CONTENTS - 株式会社ケーヒン · Keihin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. Dalian Motorcycles and Power Products Mechanical Products for Automobiles Research

Keihin Corporation is guided by two fundamental beliefs—

“Respect for the individual” and “The five joys.”

We believe that “Respect for the individual” encourages

self-reliance—to be free to express ideas and opinions and to

follow personal beliefs. The concept also emphasizes respect for

different perspectives and customs, and encourages employees to

treat each other with fairness and sincerity to promote mutual

trust.

“The five joys”—bringing joy to society, customers, suppliers,

shareholders and ourselves—represent a shared commitment to

meeting multiple expectations.

Keihin aims to achieve the realization of its corporate principle

which states that “Keihin will continue to contribute to the future

of mankind by the continuous creation of new value,” through

activities grounded in this principle.

CONTENTS

President’s Message 01

Global Network 02

Main Products 04

Financial Highlights

Review of Operations

06

07

Results by Geographical Region 10

Results by Products 11

Response to Flooding in Thailand

Newly Established Plants and Company

12

13

14

Risk Factors 15

Corporate Governance 16

Directors and Corporate Auditors 17

Five-Year Summary of SelectedFinancial Data

18

Financial Review

Consolidated Balance Sheets

19

28

22

24

25

26

27

44

43

Forward-Looking StatementsThis annual report contains predictions and forecasts concerning Keihin’s future plans, strategies and results. These predictions and forecasts are not historical facts but represent judgments formed by management based on the information available at the time they were formed. As such, actual results may differ significantly due to factors including, but not limited to, economic trends, changes in the automobile and automobile component industries, market demand, foreign exchange rates and tax systems.

PROFILE

Consolidated Statements of Income

Consolidated Statements ofComprehensive Income

Consolidated Statements ofChanges in Net Assets

Consolidated Statements ofCash Flows

Notes to the ConsolidatedFinancial Statements

Report of Independent Auditors

Corporate Data

Transfer of Automotive Air-ConditioningHeat Exchanger Business Completed

Annual Report 2012 01

I would like to offer my sincerest gratitude to shareholders

and all stakeholders for your ongoing support.

It is time to look back on the fiscal year just com-

pleted—fiscal 2012, ended March 31, 2012—and I will take

this opportunity to provide some commentary to noteworthy

events and results.

To start, the business environment was extremely

challenging for the Keihin Group, not only from the conse-

quences of the Great East Japan Earthquake and flooding in

Thailand but also difficult market conditions, particularly the

unprecedented appreciation of the yen. While these circum-

stances were unfolding, we pushed ahead with revisions to

our business continuity plan, applying knowledge gained

through our experience in last year’s devastating earthquake,

and when Thailand was inundated with floods we were able

to execute orders for systems and components to our cus-

tomers swiftly and without any disruption.

Efforts to fortify future business activities high-

lighted the establishment of companies in Vietnam, India and

Mexico. We also completed the transfer of the automobile

air-conditioning heat exchanger business, acquired from

Showa Denko K.K., in January 2012. With this move, the

business—already operating as Keihin Thermal Technology

Corporation—assumed a stronger presence as our core sub-

sidiary for automobile air-conditioning systems.

Looking at fiscal 2012 business results, sales of mo-

torcycle and power products, especially in Asia, excluding the

domestic market, were up, but sales of automotive products

tumbled, largely due to the impact of natural disasters. Con-

sequently, we recorded a year-on-year drop in net sales. On

the profit front, we experienced a huge earnings decrease,

mainly reflecting the lower net sales starting point and the

effect of exchange rates.

“Respect for the individual” and “The five joys” are

the Fundamental Beliefs that will lead us toward our goal to

be an enterprise contributing to the future of mankind

through ongoing new value creation.

I ask for the continued support of shareholders and

all stakeholders as we strive to reach this goal.

June 30, 2012President and CEO

President’s Message

Annual Report 2012 0302 Annual Report 2012

We will meet customer expectations by providing high-quality products through a global network.

China

Europe

Brazil

Keihin Europe Ltd.Glasgow

Taiwan Keihin Carburetor Co., Ltd.Taichung

Keihin Tecnologia do Brasil Ltda.Amazonas

Keihin de Mexico S.A.DE C.V.San Luis Potosi

Keihin Panalfa Ltd.Uttar Pradesh

Keihin FIE Pvt. Ltd.Maharashtra

Keihin Automotive Systems India Pvt. Ltd.Haryana

Keihin Asia Bangkok Co., Ltd. Asian HeadquartersBangkok

Keihin (Thailand) Co., Ltd.Lamphun

Keihin Auto Parts (Thailand) Ltd.Ayutthaya

Keihin Thermal Technology (Thailand) Co., Ltd.Ayutthaya

Keihin Sales and Development EuropeGmbHBayern

Keihin Thermal Technology Czech, s.r.oCentral Bohemia

Taiwan

India

United Kingdom

Thailand

P.T. Keihin IndonesiaWest Java

Indonesia

Germany

Czech Republic China

14Countries

32 19,843

Keihin North America, Inc. American HeadquartersIndiana

Keihin Carolina System Technology, LLC.North Carolina

Keihin Aircon North America, Inc.IndianaKeihin IPT Manufacturing, LLC.Indiana

Keihin Michigan Manufacturing, LLC.Michigan

Keihin Thermal Technology of America, Inc.Ohio

U.S.A.

Mexico

Malaysia

Keihin Malaysia Manufacturing SDN. BHD.Melaka

Asia

Americas

Keihin Vietnam Co., Ltd.Hung Yen

Vietnam

Global Network

NEW

NEW

NEW

NEW

NEW

NEW

NEW

Dongguan Keihin EngineManagement System Co., Ltd.Guangdong

Nanjing Keihin Carburetor Co., Ltd.Jiangsu

Keihin R&D China Co., Ltd.Shanghai

Keihin-Grand Ocean Thermal Technology(Dalian) Co., Ltd.Dalian

Motorcycles and Power Products

Mechanical Products for Automobiles

Research & Development

GroupCompanies Employees

Tochigi

Kanagawa

Saitama

Shizuoka

Mie

Japan

NEW

Kakuda Plant 1

Kakuda Plant 2

Kakuda Plant 3

Kakuda HeadquartersKakuda Research & Development Center Kakuda-shi

Marumori PlantMarumori-machi

Kanazu Mfg. Co., Ltd.

Keihin Sogyo Co., Ltd.Kakuda-shi

Keihin Watari Co., Ltd.Watari-cho

Keihin Electronics Technology, Inc.Sendai-shi

Miyagi

Suzuka PlantSuzuka-shi

Sayama PlantSayama-shi

Asaka OfficeAsaka-shi

Keihin Valve Corp.Yokohama-shi

Hamamatsu OfficeHamamatsu-shi

Head officeShinjuku-ku

Tokyo

Tochigi HeadquartersTochigi Research & Development CenterTakanezawa-machi

Nasu Seiki Mfg. Co., Ltd.Nasukarasuyama-shi

Keihin Thermal Technology CorporationOyama-shi


We will meet customer expectations by providing high-quality products through a global network.

China

Europe

Brazil

Keihin Europe Ltd.Glasgow

Taiwan Keihin Carburetor Co., Ltd.Taichung

Keihin Tecnologia do Brasil Ltda.Amazonas

Keihin de Mexico S.A.DE C.V.San Luis Potosi

Keihin Panalfa Ltd.Uttar Pradesh

Keihin FIE Pvt. Ltd.Maharashtra

Keihin Automotive Systems India Pvt. Ltd.Haryana

Keihin Asia Bangkok Co., Ltd. Asian HeadquartersBangkok

Keihin (Thailand) Co., Ltd.Lamphun

Keihin Auto Parts (Thailand) Ltd.Ayutthaya

Keihin Thermal Technology (Thailand) Co., Ltd.Ayutthaya

Keihin Sales and Development EuropeGmbHBayern

Keihin Thermal Technology Czech, s.r.oCentral Bohemia

Taiwan

India

United Kingdom

Thailand

P.T. Keihin IndonesiaWest Java

Indonesia

Germany

Czech Republic China

14Countries

32 19,843

Keihin North America, Inc. American HeadquartersIndiana

Keihin Carolina System Technology, LLC.North Carolina

Keihin Aircon North America, Inc.IndianaKeihin IPT Manufacturing, LLC.Indiana

Keihin Michigan Manufacturing, LLC.Michigan

Keihin Thermal Technology of America, Inc.Ohio

U.S.A.

Mexico

Malaysia

Keihin Malaysia Manufacturing SDN. BHD.Melaka

Asia

Americas

Keihin Vietnam Co., Ltd.Hung Yen

Vietnam

Global Network

NEW

NEW

NEW

NEW

NEW

NEW

NEW

Dongguan Keihin EngineManagement System Co., Ltd.Guangdong

Nanjing Keihin Carburetor Co., Ltd.Jiangsu

Keihin R&D China Co., Ltd.Shanghai

Keihin-Grand Ocean Thermal Technology(Dalian) Co., Ltd.Dalian

Motorcycles and Power Products

Mechanical Products for Automobiles

Research & Development

GroupCompanies Employees

Tochigi

Kanagawa

Saitama

Shizuoka

Mie

Japan

NEW

Kakuda Plant 1

Kakuda Plant 2

Kakuda Plant 3

Kakuda HeadquartersKakuda Research & Development Center Kakuda-shi

Marumori PlantMarumori-machi

Kanazu Mfg. Co., Ltd.

Keihin Sogyo Co., Ltd.Kakuda-shi

Keihin Watari Co., Ltd.Watari-cho

Keihin Electronics Technology, Inc.Sendai-shi

Miyagi

Suzuka PlantSuzuka-shi

Sayama PlantSayama-shi

Asaka OfficeAsaka-shi

Keihin Valve Corp.Yokohama-shi

Hamamatsu OfficeHamamatsu-shi

Head officeShinjuku-ku

Tokyo

Tochigi HeadquartersTochigi Research & Development CenterTakanezawa-machi

Nasu Seiki Mfg. Co., Ltd.Nasukarasuyama-shi

Keihin Thermal Technology CorporationOyama-shi

04 Annual Report 2012 Annual Report 2012 05

Main Productｓ

■Motorcycle and Power Products ■Automotive Products

With products that always bring leading-edge technologies into full play,Keihin will continue to contribute to the future of mankind.

ECU

Linear Solenoid Valve

HVAC Unit Compressor Condenser

FI System Products for Small-Displacement Motorcycles

Drive by Wire Throttle Body

Hybrid ElectricVehicle System Products

ECU

Airbag SystemControl Unit

Fuel Pump Module Pressure Regulator Fuel Injector

Fuel Pump Module Fuel Injector Throttle Body

Fuel Injector

Oil Trap Filter 2nd ECU

Server ECU

RegulatorMotor/Battery ECU

Pressure Regulator

Systems combining the concept of compact, highly effcient and low cost with environmental technology

Safety Systems

Engine Devices

Natural Gas Vehicle System Products

Throttle Body forLarge-Displacement Motorcycles

Ｃａrburetoｒ forLarge-Displacement Motorcycles

High-quality products that meet overseas alcohol fuel requirements

Alternative Fuel Injection System Products Carburetor

Advanced technology to realize top-class levelsafety and environmental performance

Fuel Cell Electric Vehicle System Products

Both the optimum controland safety of motors

and lithium-ion batteries

Engine Devices

Intake Manifold

Safety Systems

SRS Unit

SRS Sensor

Transmission Devices Air-Conditioning Systems

04 Annual Report 2012 Annual Report 2012 05

Main Productｓ

■Motorcycle and Power Products ■Automotive Products

With products that always bring leading-edge technologies into full play,Keihin will continue to contribute to the future of mankind.

ECU

Linear Solenoid Valve

HVAC Unit Compressor Condenser

FI System Products for Small-Displacement Motorcycles

Drive by Wire Throttle Body

Hybrid ElectricVehicle System Products

ECU

Airbag SystemControl Unit

Fuel Pump Module Pressure Regulator Fuel Injector

Fuel Pump Module Fuel Injector Throttle Body

Fuel Injector

Oil Trap Filter 2nd ECU

Server ECU

RegulatorMotor/Battery ECU

Pressure Regulator

Systems combining the concept of compact, highly effcient and low cost with environmental technology

Safety Systems

Engine Devices

Natural Gas Vehicle System Products

Throttle Body forLarge-Displacement Motorcycles

Ｃａrburetoｒ forLarge-Displacement Motorcycles

High-quality products that meet overseas alcohol fuel requirements

Alternative Fuel Injection System Products Carburetor

Advanced technology to realize top-class levelsafety and environmental performance

Fuel Cell Electric Vehicle System Products

Both the optimum controland safety of motors

and lithium-ion batteries

Engine Devices

Intake Manifold

Safety Systems

SRS Unit

SRS Sensor

Transmission Devices Air-Conditioning Systems


• A year that saw huge repercussions from natural disastersThe economic climate that we encountered in fiscal 2012

created incredibly difficult circumstances in Japan, where

the impact of such events as the Great East Japan Earth-

quake and flooding in Thailand had a considerable impact

on corporate activities. Since those news-making disasters,

business conditions have gradually improved, as supply

chains returned to normal and production activities subse-

quently recovered.

