Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Sales	54,712	48,476	12.9	-To meet the exact needs of its customers, the Company continued to conduct sales activities, especially in North America and developing countries.
Operating income	7,566	5,189	45.8	-The Company worked to effectively stream its operations.
Ordinary income	8,441	5,776	46.1
Current net income	5,722	3,757	52.3
Automotive Products
Sales	51,413	45,577	12.8	-The Company conducted aggressive sales activities, especially in developing countries, to expand its sales worldwide.
Operating income	8,052	5,775	39.4	-

Sales Promotion

 <India>
-In 2014, the Company will start producing opening and closing mechanisms for glove boxes in Hyundai models that are assembled in India and Turkey. Currently, the Company supplies fasteners to Hyundai in India. Outside Korea, this is the first order from Hyundai for opening and closing mechanisms. The parts will be produced by Piolax India Private Limited, which started operations in Chennai in June 2012. The parts will be supplied to glove box manufacturers to be used in compact Hyundai cars. (From an article in the Nikkan Jidosha Shimbun on December 19, 2013)

 <Japan>
-The Company has significantly expanded business with Mitsubishi Motors Corporation (MMC) for a new mini vehicle developed jointly by Nissan Motor and MMC. The Company increased its marginal trade volume with MMC in the past through active sales activities for the mini vehicle model co-developed by Nissan and MMC and successfully received the orders for a number of parts employed for the model. Trade volume of fasteners supplied to MMC used to be very small due to a high share of its competitors. Through promoting sales activities, the Company has won four or five times more orders than before for increased number of parts for the new mini vehicle. (From an article in the Nikkan Jidosha Shimbun on Jun 18, 2013)

Business Plan

-The Company aims to boost its sales of glove box open/close mechanisms for mini vehicles to JPY 200 million by FY ending March 2017. This figure is double the level in FY ended March 2014, as demand for the Company's new open/close mechanisms grows in the popular mini vehicle segment in Japan. The Company's original open/close mechanisms feature locks fixed on each side of the box instead of typical center-fixed locks. The new layout offers a stylish feel, while improving storage performance. The side lock system is paired with an air damper that helps the glove box door open and close smoothly and softly. Up until recently, use of such dampers has been limited to higher-class vehicles. The Company has already won a number of contracts from mini-vehicle manufacturers, and is set to ensure stable domestic production and sales with this business. (From an article in the Nikkan Jidosha Shimbun on June 25, 2014)

-In June 2013, the Company announced their Mid-term Management Plan up to FY ending March 2016.
The essential features are as follows;

• Consolidated sales target for FY ending March 2016 is JPY 60,000 million that is 23.7% increase from FY ended March 2013.
• Operating profit target for FY ending March 2016 is JPY 7,200 million that is 38.7% increase from FY ended March 2013.
• Overseas ratio of consolidated sales is targeted at 58% for FY ending March 2016, which was 38% for FY ended March 2013.
• Dependency ratio on Nissan family in consolidated sales will be reduced to 45% for FY ending March 2016.

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ended Mar. 31, 2014 (Actual Results)	Rate of Change (%)
Sales	56,600	54,712	3.5
Operating income	6,900	7,566	(8.8)
Ordinary income	7,500	8,441	(11.1)
Net income	4,600	5,722	(19.6)

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	714	707	605
Automotive Products	426	388	390

R&D Structure

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

R&D Facilities

Name	Location
Yokohama Technical Center	Kanagawa Pref., Japan

<Korea>
-In July 2013,  Piolax Co., Ltd., the Company's Korean subsidiary made an investment agreement to move its Incheon Plant and R&D location to the Incheon Free Economic Zone. Investment amount will be USD 10 million. The new location will start operation in the first half of 2014.

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 maker in Japan and to many car makers in overseas.

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, multi-functional products and newly developed products complying with each country's regulation, 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.

Technology licensing-in Agreement

(As of Mar. 31, 2014)

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, 2014)

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 November 29, 2003. To be renewed every 5 years.
Piolax Corp. (USA)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	For an indefinite period from April 1, 1993.
Piolax Ltd. (UK)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	For an indefinite period from August 8, 1995.
Piolax Co., Ltd. (Korea)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	From June 20, 1996 through June 19, 2006. To be renewed each year.
Piolax (Thailand) Ltd. (Thailand)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	For an indefinite period from August 10, 2000.
Dongguan Piolax Co., Ltd. (China)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing 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)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	For an indefinite period from January 1, 2011.
Piolax India Private Ltd. (India)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	For an indefinite period from January 1, 2010.
PT. Piolax Indonesia (Indonesia)	Various plastic precision clips, precision springs, and related assembly products for the automotive and electronics industry.	Covers licensing technology, engineering and marketing services	For an indefinite period from December 1, 2012.

Capital Investment

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Automotive Products	5,014	3,892	3,548

Investments Outside Japan

<Korea>
-In July 2013, Piolax Co., Ltd., the Company's Korean subsidiary made an investment agreement to move its Incheon Plant and R&D locatin to the Incheon Free Economic Zone. Investment amount will be USD 10 million. The new location will start operation in the first half of 2014. The new plant will have a total floor space of approx. 7,600 square meters, larger than approx. 5,280 square meters of the existing plant. The plant will produce parts for open/close mechanism such as plastic resins and air dampers. The new plant will meet a growing demand of its Korean customers and an increase in the volume of exports to Japan. The Korean subsidiary expects to make revenues of KRW 30,000 million for 2018.

<Thailand>
-The Company announced that it will expand its Thai Plant in response to requirements from Japanese automakers to supply its products locally in the ASEAN market. The Company will acquire land and a building adjacent to its existing facilities in June 2013. The new facility with a floor area of 9,974 square meters will become the Company's fourth factory in Thailand. The expansion will more than double the Thai Plant's whole floor area to approximately 17,000 square meters. The new operations are scheduled to begin by September 2013. (From an article in the Nikkan Jidosha Shimbun on May. 14, 2013)

Planned capital investments (automobile related facilities)

(As of Mar. 31, 2014)

Company Office	Business	Expected Investment (in millions of JPY)	From	To	Purpose of the investment
The Company	Production facilities and dies	879	Apr. 2014	Mar. 2015	Investment was focused on updating equipment, mainly to improve production efficiency. Only a minor increase will be made in terms of production capacity.
Subsidiaries in Japan	Production facilities and dies	282	Apr. 2014	Mar. 2015	Investment was focused on updating equipment, mainly to improve production efficiency. Only a minor increase will be made in terms of production capacity.
Subsidiaries outside Japan	Production facilities and dies	4,969	Jan. 2014	Dec. 2014	Since a wide range of products are made at facilities outside Japan, the level of increase in production capacity is minor.