Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of Change (%)	Factors
Overall
Sales	48,476	46,500	4.2	-To meet the exact needs of its customers, the Company continued to conduct sales activities, especially in developing countries.
Operating income	5,189	4,701	10.4	-The Company worked to effectively stream its operations.
Ordinary income	5,776	5,182	11.5
Current net income	3,757	3,404	10.4
Automotive Products
Sales	45,577	43,667	4.4	-The Company conducted aggressive sales activities, especially targeting developing countries, to expand its sales worldwide.
Operating income	5,775	5,170	11.7	-

Major Contracts

- The Company has been awarded new programs from Hyundai Motor to supply open/close mechanisms to the automaker's operations in India and China. The Japanese auto parts supplier has already provided these products to Hyundai's facilities in South Korea. In China, the company will deliver open/close components for glove boxes and other products to Beijing Hyundai Motor, starting in the middle of 2014. Production for the automaker's Chinese joint-venture will be handled at the Company's new plant in Wuhan City, Hubei Province, which will commence operations in April 2013. In India, the Company is manufacturing fastener products in Chennai mainly for supply to Japanese automakers. The new contract with Hyundai Motor will contribute to improving the Chennai facility's capacity utilization. (From an article in the Nikkan Jidosha Shimbun on Mar. 28, 2013)

Recent Development outside Japan

 <Korea>
- The Company aims to increase sales of automotive fasteners in Korea to 2 billion yen by FY2014, up 30 percent from the fiscal year ended March 2012. It is going to expand its supply volume to the Hyundai Motor Group, which is winning increased export orders. The Company is planning to move and expand its production facility in the country, looking to start new operations by March 2015. After the plant begins production, sales are expected to climb further to 3 billion yen, double the level of FY2011. The Company's Korean subsidiary, which was established in 1996, initially supplied its products mainly to Samsung Motors. Today, however, requirements are growing especially from the Hyundai-Kia Automotive Group, which is enjoying strong performances worldwide. In an effort to cope with a sharp rise in demand, the Company is accelerating its expansion projects. (From an article in the Nikkan Jidosha Shimbun on Sep. 7, 2012)

Materials Procurement

Begins Local Procurement of Plastics in India from 2013
- The Company will procure plastics for the production of fasteners locally in India from 2013. The company will reduce material costs by using low-cost materials with a certain level of quality, while raising the local content ratio to 80% or more. The Company launched production at its facilities in Chennai, South India, in June 2012. It supplies fasteners and other plastic parts mainly to Nissan, Honda Motor and Maruti Suzuki. Aiming to achieve 500 to 600 million yen in sales in fiscal 2014, the Company will procure materials from new suppliers and step up local procurement to further increase the earning power of its Indian operations. Materials purchased in India will also be exported to Japan, which will significantly lower the material costs of products made in Japan. (From an article in the Nikkan Jidosha Shimbun on Mar. 11, 2013)

Company Aims for Local Procurement Rate outside Japan of 20% in FY2015
- The Company is set to increase procurement of overseas materials like resin and special steel. It will begin to use materials from Korea in 2012, and in 2013 and onward from Korea, India and Southeast Asian countries aiming to reach a 20 percent overseas purchasing by 2015. The Company intends to accelerate cost reduction of components for domestic production by sharing low cost materials being used for overseas production. Pursuant to the recommendation of its leading customer Nissan urging parts suppliers to adopt parts and materials from low cost countries, the supplier of automotive precision springs and industrial fasters will begin to increase sourcing from countries capable of offering low cost products and materials. (From an article in the Nikkan Jidosha Shimbun on July 31, 2012)

Mid-term Management Plan

- The Company mapped out a mid-term business plan from fiscal 2012 through 2014. By increasing overseas sales in response to growing overseas production by Japanese automakers, the company aims to generate 55 billion yen (49 billion yen expected for fiscal 2012) in consolidated sales and 6 billion yen (5.3 billion yen expected for fiscal 2012) in operating profit. The overseas sales will account for 40 percent of the total consolidated sales through a boost in production in emerging countries focused on Asia. Based on the business plan, the overseas revenues will rise 60.5 percent to 22 billion yen in fiscal 2014 compared with the fiscal 2011 level. Sales in Asia, primarily in India, Indonesia, Thailand and China, will be doubled from 5.7 billion yen in fiscal 2010 to 12.5 billion yen in fiscal 2014. The share of Asia will rise from 49 percent to 57 percent. Sales in China, the largest in Asia, will reach around 6 billion yen in fiscal 2014, almost on par with the U.S., according to Yukihiko Shimazu, president of the company. (From an article in the Nikkan Jidosha Shimbun on Jun. 13, 2012)

>>>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	707	605	588
Automotive Products	388	390	353

R&D Structure

-R&D activities were conducted by the design department, development groups in each SBU, and the development division of the Company's subsidiary, Pilolax Medical Devices, Inc.