Overseas, markets in Asia presented their own

challenges, most notably the flooding in Thailand, but

business conditions were nonetheless favorable, especially

in China and India. In the West, the financial instability

caused by the European debt crisis was particularly dam-

aging in Europe, where business conditions remained lack-

luster through to the end of the fiscal year. Meanwhile,

conditions in the United States improved ever so slightly in

the second half of the fiscal year.

• Motorcycle and power productsIn the motorcycle products business, the spotlight was on

Indonesia where recent developments, particularly the

implementation of tougher exhaust emission standards,

has initiated a transition to electronic fuel injection sys-

tems. Our fuel injection system for small, affordably priced

motorcycles was installed in the models of two Honda

series: Spacy and Supra X 125. Our electronically con-

trolled throttle body system for large motorcycles utilizing

technology accumulated in automobile products was

installed in the KTM 690 Duke and the Triumph Tiger

Explorer. In the power products business, our smaller,

gas/air mixer for private power generators was installed in

a Honda-made home-use gas engine cogeneration unit.

• Automobile productsIn the automobile products business, we emphasized local

procurement and a review of component consolidation

and performance to better meet demand from manufac-

turers of affordably priced cars. These efforts led to instal-

lation of our fuel supply system into the Honda BRIO. Our

power control unit, which electronically controls the motor

and battery in ever-more-popular hybrid vehicles, was

installed in the Honda Fit Shuttle Hybrid and Honda Freed

Hybrid, and a newly developed lithium ion battery-based

product was installed in the Honda Civic Hybrid. In addi-

tion, our newly developed fuel supply system as well as

air-conditioning products and electronic control units, were

installed in the Honda CR-V. In the alternative-fuel prod-

ucts business, we formed an agreement with Daimler AG

to develop and supply injectors for natural gas vehicles—a

particular product focus for us—under the Mercedes-Benz

brand.

Electronic control throttle body system for large motorcycles, installed in KTM 690 DUKE and Triumph Tiger Explorer

Motor battery ECU for hybrid electric vehicle installed in Honda Freed Hybrid

KTM 690 DUKE Triumph Tiger Explorer

Components installed mainly in motorcycles and power products Product installed mainly in automobiles

Notes:

1. The above amounts were prepared under accounting principles generally accepted in Japan.

2. U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥82.19=US$1.

(See Note 3 to the Consolidated Financial Statements.)

Millions of yen(except per share amounts)

Thousands of U.S. dollars(except per share amounts)

20122009 2010 2011 2012

For the year:

Net sales ¥259,994¥288,337 ¥255,938

Operating income 10,81811,609 13,717

Income before income taxes and minority interests 10,1741,798 14,239

Net income 4,239(5,625) 7,634

At year-end:

Total net assets ¥143,909¥126,938 ¥136,503

Total assets 202,724183,751 193,741

Per share of common stock (yen and U.S. dollars):Net income: basic

Cash dividends

¥ 57.32¥ (76.05) ¥ 103.21

26.0028.00 21.00

¥278,491

21,598

19,574

12,324

¥140,927

193,557

¥ 166.63

25.00

Keihin Corporation and Keihin’s consolidated subsidiaries

For the years ended March 31, 2009, 2010, 2011 and 2012

Net sales (left scale)Operating income (right scale)

Net sales and operating income

(yen)

Net sales (left scale)

Net income per share (basic, right scale)

Net income and net income per share

Total assetsTotal net assets

Total assets and total net assets

400,000

300,000

200,000

100,000

0

40,000

30,000

20,000

10,000

0

(Millions of yen) (Millions of yen)

2008 2009 2010 2011 2012

18,000

12,000

6,000

0

-6,000

300

200

100

0

-100

(Millions of yen)

20122008 2009 2010 2011

240,000

180,000

120,000

60,000

0

(Millions of yen)

20122008 2009 2010 2011

Financial Results for FY2012

260.0 billion(declined 6.6% compared with FY2011)



$3,163,332

131,630

123,781

51,581

$1,750,937

2,466,535

$ 0.70

0.32

NetSales

OperatingIncome

NetIncome

Financial Highlights Review of Operations


• A year that saw huge repercussions from natural disastersThe economic climate that we encountered in fiscal 2012

created incredibly difficult circumstances in Japan, where

the impact of such events as the Great East Japan Earth-

quake and flooding in Thailand had a considerable impact

on corporate activities. Since those news-making disasters,

business conditions have gradually improved, as supply

chains returned to normal and production activities subse-

quently recovered.

Overseas, markets in Asia presented their own

challenges, most notably the flooding in Thailand, but

business conditions were nonetheless favorable, especially

in China and India. In the West, the financial instability

caused by the European debt crisis was particularly dam-

aging in Europe, where business conditions remained lack-

luster through to the end of the fiscal year. Meanwhile,

conditions in the United States improved ever so slightly in

the second half of the fiscal year.

• Motorcycle and power productsIn the motorcycle products business, the spotlight was on

Indonesia where recent developments, particularly the

implementation of tougher exhaust emission standards,

has initiated a transition to electronic fuel injection sys-

tems. Our fuel injection system for small, affordably priced

motorcycles was installed in the models of two Honda

series: Spacy and Supra X 125. Our electronically con-

trolled throttle body system for large motorcycles utilizing

technology accumulated in automobile products was

installed in the KTM 690 Duke and the Triumph Tiger

Explorer. In the power products business, our smaller,

gas/air mixer for private power generators was installed in

a Honda-made home-use gas engine cogeneration unit.

• Automobile productsIn the automobile products business, we emphasized local

procurement and a review of component consolidation

and performance to better meet demand from manufac-

turers of affordably priced cars. These efforts led to instal-

lation of our fuel supply system into the Honda BRIO. Our

power control unit, which electronically controls the motor

and battery in ever-more-popular hybrid vehicles, was

installed in the Honda Fit Shuttle Hybrid and Honda Freed

Hybrid, and a newly developed lithium ion battery-based

product was installed in the Honda Civic Hybrid. In addi-

tion, our newly developed fuel supply system as well as

air-conditioning products and electronic control units, were

installed in the Honda CR-V. In the alternative-fuel prod-

ucts business, we formed an agreement with Daimler AG

to develop and supply injectors for natural gas vehicles—a

particular product focus for us—under the Mercedes-Benz

brand.

Electronic control throttle body system for large motorcycles, installed in KTM 690 DUKE and Triumph Tiger Explorer

Motor battery ECU for hybrid electric vehicle installed in Honda Freed Hybrid

KTM 690 DUKE Triumph Tiger Explorer

Components installed mainly in motorcycles and power products Product installed mainly in automobiles

Notes:

1. The above amounts were prepared under accounting principles generally accepted in Japan.

2. U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥82.19=US$1.

(See Note 3 to the Consolidated Financial Statements.)



20122009 2010 2011 2012

For the year:

Net sales ¥259,994¥288,337 ¥255,938

Operating income 10,81811,609 13,717

Income before income taxes and minority interests 10,1741,798 14,239

Net income 4,239(5,625) 7,634

At year-end:

Total net assets ¥143,909¥126,938 ¥136,503

Total assets 202,724183,751 193,741

Per share of common stock (yen and U.S. dollars):Net income: basic

Cash dividends

¥ 57.32¥ (76.05) ¥ 103.21

26.0028.00 21.00

¥278,491

21,598

19,574

12,324

¥140,927

193,557

¥ 166.63

25.00

Keihin Corporation and Keihin’s consolidated subsidiaries

For the years ended March 31, 2009, 2010, 2011 and 2012

Net sales (left scale)Operating income (right scale)

Net sales and operating income

(yen)

Net sales (left scale)

Net income per share (basic, right scale)

Net income and net income per share

Total assetsTotal net assets


400,000

300,000

200,000

100,000

0

40,000

30,000

20,000

10,000

0


2008 2009 2010 2011 2012

18,000

12,000

6,000

0

-6,000

300

200

100

0

-100

(Millions of yen)

20122008 2009 2010 2011

240,000

180,000

120,000

60,000

0

(Millions of yen)

20122008 2009 2010 2011

Financial Results for FY2012




$3,163,332

131,630

123,781

51,581

$1,750,937

2,466,535

$ 0.70

0.32

NetSales

OperatingIncome

NetIncome

Financial Highlights Review of Operations


• Globally, we will address expanding volume; domestically, we will refine our production engineering capabilitiesSeeking to sharpen our competitive edge from a global perspective, we established production subsidiaries over-seas, in Mexico and India, where customer needs are growing along with higher demand for automobiles. We also established a production subsidiary in Vietnam, where demand for motorcycles is expanding. In Japan, the home of our flagship facilities, we endeavored to implement advanced production technologies to boost production efficiency. In addition, to support global business expan-sion and mitigate the impact of prolonged yen apprecia-tion, we set up the Global Purchasing Office to promote greater local procurement by cultivating a wider network of suppliers abroad.

• Completed t ransfer of automot ive a i r -conditioning heat exchanger business and brought five new companies under Group umbrellaIn January 2012, we acquired equity in Showa Denko’s automobile air-conditioning heat exchanger business, effectively bringing Keihin Thermal Technology Corpora-tion under the Group umbrella as our core subsidiary for automotive air-conditioning systems along with its subsid-iaries in the United States, Thailand, China and the Czech Republic. Through this acquisition, we expect to sharpen our cost-competitiveness and enhance our product devel-opment capabilities in the air-conditioning systems busi-ness.

• Impact of natural disasters key factor in lower sales and income Despite the aforementioned approaches and activities, consolidated net sales fell ¥18,497 million from the previ-ous fiscal year, to ¥259,994 million. Breaking this down, sales of components for motorcycles and power products grew ¥3,426 million, to ¥88,754 million, but sales of parts and components for automobiles decreased ¥21,922 million, to ¥171,240 million. On the profit front, operating income, at ¥10,818 million, and ordinary income, at ¥11,458 million, were down ¥10,778 million and ¥10,236 million respectively, largely due to the lower initial net sales as well as higher costs, particularly personnel expenses and R&D expenses, and the impact of exchange rates on amounts converted into yen. Net income decreased ¥8,085 million, to ¥4,239 million.

• Dividends rise ¥1, to ¥26, for a payout ratio of 45% At Keihin, we consider the return of profits to shareholders to be one of our most important management objectives. We have determined an appropriate dividend based on a policy that takes a comprehensive view of such factors as

Cash dividends per share (left scale) Net income per share (basic, right scale)

Enhance our ability to respond to the diversification of market needs

Establish optimum global operations

Promote awareness building and cultivate self-motivation and self-reliance

business development and considers consolidated business results over the long term. Looking at all factors, including consolidated performance in fiscal 2012, management decided on a year-end dividend of ¥13 per share, which when added to the interim dividend, brought the annual dividend to ¥26 per share.

• Infusing the business structure with a dynamism that gives us an edge over the global competitionThe Keihin Group promoted measures to deal with problem-atic issues in production and procurement that became more obvious after the Great East Japan Earthquake of 2011. In production, we stressed a global backup produc-tion strategy instead of a production structure centered on a single location. As a result, when Thailand was inundated with floods we were able to swiftly execute orders for systems and components for our customers. In procure-ment, we seek to establish a supply structure integrated with the companies that supply us. We are also working to build structures more resilient to change, including efforts to secure inventory in reserve as a contingency measure. In July 2011, we received a recommendation from Japan’s Fair Trade Commission based on the provisions of the Act against Delay in Payment of Subcontract Proceeds, etc., to Subcontractors. We deeply regret what transpired and have taken companywide measures to prevent this from happening again. Going forward, we aim to reinforce compliance practices to match globally oriented business development.

Despite signs of gradual improvement in business conditions, supported by expansion in Asia and recovery in the United States, there are still elements of uncertainty in the operating environment for the Keihin Group, namely, persistent appreciation of the yen, the European debt crisis and possible power shortages in Japan. Looking to the future, the automobile market is likely to become increasingly competitive as mature markets, such as Japan, Europe and the United States, prioritize environment-friendly vehicles, and growth markets, particularly China and other Asian markets, seek greater affordability. We will continue to address lingering issues while promoting the Eleventh Medium-Term Business Plan—a three-year roadmap that runs from April 2011 through March 2014—designed to infuse our business structure with the vitality to withstand the pressures of global compe-tition. The three key strategies that will help us achieve this goal are 1) enhance our ability to respond to the diversifica-tion of market needs; 2) establish optimum global opera-tions; and 3) promote awareness building and foster the qualities of self-motivation and self-reliance. Success in these efforts will underpin enhanced corporate value.

Last but not least, we have decided to introduce an executive officer system to expedite measures to expand global business activities and to respond more effectively to changes in the business environment. This will facilitate delegation of authority to regions and operations in these markets, clearly separate the functions of supervision and execution in business pursuits, and accord the Board of Directors more decision-making flexibility. We will utilize the merits of this system to make management processes more swift and efficient.

