Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	1,079,497	964,295	11.9	-Sales rose due to increased production and improved currency translation.
Operating income	25,302	20,910	21.0	-Income increased due to greater production volumes and rationalization initiatives, although adjustments to product selling prices and increases in labor and other costs negatively impacted performance.
Ordinary income	33,914	23,225	46.0	-
Net income	15,792	3,232	388.6	-

Factors
<Japan>
-Operating revenue increased 8.7% year-on-year, to 621,933 million yen as a result of the eco-car sales incentives and increased production of the Aqua.
-Operating profit was 5,735 million yen, a 36.9% increase year-on-year, which is the result of increased production volume and other favorable factors.

<North, Central, and South America>
-Operating revenue rose 24.0% year-on-year, to 176,591 million yen, supported by production increases of the Toyota Corolla and RAV4.
-Even though the Company reported an operating loss of 3,493 million yen, it was an improvement by 2,435 million yen compared to the previous fiscal-year loss of 5,928 million yen. The costs involved with setting up Toyota Boshoku Do Brasil Ltda. contributed to the loss.

<Asia/Oceania>
-Operating revenue improved 11.4% year-on-year, to 278,578 million yen, as a result of increased production of the IMV, in addition to other factors.
-Operating profit, which was 28,174 million yen, rose 12.9% year-on-year because of increased production volume and other factors.

<Europe/Africa>
-Operating revenue reached 60,328 million yen, a 18.3% year-on-year increase, due to increased production of the Yaris being built in France, the Company’s acquisition of the interior business of POLYTEC Holding AG, and the launch of commercial operations at Boshoku Automotive Europe GmbH.
 -The operating loss grew even greater this past fiscal year, increasing by 3,097 million yen to 6,146 million yen, because of higher fixed costs. The operating loss in fiscal year 2011 was 3,048 million yen.

Recent Developments in Japan

-The Company announced its first launch of business operations in motor cores for hybrid vehicles (HVs). It developed and commercialized them by making effective use of its expertise gained in technology on processes involved in the precision stamping of seat recliners. The Company installed new facilities at its Saruge Plant, working on its own to create a seamless production system, enabling the Company to produce dies up to producing parts. The facility has an annual production capacity of 200,000 units. The Company started supplying the motor cores to the new Toyota Crown since December 2012. Until then, Mitsui Hi-tec had a virtual monopoly in terms of supplying motor cores designed for Toyota HVs, so Toyota Boshoku entered the market. (From a January 17, 2013 news article from the Nikkan Jidosha Shimbun)

Recent Developments Outside Japan

<Laos>
-The Company announced that it will establish a new plant in Savannakhet Province, Laos by April 2014. This is the first time for the company to set up a manufacturing base in the country. Plans include transferring part of cut-and-sew processes for seat covers to the new Laos factory from Toyota Boshoku's Gateway Plant in Thailand, which will undergo an expansion project to increase capacity. The seat covers manufactured at the new Laos plant will be supplied to the Thai facility, starting in April 2014. Toyota Boshoku plans to utilize the new plant as a satellite production facility to maintain its production volume and achieve cost reduction. With an investment of approximately 500 million yen, the new plant will be able to produce seat covers for 200,000 vehicles a year. (From an article in the Nikkan Jidosha Shimbun on Apr. 9, 2013)

<China>
-The Company announced that it will set up a new company in July to produce vehicle interior components in Shenyang City, Liaoning Province, China. Shenyang Toyota Boshoku Automotive Parts Co., Ltd., which will be its thirteenth production base in China, is scheduled to start production in 2016. The new Chinese unit will apparently supply the components to BMW's joint venture plant. It will be a wholly owned subsidiary of Toyota Boshoku (China) Co., Ltd., Toyota Boshoku's regional headquarters in China, with a capitalization of 140 million yuan or approximately 2 billion yen. It will hire 70 employees at the start of the production and produce headliners and door trims. (From an article in the Nikkan Jidosha Shimbun on Mar. 30, 2013)

-The Company announced its plan to move and expand its Shanghai regional headquarters, Toyota Boshoku (China) Co., Ltd., to strengthen its R&D development functions in China. With an investment of approximately 2 billion yen, the Japanese supplier plans to start construction of its new head office and R&D center in May, which will become operational in July 2014. Toyota Boshoku intends to establish the regional structure integrating all the stages from product design to evaluation at the new facilities. (From an article in the Nikkan Jidosha Shimbun on Mar. 1, 2013)