R&D Facilities

Name	Location
Yokohama Technical Center	Kanagawa Pref., Japan

<Thailand>
- The Company is planning to establish a new development base in Thailand by as early as by March 2014. The Thai facility will function as an engineering base to develop components for vehicles targeted at ASEAN countries and India. Engineers at this development center will also assist design work conducted at the company's facilities in other regions. Although the company has been handling some development work at its existing facilities overseas, none of these locations is equipped with devices needed for full-scale designing and testing operations. With the opening of the second development center following its technical center in Japan, the company is poised to offer products that better meet the needs of customers in the growing Asian market. (From an article in the Nikkan Jidosha Shimbun on Dec. 6, 2012)  

R&D Activities

Precision springs
-The Company developed low-cost materials for coil springs used in transmissions and engines.
-The Company developed and started mass-producing smaller, lighter, and more cost-efficient transmission units by using technology to analyze product stress and behavior in order to optimize the design.
-The Company put increased emphasis on developing composite springs designed to raise efficiency when being installed in transmission units.
-The Company also worked closely with assembly plants of its customers in order to develop products that best meet the requirements of the customers, while offering the Company's designing expertise.
-The Company increased joint development activities with and deliveries to automakers in emerging nations, while stepping up development programs with Japanese automakers.

Industrial fasteners
-The Company developed fasteners designed for sheets that run in size from thin to thick. Its new products include fasteners which require a minimum level of strength to be installed in vehicles, those with strong fastening power, and those that make dismantling of scrapped vehicles more efficient.
-The Company is working to develop lightweight products that contribute to improving fuel efficiency.
-The Company developed user-friendly net hooks for vehicle interiors.

Small units
-The Company developed resin parts for lock handles, side locks and dampers for glove boxes. As a result, the Company is supplying these products to every passenger-car OEM in Japan.

Fuel systems
-In the area of valves for plastic tanks, the Company enhanced the performance and reduced the manufacturing costs of rollover valves and inlet check valves, winning new customers and increasing the content-rate of these valves on new-model vehicles. In line with this, the Company has increased the production volume of these valves at its subsidiaries in Thailand, China, and elsewhere.
-The Company's R&D activities in the area of valves for metal fuel tanks resulted in the development of standard products and as well as multi-functional products too, which both exceeded the performance of conventional ones at less cost.
-The Company has won increased orders for its fuel supply system components, in line with growing use of fuel injection systems on motorcycles.
-The Company is working on developing products for environmentally friendly vehicles such as those that run on alternative fuels and hybrids.

Other products
-The Company is developing products (for batteries and motors) made from copper and frame-resistant resin materials. These products are for use on electric and hybrid electric vehicles.
-The Company has been working on developing environmentally friendly technologies compliant with the Japan Automobile Manufacturers Association's directive calling for voluntary reductions of volatile organic compounds and other environmentally harmful substances. It is also following both the End-of-Life (ELV) Vehicle Directive and the Restriction of Hazardous Substances (RoHS) in effect in Europe. Also, the Company has been working closely with its European operations in developing technologies that meet European REACH (Registration, Evaluation and Authorisation of CHemicals).
-As a means to lower product prices, the Company is considering using low-priced materials procured outside Japan. The Company is evaluating both the mechanical properties and performance of metal and plastics materials, continuing research into increasing their applications in products.

Product Development

Launching Production of Motor Parts Used on Hybrid Cars from Fall 2012
- The Company is going to produce motor parts for hybrid vehicles, starting in the fall of 2012. The company's subsidiary in Annaka City, Gumma Prefecture will manufacture bus rings for use in Nissan's new HV model with a rear-wheel-drive architecture, which is scheduled to be released in fall. The Company is already making lithium-ion battery components for the Nissan Leaf in Japan. Production of the Leaf products will also begin at its Georgia facility in the U.S. later this year. (From an article in the Nikkan Jidosha Shimbun on July 11, 2012)

Technology licensing-in Agreement

(As of Mar. 31, 2013)

Company	Product	Contract Detail	Term
Norma Germany GmbH	Automotive fuel delivery components	Approved use of patent	September 18, 1995 - August 17, 2000. This contract renews annually
Norma Germany GmbH	Plastic fuel tank components	Approved use of patent	Added to the contract above
Norma Germany GmbH	Plastic fuel tank components	Approved use of patent	December 13, 2001 - December 12, 2006. This contract renews annually