Eleventh Medium-Term Business Plan

Operating income margin: above 8%

Infuse business structurewith the dynamism necessaryto ensure survival amidglobal competition

Targets

（円）30

15

0

（円）

2009 2010 2011 2012

200

100

0

-100

Production

Reinforce compliance practices

■Response to Issues

Global backup production structure instead ofone centered on a single location

ProcurementEstablish a supply structure integrated with

our suppliersSecure inventory in reserve as a contingency measure

During Thai floods, we could swiftlyexecute orders for systems andcomponents for our customers

Build structures more resilient to change

70.00

80.00

90.00

100.00

110.00

120.00

130.00(Yen) (Yen)

70.00

80.00

90.00

100.00

110.00

120.00

130.00

2003/1 2005/1 2007/1 2009/1 2011/1

overseas domestic overseasdomestic

Ratio of net sales of the Group

FY2005: 53％ FY2012: 65％

■Global Purchasing

Global Business Expansion

Established the Global Purchasing Office

Promote further local procurement bycutivating a wider network of suppliers abroad

Prolonged Yen Appreciation

$1.00≦¥80

■Japan, Home of Our Flagship Facilities

Have an Edge Over Global Competition

Expanding

Cost Quality Technology Manufacture

OverseasJapan

The home of flagship facilities which drive advancedtechnologies utilizing Japanese craftsmanship

Establish innovative,global top-level productiontechnologies


• Globally, we will address expanding volume; domestically, we will refine our production engineering capabilitiesSeeking to sharpen our competitive edge from a global perspective, we established production subsidiaries over-seas, in Mexico and India, where customer needs are growing along with higher demand for automobiles. We also established a production subsidiary in Vietnam, where demand for motorcycles is expanding. In Japan, the home of our flagship facilities, we endeavored to implement advanced production technologies to boost production efficiency. In addition, to support global business expan-sion and mitigate the impact of prolonged yen apprecia-tion, we set up the Global Purchasing Office to promote greater local procurement by cultivating a wider network of suppliers abroad.

• Completed t ransfer of automot ive a i r -conditioning heat exchanger business and brought five new companies under Group umbrellaIn January 2012, we acquired equity in Showa Denko’s automobile air-conditioning heat exchanger business, effectively bringing Keihin Thermal Technology Corpora-tion under the Group umbrella as our core subsidiary for automotive air-conditioning systems along with its subsid-iaries in the United States, Thailand, China and the Czech Republic. Through this acquisition, we expect to sharpen our cost-competitiveness and enhance our product devel-opment capabilities in the air-conditioning systems busi-ness.

• Impact of natural disasters key factor in lower sales and income Despite the aforementioned approaches and activities, consolidated net sales fell ¥18,497 million from the previ-ous fiscal year, to ¥259,994 million. Breaking this down, sales of components for motorcycles and power products grew ¥3,426 million, to ¥88,754 million, but sales of parts and components for automobiles decreased ¥21,922 million, to ¥171,240 million. On the profit front, operating income, at ¥10,818 million, and ordinary income, at ¥11,458 million, were down ¥10,778 million and ¥10,236 million respectively, largely due to the lower initial net sales as well as higher costs, particularly personnel expenses and R&D expenses, and the impact of exchange rates on amounts converted into yen. Net income decreased ¥8,085 million, to ¥4,239 million.

• Dividends rise ¥1, to ¥26, for a payout ratio of 45% At Keihin, we consider the return of profits to shareholders to be one of our most important management objectives. We have determined an appropriate dividend based on a policy that takes a comprehensive view of such factors as

Cash dividends per share (left scale) Net income per share (basic, right scale)

Enhance our ability to respond to the diversification of market needs

Establish optimum global operations

Promote awareness building and cultivate self-motivation and self-reliance

business development and considers consolidated business results over the long term. Looking at all factors, including consolidated performance in fiscal 2012, management decided on a year-end dividend of ¥13 per share, which when added to the interim dividend, brought the annual dividend to ¥26 per share.

• Infusing the business structure with a dynamism that gives us an edge over the global competitionThe Keihin Group promoted measures to deal with problem-atic issues in production and procurement that became more obvious after the Great East Japan Earthquake of 2011. In production, we stressed a global backup produc-tion strategy instead of a production structure centered on a single location. As a result, when Thailand was inundated with floods we were able to swiftly execute orders for systems and components for our customers. In procure-ment, we seek to establish a supply structure integrated with the companies that supply us. We are also working to build structures more resilient to change, including efforts to secure inventory in reserve as a contingency measure. In July 2011, we received a recommendation from Japan’s Fair Trade Commission based on the provisions of the Act against Delay in Payment of Subcontract Proceeds, etc., to Subcontractors. We deeply regret what transpired and have taken companywide measures to prevent this from happening again. Going forward, we aim to reinforce compliance practices to match globally oriented business development.

Despite signs of gradual improvement in business conditions, supported by expansion in Asia and recovery in the United States, there are still elements of uncertainty in the operating environment for the Keihin Group, namely, persistent appreciation of the yen, the European debt crisis and possible power shortages in Japan. Looking to the future, the automobile market is likely to become increasingly competitive as mature markets, such as Japan, Europe and the United States, prioritize environment-friendly vehicles, and growth markets, particularly China and other Asian markets, seek greater affordability. We will continue to address lingering issues while promoting the Eleventh Medium-Term Business Plan—a three-year roadmap that runs from April 2011 through March 2014—designed to infuse our business structure with the vitality to withstand the pressures of global compe-tition. The three key strategies that will help us achieve this goal are 1) enhance our ability to respond to the diversifica-tion of market needs; 2) establish optimum global opera-tions; and 3) promote awareness building and foster the qualities of self-motivation and self-reliance. Success in these efforts will underpin enhanced corporate value.

Last but not least, we have decided to introduce an executive officer system to expedite measures to expand global business activities and to respond more effectively to changes in the business environment. This will facilitate delegation of authority to regions and operations in these markets, clearly separate the functions of supervision and execution in business pursuits, and accord the Board of Directors more decision-making flexibility. We will utilize the merits of this system to make management processes more swift and efficient.

Eleventh Medium-Term Business Plan

Operating income margin: above 8%

Infuse business structurewith the dynamism necessaryto ensure survival amidglobal competition

Targets

（円）30

15

0

（円）

2009 2010 2011 2012

200

100

0

-100

Production

Reinforce compliance practices

■Response to Issues

Global backup production structure instead ofone centered on a single location

ProcurementEstablish a supply structure integrated with

our suppliersSecure inventory in reserve as a contingency measure

During Thai floods, we could swiftlyexecute orders for systems andcomponents for our customers

Build structures more resilient to change

70.00

80.00

90.00

100.00

110.00

120.00

130.00(Yen) (Yen)

70.00

80.00

90.00

100.00

110.00

120.00

130.00

2003/1 2005/1 2007/1 2009/1 2011/1

overseas domestic overseasdomestic

Ratio of net sales of the Group

FY2005: 53％ FY2012: 65％

■Global Purchasing

Global Business Expansion

Established the Global Purchasing Office

Promote further local procurement bycutivating a wider network of suppliers abroad

Prolonged Yen Appreciation

$1.00≦¥80

■Japan, Home of Our Flagship Facilities

Have an Edge Over Global Competition

Expanding

Cost Quality Technology Manufacture

OverseasJapan

The home of flagship facilities which drive advancedtechnologies utilizing Japanese craftsmanship

Establish innovative,global top-level productiontechnologies


Net Sales200,000

150,000

100,000

50,000

0

（Millions of yen）

2011 20122008 2009 2010 2011 20122008 2009 2010

In the motorcycle and power products business, we achieved an increase in sales, mainly supported by demand for products used in large motorcycles and other products exported to Asian markets. In the automobile products business, we showed an increase in sales of products for hybrid vehicles, but overall, sales of automobile products decreased in the domestic market and also in markets in the rest of Asia for various reasons but particularly because of consequences arising from the Great East Japan Earthquake. In the end, net sales from operations in Japan fell ¥1,477 million from the previous fiscal year, to ¥144,982 million.

The impact of conversion from local

currencies into yen and a drop in

sales of automobile products in

North America overshadowed higher

sales of motorcycle and power prod-

ucts in South America, leading to a

¥6,976 million year-on-year decrease

in net sales from operations in the

Americas, to ¥66,096 million.

Asia: A decline in sales of automobile products in India and Thailand, primarily because of the Thai floods, as well as the impact of conversion from local currencies into yen were key factors eroding the benefits realized through higher sales of motorcycle and power products in Indonesia and India. As a result, net sales from operations in Asia retreated ¥9,287 million from the previ-ous fiscal year, to ¥71,370 million. China: Despite the impact of conver-sion from the yuan into yen, sales improved, reflecting our ability to charge a fee on the supply of compo-nents. This underpinned a ¥573 million year-on-year increase in net sales from operations in China, to ¥34,721 million.

Net sales from operations in Europe

tumbled ¥1,348 million from the

previous fiscal year, to ¥4,444 million,

mainly attributed to a decrease in

sales of automobile products.

Net Sales

Americas

120,000

90,000

60,000

30,000

0


Net Sales

Europe

12,000

9,000

6,000

3,000

0

（Millions of yen）Net Sales

Asia China


Net Sales

66.1 billion

Net Sales

71.4 billionNet Sales

34.7 billion

JapanNet Sales

145.0 billion

Net Sales

4.4 billion

2011 20122008 2009 20102011 20122008 2009 2010

120,000

100,000

80,000

60,000

40,000

20,000

0

Asia China

* From 2011, the segment of net sales by geographical region have been changed to five regions from four regions. * Internal sales between regions (intersegment sales) are included in net sales.

Heightened environmental awareness as well as concerns over global warming and tougher exhaust emission restrictions in all

countries are behind the transition toward fuel injection systems for motorcycles that can control the air-fuel mixture more precisely

than conventional carburetors. In developed nations, the process is complete, and in emerging nations, Thailand, Brazil and Taiwan

lead the way. In fiscal 2012, Indonesia—the second largest market in Asia, began the shift toward fuel injection systems. Keihin

holds the largest share of the carburetor market on a global basis and will utilize this position as well as vanguard product develop-

ment capabilities and sharp cost-competitiveness to secure a parallel top spot worldwide for fuel injection systems.

The components of a fuel injection system are

an injector, a throttle body, an engine control unit (ECU)

and a fuel pump. Production of injectors and ECUs is con-

centrated in Thailand, but we are pursuing a global

backup production strategy to distribute the risks associ-

ated with centralized production. Specifically, we have

tapped the Marumori Plant in Japan to make injectors

and the plant in Indonesia to make engine control units.

Incidentally, we have decided to build a second plant in

Indonesia, and this facility will further enhance our ability

to meet wider demand for fuel injection systems.

30

25

20

15

10

5

0

CarburetorFuel Injection

■ Changes in Production Output for Keihin-Made　 Carburetors and Fuel Injection Systems

2012（Forecast）

2008 2009 2010 2011

1.67 2.66

3.954.77 7.67

19.20 18.2721.44 22.47 21.79

（Milllion unit）

10 Annual Report 2012

Trend toward a slight decrease in carburetorproduction as fuel injection system production increases

■ Seeking Top Spot Worldwide for Fuel Injection Systems: Shift toward Fuel Injection Systems in Asia

Motorcycle and Power Products Automobile Products

Net Sales

88.8 billon

Despite the impact of conversion from local currencies into yen,

sales of motorcycle and power products grew, with a particularly

good contribution from Asia, and prompted a ¥3,426 million

increase over the previous fiscal year, to ¥88,754 million. The

number of carburetors sold hit 22.47 million units, up 4.8% year-

on-year, largely supported by sales in India and Indonesia, at 10.85

million units and 5.26 million units, respectively. Sales of fuel injec-

tion systems were favorable, especially in Thailand and Brazil, for a

worldwide total of 4.77 million units, up 20.8% year-on-year.

In Japan, sales of products for hybrid vehicles expanded,

reflecting considerable growth in the hybrid vehicle market

and an increase in models equipped with our power control

units for electronically controlling the motor and battery in

these ever-more-popular vehicles. Unfortunately, the impact

of conversion from local currencies into yen and conse-

quences arising from the Great East Japan Earthquake and

the Thai floods led to a year-on-year decrease of ¥21,922

million in segment sales, to ¥171,240 million.

65.9%

Percentage of total net sales

34.1%


Net Sales

171.2 billon

Results by Geographical Region Results by Product


Net Sales200,000

150,000

100,000

50,000

0


2011 20122008 2009 2010 2011 20122008 2009 2010

In the motorcycle and power products business, we achieved an increase in sales, mainly supported by demand for products used in large motorcycles and other products exported to Asian markets. In the automobile products business, we showed an increase in sales of products for hybrid vehicles, but overall, sales of automobile products decreased in the domestic market and also in markets in the rest of Asia for various reasons but particularly because of consequences arising from the Great East Japan Earthquake. In the end, net sales from operations in Japan fell ¥1,477 million from the previous fiscal year, to ¥144,982 million.

The impact of conversion from local

currencies into yen and a drop in

sales of automobile products in

North America overshadowed higher

sales of motorcycle and power prod-

ucts in South America, leading to a

¥6,976 million year-on-year decrease

in net sales from operations in the

Americas, to ¥66,096 million.