Contracts

-The Company is accelerating the development of new customers in the global market. Since 2012 when the company started to seek marketing opportunities worldwide, it has held six technical exhibitions in Japan, the United States, Europe, China, and Southeast Asia, targeting automakers other than Toyota. In addition, the company established special customer development teams in each region to approach various automakers which include European and U.S. automakers such as BMW, Japanese automakers including Nissan and Honda, and Chinese local automakers. Regarding business with Toyota, Johnson Controls Inc. is expanding its presence mainly outside Japan. Toyota Boshoku is poised to enhance its business structure by winning new orders from automakers other than Toyota, aiming to become more competitive. (From an article in the Nikkan Jidosha Shimbun on Jun 6, 2013)

-The Company announced that its innovative sports seat has been chosen for the F sports version of the new Toyota Lexus IS lineup. The sports seat is designed to conform to the contours of driver's and passengers' body, ensuring a comfortable fit to protect the shoulders and torso from gravitational pull during cornering. Instead of adopting conventional methods of attaching seat covers to pre-formed foam, the company created the new seat by utilizing the "foam in place method" where urethane is directly injected into seat covers that are placed inside metal molds. (From an article in the Nikkan Jidosha Shimbun on May. 28, 2013)

-The Company said it has won a first supply award from BMW's Chinese operations. The announcement was made by the company's president Shuhei Toyoda at a press meeting held in Toyota City, Aichi Prefecture on January 23. Toyota Boshoku will supply seat backboards for the BMW 5 series built in China. The seat products will be manufactured at a new, dedicated plant Toyota Boshoku is going to establish in Tianjin, China by March 2014. This is the first time for the Japanese supplier to set up a China factory devoted to serving the German automaker. (From an article in the Nikkan Jidosha Shimbun on Jan. 24, 2013)

Joint Ventures

-Toyota Boshoku Corporation's regional management hub in China, Toyota Boshoku (China) Co., Ltd., is establishing a new joint-venture with Guangzhou Automobile Group Component Co., Ltd. (GACC) this July.  The automobile interior parts manufacturing company will be located in Heyuan, Guangdong province, China. The new JV, Heyuan Toyota Boshoku Automotive Parts Co., Ltd., is capitalized at approx. USD 2.1 million (approx. JPY 200 million). The investment ratio is 75% by Toyota Boshoku with the remaining 25% by GACC. Approximately USD 4.14 million ( approx. JPY 400 million) will be invested in the plant. The building will cover about 8,700 square meters on about 17,000 square meters of property. The plant will start producing seat covers and other interior parts in September 2013. Its annual production capacity is 230,000 units and its products will be delivered to local seat manufacturer, Guangzhou Intex Auto Parts. The assembled seats will then be supplied to GAC Toyota Motor Co., Ltd. (From an article in the Nikkan Jidosha Shimbun on June 28, 2013)

-The Company announced that it will set up a new joint venture in Pakistan with a Pakistani automaker, Thal Limited, and Toyota Tsusho Corporation in August this year. While Toyota Boshoku has been manufacturing automotive seat frame parts destined for Pakistan at its plants in Thailand and other countries, it is planning to localize production by utilizing Thal's plant. The new joint venture, which will be called Thal Boshoku Pakistan (Private) Limited, will be Toyota Boshoku's first manufacturing site in the country. It will be owned 55 percent by Thal, 35 percent by Toyota Boshoku, and 10 percent by Toyota Tsusho, with its headquarters located within the premises of Thal in the city of Karachi. (From an article in the Nikkan Jidosha Shimbun on May. 10, 2013)

Joint Development

-The Company has co-developed improved soundproof technology for interior components with Autoneum Holding Ltd. of Switzerland and Nihon Tokushu Toryo Co., Ltd. The joint-venture is scheduled to begin in July 2012. Autoneum and Nihon Tokushu Toryo have combined their expertise to improve the clarity of conversations among passengers in a moving vehicle by 20%. The two companies are committed to developing soundproof components that reduce engine and wind noise in the passenger compartment that result from the addition of electric-power assist technologies. Toyota Boshoku is also partnering with Tokai Rubber Industries, Ltd. and Tokai Chemical Industries, Ltd. to improve ride comfort, safety and interior convenience. The company plans to do this by leveraging the conductive rubber and magnetic induction foaming technologies of their partners. (From an article in the Nikkan Jidosha Shimbun on Jun 19, 2013)