Technology licensing-out Agreement

(As of Mar. 31, 2013)

Company	Product	Contract Details	Term
KHK of Taiwan，Inc. (Taiwan)	Metal and plastic fasteners	Covers support for production technology	From October 6, 1987 through October 5, 2007. To be renewed every 5 years.
Taiwan Atsugi Co., Ltd. (Taiwan)	Pressure springs, Torsion springs, Valve springs	Covers technical support for the manufacture of automotive clutch pressure springs, torsion springs, and engine valve springs	From November 1, 1978 through October 31, 2003. To be renewed every 5 years.
Piolax Corp. (USA)	Precision plastic clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from April 1, 1993.
Piolax Ltd. (UK)	Precision plastic clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from August 8, 1995.
Piolax Co., Ltd. (Korea)	Precision plastic clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	From June 20, 1996 through June 19, 2006. To be renewed each year.
Piolax (Thailand) Ltd. (Thailand)	Precision plastic clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from August 10, 2000.
Dongguan Piolax Co., Ltd. (China)	Precision plastic clips, precision spring, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	From July 1, 2004 through June 30, 2014. To be renewed each year.
Piolax Mexicana, S.A. de C.V. (Mexico)	Precision plastic clips, precision spring, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from January 1, 2011.
Piolax India Private Ltd. (India)	Precision plastic clips, precision spring, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from January 1, 2010.
PT. Piolax Indonesia (Indonesia)	Precision plastic clips, precision spring, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from December 1, 2012.

Capital Investment

(in millions of JPY)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Automotive Products	3,892	3,548	3,048

-The Company spent 1,882 million yen in Japan and 2,102 million yen outside Japan.

Investments Outside Japan

<China>
- The Company said it will establish a local production subsidiary in Wuhan, Hubei Province in August 2012, which will be the company's second facility in China, following Dongguan PIOLAX in Guangdong Province. Capitalized at $10 million, the subsidiary will be owned 80 percent by the Company and 19 percent by Dongguan PIOLAX. A new plant with a floor space of about 7,000 square meters is scheduled to go into operation in March 2013. Wuhan PIOLAX will manufacture and sell plastic fasteners and open/close mechanisms, aiming to achieve sales of about 2.5 billion yen, approximately $31.6 million, in the fiscal year ending March 2015. (From an article in the Nikkan Jidosha Shimbun on July 24, 2012)   

<Indonesia>
- The Company announced that it will establish a subsidiary in Indonesia to manufacture and sell automotive and motorcycle parts. The new company, P.T. Piolax Indonesia, will be formed in June 2012 in Karawang, West Java. It will offer product lines that cater to the local needs and explore new customers in Indonesia, market of which has been maintaining strong growth. The subsidiary will be capitalized at 8 million dollars (approximately 640 million yen), of which 95 percent will be invested by the Company, and 5 percent by Piolax (Thailand), Ltd. Its yearly sales are expected to reach 20 million dollars by the business year 2016. (From an article in the Nikkan Jidosha Shimbun on May 10, 2012) 

<Mexico>
Moved Production Operations for Assembled Parts Sold in North America, to Mexico
- The Company is set to transfer parts production in the U.S. and Mexico, which are supplied to the North American market, entirely to Mexico by 2013 business year in a bid to integrate manufacture of labor-intensive products in Mexico where labor costs are lower than in the U.S. In Mexico, Japanese automakers are planning to boost their production during the period from 2013 to 2014. Parts suppliers are also expressing their intentions of making inroads into or constructing a new plant in the country. Piolax will respond to growing demand for parts by enhancing efficiency in its North American operation leveraging its existing facility in Mexico. (From an article in the Nikkan Jidosha Shimbun on April 27, 2012)

Planned capital investments (automobile related facilities)

(As of Mar. 31, 2013)

Company Office	Business	Expected Investment (Thousands of yen)	From	To	Purpose of the investment
The Company	Production facilities and dies	955	Apr. 2013	Mar. 2014	Investment was focused on updating equipment, mainly to improve production efficiency. Only a minor increase was made in terms of production capacity.
Subsidiaries in Japan	Production facilities and dies	344	Apr. 2013	Mar. 2014	Investment was focused on updating equipment, mainly to improve production efficiency. Only a minor increase was made in terms of production capacity.
Subsidiaries outside Japan	Production facilities and dies	4,097	Jan. 2013	Dec. 2013	Since a wide range of products are made at facilities outside Japan, the level of increase in production capacity is unclear.