Asia: A decline in sales of automobile products in India and Thailand, primarily because of the Thai floods, as well as the impact of conversion from local currencies into yen were key factors eroding the benefits realized through higher sales of motorcycle and power products in Indonesia and India. As a result, net sales from operations in Asia retreated ¥9,287 million from the previ-ous fiscal year, to ¥71,370 million. China: Despite the impact of conver-sion from the yuan into yen, sales improved, reflecting our ability to charge a fee on the supply of compo-nents. This underpinned a ¥573 million year-on-year increase in net sales from operations in China, to ¥34,721 million.

Net sales from operations in Europe

tumbled ¥1,348 million from the

previous fiscal year, to ¥4,444 million,

mainly attributed to a decrease in

sales of automobile products.

Net Sales

Americas

120,000

90,000

60,000

30,000

0


Net Sales

Europe

12,000

9,000

6,000

3,000

0

（Millions of yen）Net Sales

Asia China


Net Sales

66.1 billion

Net Sales

71.4 billionNet Sales

34.7 billion

JapanNet Sales

145.0 billion

Net Sales

4.4 billion

2011 20122008 2009 20102011 20122008 2009 2010

120,000

100,000

80,000

60,000

40,000

20,000

0

Asia China

* From 2011, the segment of net sales by geographical region have been changed to five regions from four regions. * Internal sales between regions (intersegment sales) are included in net sales.

Heightened environmental awareness as well as concerns over global warming and tougher exhaust emission restrictions in all

countries are behind the transition toward fuel injection systems for motorcycles that can control the air-fuel mixture more precisely

than conventional carburetors. In developed nations, the process is complete, and in emerging nations, Thailand, Brazil and Taiwan

lead the way. In fiscal 2012, Indonesia—the second largest market in Asia, began the shift toward fuel injection systems. Keihin

holds the largest share of the carburetor market on a global basis and will utilize this position as well as vanguard product develop-

ment capabilities and sharp cost-competitiveness to secure a parallel top spot worldwide for fuel injection systems.

The components of a fuel injection system are

an injector, a throttle body, an engine control unit (ECU)

and a fuel pump. Production of injectors and ECUs is con-

centrated in Thailand, but we are pursuing a global

backup production strategy to distribute the risks associ-

ated with centralized production. Specifically, we have

tapped the Marumori Plant in Japan to make injectors

and the plant in Indonesia to make engine control units.

Incidentally, we have decided to build a second plant in

Indonesia, and this facility will further enhance our ability

to meet wider demand for fuel injection systems.

30

25

20

15

10

5

0

CarburetorFuel Injection

■ Changes in Production Output for Keihin-Made　 Carburetors and Fuel Injection Systems

2012（Forecast）

2008 2009 2010 2011

1.67 2.66

3.954.77 7.67

19.20 18.2721.44 22.47 21.79

（Milllion unit）


Trend toward a slight decrease in carburetorproduction as fuel injection system production increases

■ Seeking Top Spot Worldwide for Fuel Injection Systems: Shift toward Fuel Injection Systems in Asia

Motorcycle and Power Products Automobile Products

Net Sales

88.8 billon

Despite the impact of conversion from local currencies into yen,

sales of motorcycle and power products grew, with a particularly

good contribution from Asia, and prompted a ¥3,426 million

increase over the previous fiscal year, to ¥88,754 million. The

number of carburetors sold hit 22.47 million units, up 4.8% year-

on-year, largely supported by sales in India and Indonesia, at 10.85

million units and 5.26 million units, respectively. Sales of fuel injec-

tion systems were favorable, especially in Thailand and Brazil, for a

worldwide total of 4.77 million units, up 20.8% year-on-year.

In Japan, sales of products for hybrid vehicles expanded,

reflecting considerable growth in the hybrid vehicle market

and an increase in models equipped with our power control

units for electronically controlling the motor and battery in

these ever-more-popular vehicles. Unfortunately, the impact

of conversion from local currencies into yen and conse-

quences arising from the Great East Japan Earthquake and

the Thai floods led to a year-on-year decrease of ¥21,922

million in segment sales, to ¥171,240 million.

65.9%


34.1%


Net Sales

171.2 billon

Results by Geographical Region Results by Product


Extensive flooding in Thailand in Oc-

tober 2011 inundated the facilities

of Keihin Auto Parts (Thailand) Co.,

Ltd., and Keihin Thermal Technology

(Thailand) Co., Ltd., causing damage

that forced production to stop.

However, having implemented a

global production backup strategy,

Keihin was able to swiftly fill cus-

tomers’ orders for systems and com-

ponents. Through companywide

efforts, restoration work to repair

and replace damaged structures and

equipment was quickly executed,

and mass production of all products

resumed in March 2012.

A donation of 10 mil l ion

baht (about ¥25 million) was made

in the name of the Keihin Group to

the government of Ayutthaya to

help in reconstruction of the city and

surrounding area.

In June 2011, we established Keihin Vietnam Co., Ltd., in

Hung Yen to manufacture and market motorcycle and

power products and automobile products. In April 2012,

construction of a new plant was completed. Preparations

are moving forward to commence mass production of auto-

mobile carburetors in August 2012.

■Progress of Reconstruction

2011

October November December January February March April May

2012

New Plant in Vietnam Completed: Response to Growing Demand for Motorcycles

★Onset of floods ★Facility repairs completed

Globally accessible reciprocal backup supply

Mass production of all productsresumes in March

〈Contingency plan〉• Secure inventory• Secure machinery and facilities, ensure safety(Change installation features, deploy forklifts)

After restorationFlood levels at plant

In July 2011, we established Keihin Automotive Systems

India Pvt. Ltd. in Haryana to manufacture and market com-

ponents for motorcycles, power products and automobiles.

This facility will meet the diverse needs of customers in

India, where demand for automobiles is growing.

New Company in India: Response to Growing Demand for Automobiles

In February 2012, we established Keihin de Mexico S.A. DE

C.V., in San Luis Potosi to manufacture and market automo-

bile products. We expect this location to realize highly com-

petitive manufacturing operations through excellent labor

cost efficiency as well as global procurement and wider

local procurement of components—a groupwide strategy—

and thereby become a vital production/supply hub in the

Americas. The ground-breaking ceremony for a new plant

was held in April 2012, and preparations are moving for-

ward on the start of mass production in September 2013.

New Plant in Mexico: Production/Supply Hub for Automobile Products in the Americas

New company in India, the third to date

New plant completed

Opening ceremony for new plant

Keihin Panalfa Ltd.

Keihin FIE Pvt. Ltd.

Keihin AutomotiveSystems IndiaPvt. Ltd.

★Some product lines resume operations

Response to Flooding in Thailand Newly Established Plants and Company


Extensive flooding in Thailand in Oc-

tober 2011 inundated the facilities

of Keihin Auto Parts (Thailand) Co.,

Ltd., and Keihin Thermal Technology

(Thailand) Co., Ltd., causing damage

that forced production to stop.

However, having implemented a

global production backup strategy,

Keihin was able to swiftly fill cus-

tomers’ orders for systems and com-

ponents. Through companywide

efforts, restoration work to repair

and replace damaged structures and

equipment was quickly executed,

and mass production of all products

resumed in March 2012.

A donation of 10 mil l ion

baht (about ¥25 million) was made

in the name of the Keihin Group to

the government of Ayutthaya to

help in reconstruction of the city and

surrounding area.

In June 2011, we established Keihin Vietnam Co., Ltd., in

Hung Yen to manufacture and market motorcycle and

power products and automobile products. In April 2012,

construction of a new plant was completed. Preparations

are moving forward to commence mass production of auto-

mobile carburetors in August 2012.

■Progress of Reconstruction

2011

October November December January February March April May

2012

New Plant in Vietnam Completed: Response to Growing Demand for Motorcycles

★Onset of floods ★Facility repairs completed

Globally accessible reciprocal backup supply

Mass production of all productsresumes in March

〈Contingency plan〉• Secure inventory• Secure machinery and facilities, ensure safety(Change installation features, deploy forklifts)

After restorationFlood levels at plant

In July 2011, we established Keihin Automotive Systems

India Pvt. Ltd. in Haryana to manufacture and market com-

ponents for motorcycles, power products and automobiles.

This facility will meet the diverse needs of customers in

India, where demand for automobiles is growing.

New Company in India: Response to Growing Demand for Automobiles

In February 2012, we established Keihin de Mexico S.A. DE

C.V., in San Luis Potosi to manufacture and market automo-

bile products. We expect this location to realize highly com-

petitive manufacturing operations through excellent labor

cost efficiency as well as global procurement and wider

local procurement of components—a groupwide strategy—

and thereby become a vital production/supply hub in the

Americas. The ground-breaking ceremony for a new plant

was held in April 2012, and preparations are moving for-

ward on the start of mass production in September 2013.

New Plant in Mexico: Production/Supply Hub for Automobile Products in the Americas

New company in India, the third to date

New plant completed

Opening ceremony for new plant

Keihin Panalfa Ltd.

Keihin FIE Pvt. Ltd.

Keihin AutomotiveSystems IndiaPvt. Ltd.

★Some product lines resume operations

Response to Flooding in Thailand Newly Established Plants and Company

Keihin Thermal Technology Corporation


Risks with the potential to significantly influence the decisions of investors are presented below. Forward-

looking statements are based on assumptions made by management of the Keihin Group as of March 31, 2012.

Risk Factors

On January 1, 2012, Keihin acquired from Showa Denko K.K. a 60% equity stake in Thermal Technology Corporation, a

subsidiary engaged in the automotive air-conditioning heat exchanger business, effectively turning the company into a

Keihin subsidiary.

Through this business transfer, the automotive air-conditioning heat exchanger business undertaken by Showa

Denko overseas devolved to subsidiaries of Keihin Thermal Technology Corporation. Consequently, five new companies

were added to the Keihin Group.

Address

Paid-in capital

Equity stakes

Main products

1-480 Inuzuka, Oyama, Tochigi Prefecture

¥400 million

Keihin Corporation 60%, Showa Denko K.K. 40%*Scheduled to become wholly owned subsidiary of Keihin Corporation in January 2014.

Evaporators Heater cores Condensers

Newly added heat exchanger production bases

Note : Number of employees does not include temp staff or part-time employees

1. Changes in the market environmentThe Keihin Group conducts business on a global scale. Economic downturns in the markets where the Group maintains a presence could dampen demand for motor-cycle and power products as well as automobile products, which could in turn limit sales and erode the Group’ s busi-ness results.

2. Exchange rate fluctuationsThe Keihin Group pursues business activities on a global scale. Consequently, exchange rate fluctuations could influence the financial standing of the Group, its business results and its competitive edge.

3. QualityThe Keihin Group endeavors to maintain a worldwide product assurance system and will meticulously strive to sustain and further improve the quality of its products. However, the appearance of unforeseen malfunctions could reflect badly on the Company and thus impair business results.

4. Motorcycle and automobile industry environ-ment and other rulesThe motorcycle and automobile industries are governed by an extensive assortment of rules pertaining to fuel, noise, safety, exhaust emissions, toxic substances as well as levels of pollution from manufacturing plants. Existing rules may be amended and, more often than not, the amended rules are more stringent. The costs to comply with those regula-tions could have a restrictive impact, limiting the scope of the Group’s business activities.

5. Protecting intellectual propertyOver many years, Keihin has accumulated patents and trademarks for the products manufactured by Group companies or has acquired associated rights. These patents and trademarks have played a vital part in the growth of the Company and the Group to date, and the importance of these assets will not change. However, infringement—that is, illegal use—of the Company’s intellectual assets could have a negative effect on the Group’s business activities.

6. High reliance on the Honda GroupIn fiscal 2012, ended March 31, 2012, transactions with the Honda Group represented roughly 90% of Keihin’s consoli-dated net sales. In the future, if the business strategies of

the Honda Group change, or if for some reason the business status that the Keihin Group currently enjoys with the Honda Group changes, the business activities, business results and financial standing of the Keihin Group might be considerably affected.

7. Impact of changing raw material pricesMost of the costs incurred in manufacturing the products of the Keihin Group are raw material costs. Changes in the prices of the raw materials that the Group uses could have a detrimental impact on the Group’s business results.

8. Procurement of raw materials and componentsMembers of the Keihin Group purchase raw materials and components from many reliable external providers selected on the basis of such factors as cost, quality and technol-ogy. The Group relies more heavily on some of these pro-viders than on others. If it becomes impossible to secure a continuously stable supply of essential raw materials and components due to an unforeseen accident or some other event, the business results of the Group could be adversely affected.

9. Disruptive events, including disasters, disease, war, terror attacks, strikes and major accidents The Keihin Group conducts business on a global scale. Unforeseen events, such as natural disasters, the outbreak of disease, the eruption of war, acts of terrorism and major accidents, such as nuclear crises, could cause physical damage, human casualties and leave infrastructures tempo-rarily or permanently unusable, which could then delay or completely prevent procurement of raw materials and components, impede production, the sale of products and logistics, and interrupt services. Such delays to, or suspen-sion of, operations, especially if they prove to be lengthy, could adversely affect the Group’s business activities, finan-cial standing and business results.

10. Lawsuits and legal proceedingsThe Keihin Group conducts business on a global scale and could be subject to lawsuits, investigations under the relevant laws and regulations enforced by the jurisdictions in which the Group operates, as well as other legal proceed-ings. In such cases, an unfavorable judgment could adversely affect the Group’s business activities, financial standing and business results.