Restructuring

-The Company is postponing a stock acquisition of TB Kawashima to a later date in July or August. The deal was originally scheduled to be made on July 1, according to an announcement on May 27. The decision to postpone was made because approval had not yet been obtained by the government regarding the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade. Once permission is granted, the company will acquire TB Kawashima’s 20,000 new shares through third-party allocations. The acquisition cost will be JPY 1.285 billion. Toyota Boshoku will then increase its ownership in TB Kawashima to 56.7% from its current level of 39%. TB Kawashima’s wholly-owned subsidiary in the U.S., TB Kawashima USA Inc., will also become a subsidiary of Toyota Boshoku. (From an article in the Nikkan Jidosha Shimbun on July 5, 2013)

-The Company has reorganized its automotive interior system production in Turkey. TB Sewtech Turkey Ltd. was established as a Toyota Boshoku subsidiary to produce seat covers concurrently with an existing plant. The subsidiary has recently started manufacturing seat covers for the new Turkey-built Toyota Corolla. Toyota Boshoku expects that a partial relocation of labor-intensive seat cover production closer to the new Toyota plant (about 70km away) will reduce labor costs and increase accessibility to human resources. With intent to make TB Sewtech the base to supply seat covers to Europe, Toyota Boshoku will expand its customer base and product lineup. (From an article in the Nikkan Jidosha Shimbun on July 3, 2013)

Outlook for FY ending Mar. 31, 2014

(in billions of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ending Mar. 31, 2013	Change	Factors
Overall
Sales	1,100.0	1,079.4	20.6	-
Operating income	30.0	25.3	4.7	-
Ordinary income	34.0	33.9	0.1	-
Net income	16.0	15.7	0.3	-
Sales by segment
Japan	600.0	621.9	(21.9)	-The Company expects to improve operating profit in Japan by thoroughly rationalizing its operations, in spite of facing reductions in production volumes and revenue.
North, Central and South America	190.0	176.5	13.5	-The Company expects to reduce operating losses in the region by further changing its profit structure, even though it faces high costs in remodeling the Toyota Highlander and Corolla in the first half of the fiscal year.
Asia/Oceania	300.0	278.5	21.5	-Even though the Company expects to increase its production volume in the region, it will likely post lower operating profit for the year, as it spends more on strengthening the foundations for its profit structure in the future by trying to winning new customers in China (new company in Shenyang), opening an R&D center, and setting up a new company in Laos.
Europe/Africa	75.0	60.3	14.7	The Company expects to reduce operating losses in the region by increasing the revenue being generated by the Corolla being built in Turkey, increasing the revenue being generated by new customers of Boshoku Automotive Europe, and by improving its profit structure.

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	36,321	32,543	32,434

R&D Structure

-Complete product development in areas where customers are located, leaving cutting-edge and advanced R&D activities to be carried out in Japan.

Japan	-The Sanage Technical Centre (Aichi Pref., Japan) -Oguchi Development Centre (Aichi Pref., Japan) -Kariya Development Centre Research Laboratories (Aichi Pref., Japan)
North, Central and South America	Kentucky, USA
China	Shanghai, China
Asia/Oceania	Bangkok, Thailand
Europe/Africa	Zaventem, Belgium
Design studio	Milan, Italy

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Total	36,805	37,583	41,229

-The Company invested mainly to develop new products and rationalize and upgrade production facilities.

<Japan>
-The main investments in Japan were targeted to respond to the production of new products, rationalize/renew facilities, and establish TB Logistics Center Co., Ltd. The Company invested 18,866 million yen.

<North, Central, South America>
-The Company invested 5,222 million yen mainly to respond to the production of new products and rationalize/renew facilities.

<Asia/Oceania>
-The Company spent 9,316 million yen mainly to respond to the production of new products and rationalize/renew facilities.

<Europe/Africa>
- The Company invested 3,999 million yen mainly to respond to the production of new products, rationalize/renew facilities, and to prepare for commercial production at Boshoku Automotive Europe GmbH.

New Facilities

(As of Mar. 31, 2013)

Name	Location	Type of facility and activities	Planned investing amount (in millions of JPY)	Start	Finish
Sanage Plant	Aichi Pref. Japan	Manufacture of new types of seats and door trims; maintenance and renewal of existing facilities	6,576	April, 2013	Mar. 2014
Kariya Plant	Aichi Pref. Japan	Manufacture of new types of air filters; maintenance and renewal of existing facilities	2,732	April, 2013	Mar. 2014

Outlook of Capital Expenditure for FY ending Mar. 31, 2014

(in billions of JPY)

	FY ending Mar. 31, 2014 (Forecast)	FY ended Mar. 31, 2013 (Result)	Change
Japan	16.0	18.9	(2.9)
North, Central, South America	8.0	5.2	2.8
Asia/Oceania	18.0	9.3	8.7
Europe/Africa	9.0	3.4	5.6
Total	5.0	36.8	14.2