	560	Apr. 2014	Mar. 2015
Akebono Advanced Engineering (UK) Ltd. (Wokingham, UK)	Facilities to develop high-performance brakes	5	Apr. 2014	Mar. 2015
Akebono Brake Slovakia s.r.o. (Trenčín, Slovakia)	Production facilities for manufacturing disc brakes	648	Apr. 2014	Mar. 2015
Akebono Corporation (Suzhou) (Suzhou, China)	Production facilities for manufacturing disc brake pads	1,337	Jan. 2014	Dec. 2014
Akebono Corporation (Guangzhou) (Guangzhou, China)	Production facilities for manufacturing disc brakes and drum brakes	779	Jan. 2014	Dec. 2014
PT. Akebono Brake Astra Indonesia (Jakarta, Indonesia)	Facilities to produce disc brakes and disc brake parts	440	Jan. 2014	Dec. 2014
Akebono Brake Thailand Co., Ltd. (Chonburi, Thailand)	Production facilities for manufacturing disc brakes	1,231	Jan. 2014	Dec. 2014