Transfer of Automotive Air-Conditioning Heat Exchanger Business Completed

Domestic: About 260 peopleGlobal: About 1,570 people

Keihin Thermal Technology CorporationProduction items: Evaporators Condensers

Ｊａｐａｎ

Keihin Grand Ocean Thermal Technology (Dalian) Co., Ltd.Production items: Evaporators Condensers

China

Keihin Thermal Technology of America, Inc.Production items: Evaporators Condensers

UnitedStates

Keihin Thermal Technology Czech s.r.o.Production items: Condensers

CzechRepublic

Keihin Thermal Technology (Thailand) Co., Ltd Production items: Heater cores 　 Condensers

Thailand

Keihin Thermal Technology Corporation


Risks with the potential to significantly influence the decisions of investors are presented below. Forward-

looking statements are based on assumptions made by management of the Keihin Group as of March 31, 2012.

Risk Factors

On January 1, 2012, Keihin acquired from Showa Denko K.K. a 60% equity stake in Thermal Technology Corporation, a

subsidiary engaged in the automotive air-conditioning heat exchanger business, effectively turning the company into a

Keihin subsidiary.

Through this business transfer, the automotive air-conditioning heat exchanger business undertaken by Showa

Denko overseas devolved to subsidiaries of Keihin Thermal Technology Corporation. Consequently, five new companies

were added to the Keihin Group.

Address

Paid-in capital

Equity stakes

Main products

1-480 Inuzuka, Oyama, Tochigi Prefecture

¥400 million

Keihin Corporation 60%, Showa Denko K.K. 40%*Scheduled to become wholly owned subsidiary of Keihin Corporation in January 2014.

Evaporators Heater cores Condensers

Newly added heat exchanger production bases

Note : Number of employees does not include temp staff or part-time employees

1. Changes in the market environmentThe Keihin Group conducts business on a global scale. Economic downturns in the markets where the Group maintains a presence could dampen demand for motor-cycle and power products as well as automobile products, which could in turn limit sales and erode the Group’ s busi-ness results.

2. Exchange rate fluctuationsThe Keihin Group pursues business activities on a global scale. Consequently, exchange rate fluctuations could influence the financial standing of the Group, its business results and its competitive edge.

3. QualityThe Keihin Group endeavors to maintain a worldwide product assurance system and will meticulously strive to sustain and further improve the quality of its products. However, the appearance of unforeseen malfunctions could reflect badly on the Company and thus impair business results.

4. Motorcycle and automobile industry environ-ment and other rulesThe motorcycle and automobile industries are governed by an extensive assortment of rules pertaining to fuel, noise, safety, exhaust emissions, toxic substances as well as levels of pollution from manufacturing plants. Existing rules may be amended and, more often than not, the amended rules are more stringent. The costs to comply with those regula-tions could have a restrictive impact, limiting the scope of the Group’s business activities.

5. Protecting intellectual propertyOver many years, Keihin has accumulated patents and trademarks for the products manufactured by Group companies or has acquired associated rights. These patents and trademarks have played a vital part in the growth of the Company and the Group to date, and the importance of these assets will not change. However, infringement—that is, illegal use—of the Company’s intellectual assets could have a negative effect on the Group’s business activities.

6. High reliance on the Honda GroupIn fiscal 2012, ended March 31, 2012, transactions with the Honda Group represented roughly 90% of Keihin’s consoli-dated net sales. In the future, if the business strategies of

the Honda Group change, or if for some reason the business status that the Keihin Group currently enjoys with the Honda Group changes, the business activities, business results and financial standing of the Keihin Group might be considerably affected.

7. Impact of changing raw material pricesMost of the costs incurred in manufacturing the products of the Keihin Group are raw material costs. Changes in the prices of the raw materials that the Group uses could have a detrimental impact on the Group’s business results.

8. Procurement of raw materials and componentsMembers of the Keihin Group purchase raw materials and components from many reliable external providers selected on the basis of such factors as cost, quality and technol-ogy. The Group relies more heavily on some of these pro-viders than on others. If it becomes impossible to secure a continuously stable supply of essential raw materials and components due to an unforeseen accident or some other event, the business results of the Group could be adversely affected.

9. Disruptive events, including disasters, disease, war, terror attacks, strikes and major accidents The Keihin Group conducts business on a global scale. Unforeseen events, such as natural disasters, the outbreak of disease, the eruption of war, acts of terrorism and major accidents, such as nuclear crises, could cause physical damage, human casualties and leave infrastructures tempo-rarily or permanently unusable, which could then delay or completely prevent procurement of raw materials and components, impede production, the sale of products and logistics, and interrupt services. Such delays to, or suspen-sion of, operations, especially if they prove to be lengthy, could adversely affect the Group’s business activities, finan-cial standing and business results.

10. Lawsuits and legal proceedingsThe Keihin Group conducts business on a global scale and could be subject to lawsuits, investigations under the relevant laws and regulations enforced by the jurisdictions in which the Group operates, as well as other legal proceed-ings. In such cases, an unfavorable judgment could adversely affect the Group’s business activities, financial standing and business results.

Transfer of Automotive Air-Conditioning Heat Exchanger Business Completed

Domestic: About 260 peopleGlobal: About 1,570 people

Keihin Thermal Technology CorporationProduction items: Evaporators Condensers

Ｊａｐａｎ

Keihin Grand Ocean Thermal Technology (Dalian) Co., Ltd.Production items: Evaporators Condensers

China

Keihin Thermal Technology of America, Inc.Production items: Evaporators Condensers

UnitedStates

Keihin Thermal Technology Czech s.r.o.Production items: Condensers

CzechRepublic

Keihin Thermal Technology (Thailand) Co., Ltd Production items: Heater cores 　 Condensers

Thailand

CorporateAuditors’ O�ce


Basic ConceptAt Keihin, we believe that enhancing corporate governance practices is a top management priority. Good governance will allow us to raise corporate value through global business development and will raise the level of confidence sharehold-ers, customers and society as a whole have in us. With this in mind, we endeavor to strengthen compliance and risk management in developing our operations and strive to improve corporate ethics.

StructureAs a business organization, Keihin seeks to elicit a deeper sense of trust from stakeholders by encouraging everyone within the Group in offices around the world to consider the issues and become ambassadors of the Company with a full understanding of the Keihin Philosophies and our Declaration of Conduct. 　　The Company’s directors frequently discuss executive tasks and their supervision at meetings of important manage-ment groups, including the Board of Directors, which comprises directors with abundant experience in the automo-bile and motorcycle industry, and the Executive Council. 　　The Company also has a Board of Corporate Auditors, comprising four corporate auditors, three of whom are external corporate auditors. The corporate auditors possess a wealth of experience and knowledge, and their insights into specialized fields serve to supervise and audit the execution of business activities and directors’ responsibilities in an indepen-dent and impartial way. 　　Through the introduction of an executive officer system, directors are tasked with either business supervision or business execution duties, which gives the Board of Directors greater flexibility and enhances the speed and efficiency of

decision-making and strategy-implementing efforts. The Keihin Philosophy is the glue that holds the organizational structure together, with headquarters established for each region, business and function, with directors and executive officers (collectively, “assigned directors”) posted to key business and operational headquarters and divisions. The Company also maintains highly effective and efficient corpo-rate structures, including the Executive Council, which discusses important management topics within the scope of authority delegated by the Board of Directors, as well as provides opportunities for issues to be explored in a discussion setting attended by assigned directors.

Measures Taken1. We have installed a corporate governance promotion

officer in the General Affairs Division who verifies matters related to compliance and corporate ethics and ensures improvements are properly applied to operations if and when changes are required.

2. We have a corporate ethics improvement and comments desk, which functions as an access point for suggestions and notification on issues from in-house sources.

3. The Legal Affairs Department was split off from the existing headquarters to reinforce its role.

4. For compliance and risk management, especially, self-checks are undertaken by business and operational headquarters and divisions on a regular basis, using a checklist, and the results are presented to the director responsible who prepares a plan for improvement.

5. We adhere to Rules of Compliance and Rules Regarding Risk Management and appoint directors responsible for promoting measures associated with compliance and risk, respectively.

（As of June 22, 2012）＊Concurrently serving as director

Auditors

General Shareholders’ Meeting

Board of DirectorsBoard of Corporate Auditors

Risk ManagementO�cer

Corporate GovernanceO�ce

Liaison Committee onGroup Risk

Risk ManagementO�ce

External Auditors

Organizational Structure

Management Council

BusinessManagement

& SalesOperations

ProductionOperations

QualityAssuranceOperations

AmericasOperations

ChinaOperations

IntellectualProperty and Legal Division

R & DOperations

Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries

PurchasingOperations

BusinessAdministration

Operations

AsiaOperations

EuropeOperations

Corporate Ethics Improvementand Comments Desk

Auditors’ O�ce

(InternalAudit Division)

CorporatePlanning

O�ce

Legal andIntellectual

PropertyDepartment

AuditO�ce

Subsidiaries

Senior Managing Director andRepresentative Director

Kazuoki Ukiana


Masaaki Koike


Masami Watanabe


Hiroshi Irino

President & CEO andRepresentative Director

Tsuneo Tanai

President & CEO andRepresentative DirectorSenior Managing Director andRepresentative DirectorsDirectors

Excutive Officers

Senior Excutive Officers

Corporate Officers

Corporate Auditors(full time)

Corporate Auditors

Tsuneo Tanai

Kazuoki Ukina Masami Watanabe Masaaki Koike Hiroshi Irino

Kazuhiro Hashiyama Koki Onuma Takeshi Iwata Chugo Sato

Takashi Namari Genichiro Konno

Katsuyuki Matsui Hidetoshi Saito

Yasuhiko Narita Masato Tsukahara

Kazuhiro Hashiyama* Koki Onuma* Takeshi Iwata*

Chugo Sato* Hiroshi Yoshizawa Takashi Namari* Hiroshi Seikai

Nobuaki Suzuki Toru Mitsubori Toshihiro Kuroki Genichiro Konno*

Hirohisa Amano

Mikihito Kawakatsu Masahiro Inoue Shinichi Omachi Seiichi Shindo

Yusuke Takayama Masaaki Takahashi

President

Compliance O�cer

Corporate Governance Directors and Corporate Auditors

CorporateAuditors’ O�ce


Basic ConceptAt Keihin, we believe that enhancing corporate governance practices is a top management priority. Good governance will allow us to raise corporate value through global business development and will raise the level of confidence sharehold-ers, customers and society as a whole have in us. With this in mind, we endeavor to strengthen compliance and risk management in developing our operations and strive to improve corporate ethics.

StructureAs a business organization, Keihin seeks to elicit a deeper sense of trust from stakeholders by encouraging everyone within the Group in offices around the world to consider the issues and become ambassadors of the Company with a full understanding of the Keihin Philosophies and our Declaration of Conduct. 　　The Company’s directors frequently discuss executive tasks and their supervision at meetings of important manage-ment groups, including the Board of Directors, which comprises directors with abundant experience in the automo-bile and motorcycle industry, and the Executive Council. 　　The Company also has a Board of Corporate Auditors, comprising four corporate auditors, three of whom are external corporate auditors. The corporate auditors possess a wealth of experience and knowledge, and their insights into specialized fields serve to supervise and audit the execution of business activities and directors’ responsibilities in an indepen-dent and impartial way. 　　Through the introduction of an executive officer system, directors are tasked with either business supervision or business execution duties, which gives the Board of Directors greater flexibility and enhances the speed and efficiency of

decision-making and strategy-implementing efforts. The Keihin Philosophy is the glue that holds the organizational structure together, with headquarters established for each region, business and function, with directors and executive officers (collectively, “assigned directors”) posted to key business and operational headquarters and divisions. The Company also maintains highly effective and efficient corpo-rate structures, including the Executive Council, which discusses important management topics within the scope of authority delegated by the Board of Directors, as well as provides opportunities for issues to be explored in a discussion setting attended by assigned directors.

Measures Taken1. We have installed a corporate governance promotion

officer in the General Affairs Division who verifies matters related to compliance and corporate ethics and ensures improvements are properly applied to operations if and when changes are required.

2. We have a corporate ethics improvement and comments desk, which functions as an access point for suggestions and notification on issues from in-house sources.

3. The Legal Affairs Department was split off from the existing headquarters to reinforce its role.

4. For compliance and risk management, especially, self-checks are undertaken by business and operational headquarters and divisions on a regular basis, using a checklist, and the results are presented to the director responsible who prepares a plan for improvement.

5. We adhere to Rules of Compliance and Rules Regarding Risk Management and appoint directors responsible for promoting measures associated with compliance and risk, respectively.

（As of June 22, 2012）＊Concurrently serving as director

Auditors

General Shareholders’ Meeting

Board of DirectorsBoard of Corporate Auditors

Risk ManagementO�cer

Corporate GovernanceO�ce

Liaison Committee onGroup Risk

Risk ManagementO�ce

External Auditors

Organizational Structure

Management Council

BusinessManagement

& SalesOperations

ProductionOperations

QualityAssuranceOperations

AmericasOperations

ChinaOperations

IntellectualProperty and Legal Division

R & DOperations

Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries

PurchasingOperations

BusinessAdministration

Operations

AsiaOperations

EuropeOperations

Corporate Ethics Improvementand Comments Desk

Auditors’ O�ce

(InternalAudit Division)

CorporatePlanning

O�ce

Legal andIntellectual

PropertyDepartment

AuditO�ce

Subsidiaries


Kazuoki Ukiana


Masaaki Koike


Masami Watanabe


Hiroshi Irino

President & CEO andRepresentative Director

Tsuneo Tanai

President & CEO andRepresentative DirectorSenior Managing Director andRepresentative DirectorsDirectors

Excutive Officers

Senior Excutive Officers

Corporate Officers

Corporate Auditors(full time)

Corporate Auditors

Tsuneo Tanai

Kazuoki Ukina Masami Watanabe Masaaki Koike Hiroshi Irino

Kazuhiro Hashiyama Koki Onuma Takeshi Iwata Chugo Sato

Takashi Namari Genichiro Konno

Katsuyuki Matsui Hidetoshi Saito

Yasuhiko Narita Masato Tsukahara

Kazuhiro Hashiyama* Koki Onuma* Takeshi Iwata*

Chugo Sato* Hiroshi Yoshizawa Takashi Namari* Hiroshi Seikai

Nobuaki Suzuki Toru Mitsubori Toshihiro Kuroki Genichiro Konno*

Hirohisa Amano

Mikihito Kawakatsu Masahiro Inoue Shinichi Omachi Seiichi Shindo

Yusuke Takayama Masaaki Takahashi

President

Compliance O�cer

Corporate Governance Directors and Corporate Auditors

400,000

300,000

200,000

100,000

020122008 2009 2010 2011

400,000

300,000

200,000

100,000

020122008 2009 2010 2011


2008 2009 2010 2011 2012 2012

¥ 339,321 ¥ 288,337 ¥ 255,938

182,094 152,729 132,464 108,227 83,203 67,960 91,453 92,336 67,643

10,862 7,764 5,273 (53,315) (47,695) (48,052)

- 76,862 69,639 - 211,475 186,299

81,603 - - 117,055 - - 74,720 - - 65,943 - -

24,009 11,609 13,717 24,457 9,887 15,362 20,781 1,798 14,239 11,201 (5,625) 7,634

14,983 14,404 14,150 19,129 17,975 9,366

¥ 148,183 ¥ 126,938 ¥ 136,503 213,502 183,751 193,741 151.44 (76.05) 103.21

36.00 28.00 21.00 1,716.16 1,481.22 1,580.33

¥ 33,734 ¥ 17,858 ¥ 16,661 $ 66,464(23,038) (16,814) (11,707) (200,069)(6,119) 54 (2,163) (56,214)34,369 31,856 34,506

¥ 278,491

146,45973,07280,656

5,793- - 30,650 34,147

(61,636)

85,329193,162

----

21,59821,69519,57412,324

- - 11,845 8,80215,08612,518

¥ 140,927193,557166.63

25.001,658.08

¥ 27,355(10,855)(6,423)42,638

¥ 5,463(16,444)(4,620)25,865 314,699

For the years ended March 31, 2008, 2009, 2010, 2011 and 2012

Notes :1. The above amounts were prepared under accounting principles generally accepted in Japan.2. U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥82.19=US$1. (See Note 3 to the Consolidated Financial Statements on page 26.)3. From fiscal 2009, Keihin’s four previous business segments have been consolidated into two business segments.4. Intersegment sales is included in net sales by geographical segment.5. From fiscal 2010, ended March 31, 2011, the Company applies “Accounting Standard for Disclosures about Segments of an Enterprise and Related information”

(ASBJ Statement No. 17, issued March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related information” (ASBJ Guidance No. 20, issued March 21, 2008). Consequently, the breakdown of net sales by geographical segment increased to five from four.

6. From fiscal 2011, the Company applies the “Accounting Standard for Comprehensive Income” (ASBJ Statement No. 25, issued June 30, 2010).

Results of Operations

Net Sales

Business conditions were good, especially in China and India, but corporate activities were severely impacted by the consequences of

devastating events, notably, the Great East Japan Earthquake and flooding in Thailand. Unable to overcome these challenges, Keihin

Corporation (the “Company”) saw consolidated net sales shrink 6.6% year-on-year, to ¥259,994 million (US$3,163 million).

A breakdown of sales by geographical region shows that operations in Japan contributed ¥144,982 million (US$1,764

million) to net sales, down 1.0% from the previous fiscal year despite higher sales of products exported to Asia and products for large

motorcycles, because those combined increases failed to offset lower sales of automobile products for the domestic market. Opera-

tions in the Americas posted a 9.6% drop in sales, to ¥66,096 million (US$804 million), partly due to the impact of exchange rates

on local-currency amounts converted into yen and partly due to a decline in sales of automobile products in North America. Opera-

tions in Asia, excluding China, generated ¥71,370 million (US$868 million), down 11.5%, despite higher sales of components for

motorcycles and power products, because regional developments, most notably the flooding in Thailand, hampered sales of automo-

bile products in Thailand and India. Operations in China made sales of ¥34,721 million (US$422 million), up 1.7%, reflecting the shift

to a fee-based component supply structure for automobile products. Operations in Europe saw sales retreat 23.3%, to ¥4,444

million (US$54 million), mainly drawn down by poor sales of automobile products.

Income and Expenses

Consolidated operating income tumbled 49.9%, to ¥10,818 million (US$132 million), reflecting the above-mentioned lower net sales

starting point as well as higher expenses, mainly for personnel and R&D, and the impact of yen appreciation on local-currency results.

A breakdown of operating income by geographical region shows an operating loss of ¥486 million (US$6 million) in Japan,

dropping from the previous year. Operations in the Americas also posted an operating loss, at ¥920 million (US$11 million). Opera-

tions in Asia, excluding China, saw operating income decrease 10.3%, to ¥9,685 million (US$118 million). Operations in China also

recorded a drop in operating income, falling 28.5%, to ¥2,819 million (US$34 million). Operating income from operations in Europe

retreated 58.0%, to ¥77 million (US$1 million).

Ordinary income settled at ¥11,458 million (US$139 million) on a consolidated basis, down 47.2%, and income before

income taxes and minority interests amounted to ¥10,174 million (US$124 million), down 48.0%. Net income was squeezed to

¥4,239 million (US$52 million), a significant decrease of 65.6% from fiscal 2011.

For the year:

　Net sales

　　Results by geographical region

　　　Japan

　　　Americas

　　　Asia

　　　Europe

　　　Consolidated adjustments

　　Results by products

　　　Motorcycles and power products

　　　Mechanical products for automobiles




　　　Electronic control units

　　　Air-conditioning systems

　Operating income

　Ordinary income

　Income before income taxes and minority interests

　Net income (loss)

　Research and development expenses

　Capital expenditures

At year-end:

　Total net assets

　Total assets

Per share of common stock (yen and U.S. dollars):

　Net income (loss): Basic

　　　　　　　　 Cash dividends

　　　　　　　　 Net assets

Cash flows:

　Cash flows from operating activities

　Cash flows from investing activities

　Cash flows from financing activities

　Cash and cash equivalents at end of year

　　　China

　Comprehensive income



Notes: Keihin’s four previous business segments were consolidated into two business segments in fiscal 2009.

Notes: Intersegment sales is included in net sales by geographical segment.

Japan

Americas

Net sales by geographical segmentMotorcycles and power products

Mechanical products for automobiles

Net sales by productsElectronic control units

Air-conditioning systems

AsiaChina

Europe


$ 3,163,332

1,763,986804,190868,348

54,076(749,717)

1,079,8712,083,461

----

131,630139,415123,78151,581

201,326158,333

$ 1,750,9372,466,535

0.70

0.3220.11

422,449

13,124

¥ 259,994

144,98266,09671,370

4,44434,721

(61,619)

88,754171,240

----

10,81811,45810,1744,2391,078

16,54713,013

¥ 143,909202,724

57.32

26.001,652.61

Five-Year Summary of Selected Financial Data Financial Review

400,000

300,000

200,000

100,000

020122008 2009 2010 2011

400,000

300,000

200,000

100,000

020122008 2009 2010 2011


2008 2009 2010 2011 2012 2012

¥ 339,321 ¥ 288,337 ¥ 255,938

182,094 152,729 132,464 108,227 83,203 67,960 91,453 92,336 67,643

10,862 7,764 5,273 (53,315) (47,695) (48,052)

- 76,862 69,639 - 211,475 186,299

81,603 - - 117,055 - - 74,720 - - 65,943 - -

24,009 11,609 13,717 24,457 9,887 15,362 20,781 1,798 14,239 11,201 (5,625) 7,634

14,983 14,404 14,150 19,129 17,975 9,366

¥ 148,183 ¥ 126,938 ¥ 136,503 213,502 183,751 193,741 151.44 (76.05) 103.21

36.00 28.00 21.00 1,716.16 1,481.22 1,580.33

¥ 33,734 ¥ 17,858 ¥ 16,661 $ 66,464(23,038) (16,814) (11,707) (200,069)(6,119) 54 (2,163) (56,214)34,369 31,856 34,506

¥ 278,491

146,45973,07280,656

5,793- - 30,650 34,147

(61,636)

85,329193,162

----

21,59821,69519,57412,324

- - 11,845 8,80215,08612,518

¥ 140,927193,557166.63

25.001,658.08

¥ 27,355(10,855)(6,423)42,638

¥ 5,463(16,444)(4,620)25,865 314,699

For the years ended March 31, 2008, 2009, 2010, 2011 and 2012

Notes :1. The above amounts were prepared under accounting principles generally accepted in Japan.2. U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥82.19=US$1. (See Note 3 to the Consolidated Financial Statements on page 26.)3. From fiscal 2009, Keihin’s four previous business segments have been consolidated into two business segments.4. Intersegment sales is included in net sales by geographical segment.5. From fiscal 2010, ended March 31, 2011, the Company applies “Accounting Standard for Disclosures about Segments of an Enterprise and Related information”

(ASBJ Statement No. 17, issued March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related information” (ASBJ Guidance No. 20, issued March 21, 2008). Consequently, the breakdown of net sales by geographical segment increased to five from four.

6. From fiscal 2011, the Company applies the “Accounting Standard for Comprehensive Income” (ASBJ Statement No. 25, issued June 30, 2010).

Results of Operations

Net Sales

Business conditions were good, especially in China and India, but corporate activities were severely impacted by the consequences of

devastating events, notably, the Great East Japan Earthquake and flooding in Thailand. Unable to overcome these challenges, Keihin

Corporation (the “Company”) saw consolidated net sales shrink 6.6% year-on-year, to ¥259,994 million (US$3,163 million).

A breakdown of sales by geographical region shows that operations in Japan contributed ¥144,982 million (US$1,764

million) to net sales, down 1.0% from the previous fiscal year despite higher sales of products exported to Asia and products for large

motorcycles, because those combined increases failed to offset lower sales of automobile products for the domestic market. Opera-

tions in the Americas posted a 9.6% drop in sales, to ¥66,096 million (US$804 million), partly due to the impact of exchange rates

on local-currency amounts converted into yen and partly due to a decline in sales of automobile products in North America. Opera-

tions in Asia, excluding China, generated ¥71,370 million (US$868 million), down 11.5%, despite higher sales of components for

motorcycles and power products, because regional developments, most notably the flooding in Thailand, hampered sales of automo-

bile products in Thailand and India. Operations in China made sales of ¥34,721 million (US$422 million), up 1.7%, reflecting the shift

to a fee-based component supply structure for automobile products. Operations in Europe saw sales retreat 23.3%, to ¥4,444

million (US$54 million), mainly drawn down by poor sales of automobile products.

Income and Expenses

Consolidated operating income tumbled 49.9%, to ¥10,818 million (US$132 million), reflecting the above-mentioned lower net sales

starting point as well as higher expenses, mainly for personnel and R&D, and the impact of yen appreciation on local-currency results.

A breakdown of operating income by geographical region shows an operating loss of ¥486 million (US$6 million) in Japan,

dropping from the previous year. Operations in the Americas also posted an operating loss, at ¥920 million (US$11 million). Opera-

tions in Asia, excluding China, saw operating income decrease 10.3%, to ¥9,685 million (US$118 million). Operations in China also

recorded a drop in operating income, falling 28.5%, to ¥2,819 million (US$34 million). Operating income from operations in Europe

retreated 58.0%, to ¥77 million (US$1 million).

Ordinary income settled at ¥11,458 million (US$139 million) on a consolidated basis, down 47.2%, and income before

income taxes and minority interests amounted to ¥10,174 million (US$124 million), down 48.0%. Net income was squeezed to

¥4,239 million (US$52 million), a significant decrease of 65.6% from fiscal 2011.

For the year:

　Net sales

　　Results by geographical region

　　　Japan

　　　Americas

　　　Asia

　　　Europe

　　　Consolidated adjustments







　　　Electronic control units

　　　Air-conditioning systems

　Operating income

　Ordinary income

　Income before income taxes and minority interests

　Net income (loss)

　Research and development expenses

　Capital expenditures

At year-end:

　Total net assets

　Total assets

Per share of common stock (yen and U.S. dollars):

　Net income (loss): Basic

　　　　　　　　 Cash dividends

　　　　　　　　 Net assets

Cash flows:

　Cash flows from operating activities

　Cash flows from investing activities

　Cash flows from financing activities

　Cash and cash equivalents at end of year

　　　China

　Comprehensive income



Notes: Keihin’s four previous business segments were consolidated into two business segments in fiscal 2009.

Notes: Intersegment sales is included in net sales by geographical segment.

Japan

Americas

Net sales by geographical segmentMotorcycles and power products

Mechanical products for automobiles

Net sales by productsElectronic control units

Air-conditioning systems

AsiaChina

Europe


$ 3,163,332

1,763,986804,190868,348

54,076(749,717)

1,079,8712,083,461

----

131,630139,415123,78151,581

201,326158,333

$ 1,750,9372,466,535

0.70

0.3220.11

422,449

13,124

¥ 259,994

144,98266,09671,370

4,44434,721

(61,619)

88,754171,240

----

10,81811,45810,1744,2391,078

16,54713,013

¥ 143,909202,724

57.32

26.001,652.61

Five-Year Summary of Selected Financial Data Financial Review


R&D Expenses

The Group’s basic policy on R&D is to pursue the development of system products backed by sophisticated technology. Toward this

end, the Group assumes a front-loading approach to R&D that anticipates customer trends.

R&D is undertaken by the Company’s development departments. Until fiscal 2011, the Company maintained R&D depart-

ments within the framework of its two business headquarters. However, from fiscal 2012, the departments have been positioned

independently as development departments to pursue highly efficient R&D activities demonstrating greater synergy between the

motorcycle and power product business and the automobile product business.

In fiscal 2012, R&D expenses reached ¥16,547 million (US$201 million).

Capital Expenditures

In fiscal 2012, capital expenditures reached ¥13,013 million (US$158 million), up 4.0% from a year earlier. A breakdown of this

amount reveals that ¥8,842 million (US$108 million) went to production facilities, up 23.8%, while the allocation for R&D was ¥1,061

million (US$13 million), up 9.3%. Other investments, including intangible assets, decreased 29.4%, to ¥3,109 million (US$38 million).

A breakdown of production investment by geographical region reveals that ¥2,813 million (US$34 million) was allocated to

operations in Japan, ¥2,553 million (US$31 million) to the Americas, ¥2,819 million (US$34 million) to Asia excluding China, ¥636

million (US$8 million) to China, and ¥21 million (US$0.3 million) to Europe.

Cash Flows

Cash and cash equivalents as of March 31, 2012, totaled ¥25,865 million (US$315 million), down 39.3% from a year earlier.

Net cash provided by operating activities plummeted 80.0%, to ¥5,463 million (US$66 million), despite increases in trade

notes and accounts receivable and inventories, largely because of the decrease in income before income taxes and minority interests

and reduced depreciation and amortization as well as an increase in trade notes and accounts payable.

Net cash used in investing activities jumped 51.5%, to ¥16,444 million (US$200 million), reflecting the purchase of property,

plant and equipment and intangible assets and the purchase of investment securities.

Net cash used in financing activities fell 28.1%, to ¥4,620 million (US$56 million), with the key applications of cash being

repayment of long-term debt and payment of dividends.

Financial Position

Total assets stood at ¥202,724 million (US$2,467 million) on March 31, 2012, up 4.7% from a year earlier. Net assets grew 2.1%, to

¥143,909 million (US$1,751 million), and net assets per share ware ¥1,652.61 (US$20.11), down ¥5.47 from the previous fiscal year.

The equity ratio slipped 3.1 percentage points, to 60.3%.

Operating income

Net income(loss)

Operating income and net income (loss) Capital expenditures

24,000

18,000

12,000

6,000

0

(Millions of yen)

20122008 2009 2010 2011

Research and development expenses

20,000

15,000

10,000

5,000

0

(Millions of yen)

20122008 2009 2010 2011

30,000

20,000

10,000

0

-10,000

(Millions of yen)

20122008 2009 2010 2011

40,000

30,000

20,000

10,000

0

(Millions of yen)

20122008 2009 2010 2011

Total assets

Total net assets


240,000

180,000

120,000

60,000

0

(Millions of yen)

20122008 2009 2010 2011

Cash provided by operating activities


R&D Expenses

The Group’s basic policy on R&D is to pursue the development of system products backed by sophisticated technology. Toward this

end, the Group assumes a front-loading approach to R&D that anticipates customer trends.

R&D is undertaken by the Company’s development departments. Until fiscal 2011, the Company maintained R&D depart-

ments within the framework of its two business headquarters. However, from fiscal 2012, the departments have been positioned

independently as development departments to pursue highly efficient R&D activities demonstrating greater synergy between the

motorcycle and power product business and the automobile product business.

In fiscal 2012, R&D expenses reached ¥16,547 million (US$201 million).

Capital Expenditures

In fiscal 2012, capital expenditures reached ¥13,013 million (US$158 million), up 4.0% from a year earlier. A breakdown of this

amount reveals that ¥8,842 million (US$108 million) went to production facilities, up 23.8%, while the allocation for R&D was ¥1,061

million (US$13 million), up 9.3%. Other investments, including intangible assets, decreased 29.4%, to ¥3,109 million (US$38 million).

A breakdown of production investment by geographical region reveals that ¥2,813 million (US$34 million) was allocated to

operations in Japan, ¥2,553 million (US$31 million) to the Americas, ¥2,819 million (US$34 million) to Asia excluding China, ¥636

million (US$8 million) to China, and ¥21 million (US$0.3 million) to Europe.

Cash Flows

Cash and cash equivalents as of March 31, 2012, totaled ¥25,865 million (US$315 million), down 39.3% from a year earlier.

Net cash provided by operating activities plummeted 80.0%, to ¥5,463 million (US$66 million), despite increases in trade

notes and accounts receivable and inventories, largely because of the decrease in income before income taxes and minority interests

and reduced depreciation and amortization as well as an increase in trade notes and accounts payable.

Net cash used in investing activities jumped 51.5%, to ¥16,444 million (US$200 million), reflecting the purchase of property,

plant and equipment and intangible assets and the purchase of investment securities.

Net cash used in financing activities fell 28.1%, to ¥4,620 million (US$56 million), with the key applications of cash being

repayment of long-term debt and payment of dividends.

Financial Position

Total assets stood at ¥202,724 million (US$2,467 million) on March 31, 2012, up 4.7% from a year earlier. Net assets grew 2.1%, to

¥143,909 million (US$1,751 million), and net assets per share ware ¥1,652.61 (US$20.11), down ¥5.47 from the previous fiscal year.

The equity ratio slipped 3.1 percentage points, to 60.3%.

Operating income

Net income(loss)

Operating income and net income (loss) Capital expenditures

24,000

18,000

12,000

6,000

0

(Millions of yen)

20122008 2009 2010 2011

Research and development expenses

20,000

15,000

10,000

5,000

0

(Millions of yen)

20122008 2009 2010 2011

30,000

20,000

10,000

0

-10,000

(Millions of yen)

20122008 2009 2010 2011

40,000

30,000

20,000

10,000

0

(Millions of yen)

20122008 2009 2010 2011

Total assets

Total net assets


240,000

180,000

120,000

60,000

0

(Millions of yen)

20122008 2009 2010 2011

Cash provided by operating activities

12

Consolidated Balance SheetsKeihin Corporation and Consolidated SubsidiariesAs of March 31, 2011 and 2012

Millions of yenThousands ofU.S. dollars

ASSETS 2011 2012 2012

Current assets:

Cash and deposits ¥ 32,212 ¥ 23,817 $ 289,782

Trade notes and accounts receivable 34,707 43,539 529,729

Securities 14,500 5,600 68,135

Merchandise and finished products 8,834 10,530 128,112

Work in process 4,386 5,690 69,230

Raw materials and supplies 13,910 19,765 240,470

Deferred tax assets 3,403 3,379 41,108

Other current assets 5,476 6,497 79,067

Total current assets 117,428 118,817 1,445,634

Non-current assets:

Property, plant and equipment:

Buildings and structures 40,342 43,569 530,102

Less: accumulated depreciation (22,445) (24,849) (302,331)

Buildings and structures, net 17,897 18,720 227,771

Machinery, equipment and vehicles 116,368 124,815 1,518,620

Less: accumulated depreciation (91,517) (99,283) (1,207,972)

Machinery, equipment and vehicles, net 24,851 25,532 310,648

Tools, furniture and fixtures 32,034 34,147 415,467

Less: accumulated depreciation (26,954) (28,597) (347,935)

Tools, furniture and fixtures, net 5,080 5,550 67,532

Land 9,228 9,185 111,748

Leased assets ― 253 3,081

Less: accumulated depreciation ― (17) (205)

Leased assets, net ― 236 2,876

Construction in progress 6,585 8,971 109,137

Total property, plant and equipment 63,641 68,194 829,712

Intangible assets 2,598 2,713 33,004

Investments and other assets:

Investment securities 4,725 6,020 73,249

Long-term loans receivable 464 438 5,335

Deferred tax assets 2,090 1,805 21,957

Other assets 2,631 4,749 57,793

Less: allowance for doubtful accounts (20) (12) (149)

Total investments and other assets 9,890 13,000 158,185

Total non-current assets 76,129 83,907 1,020,901

Total assets ¥ 193,557 ¥ 202,724 $ 2,466,535

See accompanying notes to consolidated financial statements.


13


LIABILITIES AND NET ASSETS 2011 2012 2012

Current liabilities:

Trade notes and accounts payable ¥ 27,694 ¥ 33,725 $ 410,329

Short-term loans payable 1,525 1,046 12,724

Current portion of long-term debt 1,260 601 7,315

Accrued expenses 8,675 9,438 114,842

Lease obligations ― 25 308

Income taxes payable 1,812 1,816 22,091

Accrued product warranties 594 437 5,323

Accrued bonuses for directors and statutory auditors 93 63 767

Provision for loss on disaster 1,300 52 635

Deferred tax liabilities 35 24 291

Asset retirement obligations 16 ― ―

Other current liabilities 4,067 6,193 75,332

Total current liabilities 47,071 53,420 649,957

Long-term liabilities:

Long-term debt 600 ― ―

Lease obligations ― 211 2,567

Deferred tax liabilities 813 1,689 20,556

Accrued retirement benefits for employees 1,800 1,481 18,020

Accrued retirement benefits for directors and statutory auditors 424 433 5,274

Asset retirement obligations 200 156 1,897

Other long-term liabilities 1,722 1,425 17,327

Total long-term liabilities 5,559 5,395 65,641

Total liabilities 52,630 58,815 715,598

Shareholders’ equity:

Common stock, no par value: 6,932 6,932 84,345

Authorized: 240,000,000 shares

Issued: 73,985,246 shares in 2011 and 2012

Capital surplus 7,941 7,941 96,615

Retained earnings 121,168 123,472 1,502,278

Less: Treasury stock, at cost; 23,586 shares in 2011 and 24,031 shares in 2012 (34) (35) (424)

Total shareholders’ equity 136,007 138,310 1,682,814

Accumulated other comprehensive income (loss) :

Unrealized gains on available-for-sale securities, net 2,282 2,510 30,534

Unrealized losses from hedging instruments, net (5) ― ―

Foreign currency translation adjustments, net (15,649) (18,591) (226,191)

Total accumulated other comprehensive income (loss) (13,372) (16,081) (195,657)

Minority interests 18,292 21,680 263,780

Total net assets 140,927 143,909 1,750,937

Total liabilities and net assets ¥ 193,557 ¥ 202,724 $ 2,466,535


14

Consolidated Statements of IncomeKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2011 and 2012


2011 2012 2012

Net sales ¥ 278,491 ¥ 259,994 $ 3,163,332Cost of sales 238,452 230,401 2,830,270Gross profit 40,039 29,593 360,062Total selling, general and administrative expenses 18,441 18,775 228,432Operating income 21,598 10,818 131,630Non-operating income:

Interest income 504 467 5,676Dividends income 397 290 3,529Other 596 710 8,642Total non-operating income 1,497 1,467 17,847

Non-operating expenses:Interest expense 189 95 1,152Foreign currency exchange loss, net 873 392 4,764Loss on disposal of property, plant and equipment 191 133 1,619Other 147 207 2,527Total non-operating expenses 1,400 827 10,062

Ordinary income 21,695 11,458 139,415Extraordinary income：

Gain on sale of property, plant and equipment ― 512 6,224 Gain on negative goodwill 1,192 197 2,391

Gain on sale of investment in an affiliated company ― 221 2,696 Reversal of accrued product warranties 194 ― ―

Insurance income ― 752 9,151 Other ― 1 11 Total extraordinary income 1,386 1,683 20,473Extraordinary losses： Loss on change of equity in a consolidated subsidiary ― 93 1,136 Impairment loss on property, plant and equipment 133 224 2,721 Loss on disaster 1,520 2,340 28,472 Provision for loss on disaster 1,300 ― ―

Loss on liquidation of subsidiary 416 ― ―

Loss on adjustment for change of accounting standard for asset retirement obligations 138 ― ―

Other ― 310 3,778 Total extraordinary losses 3,507 2,967 36,107Income before income taxes and minority interests 19,574 10,174 123,781Income taxes:

Current 5,302 5,203 63,306Deferred (814) (4) (48)Total income taxes 4,488 5,199 63,258

Net income before minority interests 15,086 4,975 60,523Minority interests 2,762 736 8,942Net income ¥ 12,324 ¥ 4,239 $ 51,581

Yen U.S. dollarsPer share of common stock:

Basic net income ¥ 166.63 ¥ 57.32 $ 0.70 Cash dividends ¥ 25.00 ¥ 26.00 $ 0.32



15

Consolidated Statements of Comprehensive IncomeKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2011 and 2012


2011 2012 2012

Net income before minority interests ¥ 15,086 ¥ 4,975 $ 60,523Other comprehensive loss

Unrealized (losses) gains on available-for-sale securities, net (194) 228 2,775Unrealized (losses) gains from hedging instruments, net (5) 5 63Foreign currency translation adjustments, net (6,085) (4,130) (50,237)Other comprehensive loss (6,284) (3,897) (47,399)

Comprehensive Income ¥ 8,802 ¥ 1,078 $ 13,124Comprehensive income attributable to :Shareholders of Keihin Corporation 7,468 1,531 18,634Minority interests 1,334 (453) (5,510)



16

Consolidated Statements of Changes in Net AssetsKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2011 and 2012


NET ASSETS 2011 2012 2012Shareholders’ equityCommon Stock

Balance at beginning of current fiscal year ¥ 6,932 ¥ 6,932 $ 84,345Changes during current fiscal year

Net change ― ― ―

Balance at end of current fiscal year ¥ 6,932 ¥ 6,932 $ 84,345Capital surplus


Net change ― ― ―

Balance at end of current fiscal year ¥ 7,941 ¥ 7,941 $ 96,615Retained earnings

Balance at beginning of current fiscal year ¥ 110,561 ¥ 121,168 $ 1,474,250Changes during current fiscal year

Dividends from surplus (1,701) (1,923) (23,397)Net income 12,324 4,239 51,581Decrease due to change in scope of consolidation (16) (12) (156)Net change 10,607 2,304 28,028

Balance at end of current fiscal year ¥ 121,168 ¥ 123,472 $ 1,502,278Treasury stock

Balance at beginning of current fiscal year ¥ (31) ¥ (34) $ (416)Changes during current fiscal year

Purchase of treasury stock (3) (1) (8)Net change (3) (1) (8)

Balance at end of current fiscal year ¥ (34) ¥ (35) $ (424)Total shareholders’ equity

Balance at beginning of current fiscal year ¥ 125,403 ¥ 136,007 $ 1,654,794Changes during current fiscal year

Dividends from surplus (1,701) (1,923) (23,397) Net income 12,324 4,239 51,581

Decrease due to change in scope of consolidation (16) (12) (156) Purchase of treasury stock (3) (1) (8) Net change 10,604 2,303 28,020

Balance at end of current fiscal year ¥ 136,007 ¥ 138,310 $ 1,682,814Accumulated other comprehensive income (loss)

Unrealized gains on available-for-sale securities, net Balance at beginning of current fiscal year ¥ 2,480 ¥ 2,282 $ 27,759Changes during current fiscal year

Changes in items other than shareholders’ equity, net (198) 228 2,775Net change (198) 228 2,775

Balance at end of current fiscal year ¥ 2,282 ¥ 2,510 $ 30,354Unrealized losses from hedging instruments, net

Balance at beginning of current fiscal year ¥ ― ¥ (5) $ (63)Changes during current fiscal year

Changes in items other than shareholders’ equity, net (5) 5 63Net change (5) 5 63

Balance at end of current fiscal year ¥ (5) ¥ ― $ ―Foreign currency translation adjustments, net

Balance at beginning of current fiscal year ¥ (10,996) ¥ (15,649) $ (190,406)Changes during current fiscal year

Changes in items other than shareholders’ equity, net (4,653) (2,942) (35,785)Net change (4,653) (2,942) (35,785)

Balance at end of current fiscal year ¥ (15,649) ¥ (18,591) $ (226,191)Total accumulated other comprehensive income (loss)

Balance at beginning of current fiscal year ¥ (8,516) ¥ (13,372) $ (162,710)Changes during current fiscal year

Changes in items other than shareholders’ equity, net (4,856) (2,709) (32,947)Net change (4,856) (2,709) (32,947)

Balance at end of current fiscal year ¥ (13,372) ¥ (16,081) $ (195,657)Minority interests


Changes in items other than shareholders’ equity, net (1,324) 3,388 41,215Net change (1,324) 3,388 41,215

Balance at end of current fiscal year ¥ 18,292 ¥ 21,680 $ 263,780Total net assets

Balance at beginning of current fiscal year ¥ 136,503 ¥ 140,927 $ 1,714,649Net change

Dividends from surplus (1,701) (1,923) (23,397)Net income 12,324 4,239 51,581Decrease due to change in scope of consolidation

(16) (12) (156)

Purchase of treasury stock (3) (1) (8)Changes in items other than shareholders’ equity, net (6,180) 679 8,268Net change 4,424 2,982 36,288

Balance at end of current fiscal year 140,927 143,909 1,750,937See accompanying notes to consolidated financial statements.


17

Consolidated Statements of Cash FlowsKeihin Corporation and Consolidated SubsidiariesFor the years ended March 31, 2011 and 2012


2011 2012 2012

Cash flows from operating activities: Income before income taxes and minority interests ¥ 19,574 ¥ 10,174 $ 123,781Depreciation and amortization 13,925 12,817 155,945Impairment loss on property, plant and equipment 133 224 2,721Loss on disposal and sale of property, plant and equipment, net 191 133 1,619Decrease in accrued product warranties (395) (144) (1,747)Decrease in accrued expenses for restructuring (260) ― ―

Increase (decrease) in provision for loss on disaster 1,300 (1,248) (15,183)Decrease in accrued retirement benefits for employees (669) (302) (3,676)Increase in prepaid pension costs (62) (778) (9,468)Increase in accrued retirement benefits for directors and statutory auditors 31 10 116Interest and dividends income (902) (757) (9,205)Interest expense 189 95 1,152Decrease (increase) in trade notes and accounts receivable 3,967 (8,653) (105,280)Increase in inventories (2,128) (7,106) (86,456)(Decrease) increase in trade notes and accounts payable (802) 5,722 69,618Gain on sale of investment in an affiliated company ― (221) (2,696)Gain on negative goodwill (1,192) (197) (2,391)Gain on sale of property, plant and equipment (60) (554) (6,742)Insurance income ― (752) (9,151)Other, net (489) 774 9,430

Subtotal 32,351 9,237 112,387Interest and dividends received 740 426 5,187Interest paid (176) (80) (971)Income taxes paid (5,560) (4,872) (59,290)Proceeds from insurance income ― 752 9,151

Net cash provided by operating activities 27,355 5,463 66,464

Cash flows from investing activities: Net decrease in time deposits 640 165 2,009Purchase of investment in subsidiary ― (1,737) (21,136)Purchase of property, plant and equipment and intangible assets (11,906) (13,185) (160,423)Proceeds from sale of property, plant and equipment and intangible assets 428 889 10,813Purchase of investment securities (219) (3,341) (40,647)Proceeds from sale of investment securities 285 3 34Proceeds from sale of investment in affiliated company ― 648 7,883Payments for long-term loans receivable (599) (516) (6,280)Collection of loans 581 550 6,696Other, net (65) 80 982

Net cash used in investing activities (10,855) (16,444) (200,069)

Cash flows from financing activities: Decrease in short-term loans, net (1,560) (437) (5,323)Repayment of long-term debt (1,844) (1,257) (15,298)Purchase of treasury stock (3) (1) (8)Payments for dividends (1,701) (1,923) (23,397)Payments for dividends to minority shareholders (1,315) (985) (11,983)Other ― (17) (205)

Net cash used in financing activities (6,423) (4,620) (56,214)Effect of exchange rate changes on cash and cash equivalents (2,027) (1,194) (14,525)Net increase (decrease) in cash and cash equivalents 8,050 (16,795) (204,344)Cash and cash equivalents at beginning of year 34,506 42,638 518,778Increase in cash and cash equivalents due to change in scope of consolidation 82 22 265Cash and cash equivalents at end of year ¥ 42,638 ¥ 25,865 $ 314,699



KEIHIN CORPORATION18

Notes to Consolidated Financial Statements

1. Basis of Presentation of Consolidated Financial Statements

Keihin Corporation (the “Company”) and its domestic subsidiaries

maintain their accounting records in accordance with accounting

principles generally accepted in Japan, and foreign subsidiaries of the

Company maintain their books of account in conformity with those of

their countries of domicile.

The accompanying consolidated financial statements have been

compiled from the consolidated financial statements prepared by the

Company as required under the Financial Instruments and Exchange

Law and, therefore, have been prepared in conformity with accounting

principles generally accepted in Japan, which are different in certain

respects as to the application and disclosure requirements of

International Financial Reporting Standards.

The notes to the consolidated financial statements include

information which is not required under accounting principles generally

accepted in Japan, but is presented herein as additional information

solely for the convenience of readers outside Japan.

In the accompanying consolidated financial statements, amounts of

less than one million yen have been rounded.

Certain amounts in the prior year’s consolidated financial statements

have been reclassified to conform to the current year’s presentation.

2. Summary of Significant Accounting Policies(1) Consolidation and Investments in Affiliates

The consolidated financial statements include the accounts of the

Company’s 32 domestic and foreign subsidiaries which the Company

has the ability to effectively control.

Keihin Malaysia Manufacturing SDN. BHD. is newly included in the

scope of consolidation from fiscal 2012 because its impact on overall

results became significant.

In addition, based upon the acquisition of 60% equity in Thermal

Technology Corporation completed on January 1, 2012, Keihin Thermal

Technology Corporation, Keihin Thermal Technology of America, Inc.,

Keihin Thermal Technology (Thailand) Co., Ltd., Grand Ocean-Showa

Auto Air Conditioning (Dalian) Co., Ltd., and Keihin Thermal Technology

Czech s.r.o. are newly included in the scope of consolidation. Since

differences between the fiscal year-ends of these consolidated

subsidiaries and the fiscal year-end for consolidation do not exceed

three months, only balance sheets of these five subsidiaries are

included in the consolidated financial statements.

To promote greater management efficiency in North America, Keihin

Fuel Systems, Inc., was merged into Keihin North America, Inc.,

effective April 1, 2011, and has therefore been eliminated from the

scope of consolidation.

The Company’s three unconsolidated subsidiaries—Keihin de

Mexico S.A. DE C.V., Keihin Vietnam Co., Ltd. and Keihin Automotive

Systems India Pvt. Ltd.—were excluded from the scope of consolidation

because Keihin de Mexico was recently established (February 1, 2012)

and because the total assets, net sales, net income(loss) and retained

earnings of these three companies were immaterial individually and/or in

total to the consolidated financial statements.

The Company’s three unconsolidated subsidiaries above are also

excluded from application of the equity method because management

determined that neither company contributed significantly to net income

and/or retained earnings on a consolidated basis.

(2) Fiscal Year-end of Consolidated Subsidiaries

Of the Company’s 32 consolidated subsidiaries, Keihin Asia

Bangkok Co., Ltd., Dongguan Keihin Engine Management System Co.,

Ltd., Keihin (Thailand) Co., Ltd., and 14 other subsidiaries have

December 31 as their fiscal year-end. In preparing the consolidated

financial statements, the Company uses the accounts prepared by

these subsidiaries as of December 31, and makes adjustments as

necessary for significant transactions that may occur between

December 31 and March 31, the date of the consolidated financial

statements.

(3) Valuation Methods for Significant Assets

(a) Securities

Available-for-sale securities with a determinable fair market value

are stated at fair market value as of the year-end. Unrealized gains and

losses on these securities are directly reported as a separate

component of net assets. The cost of securities sold is determined by

the moving average method. Available-for-sale securities without a

determinable fair market value are stated at cost based on the

moving-average method.

(b) Derivative Financial Instruments

Derivative financial instruments are valued at fair market value.

(c) Inventories

The Company and its domestic consolidated subsidiaries principally

apply the weighted-average cost method wherein the carrying amounts

of inventories are devalued to net realizable value based on lower

profitability. Foreign subsidiaries principally apply the lower of cost or

market method or the cost method, based on the first-in, first-out

method.


19

(4) Method of Depreciation for Significant Depreciable and

Amortizable Assets

(a) Property, Plant and Equipment and depreciation other than

leased assets

Property, plant and equipment are principally depreciated using the

declining-balance method.

However, the Company and its domestic consolidated subsidiaries

generally apply the straight-line method of depreciation for buildings

acquired on or after April 1, 1998, excluding building-related facilities,

and dies included in tools, furniture and fixtures. In addition, depreciable

assets with an acquisition price of more than ¥100,000 and less than

¥200,000 are depreciated by the straight-line method over three years.

The ranges of estimated useful lives are as follows:

Buildings and structures 2–50 years

Machinery, equipment and vehicles 2–12 years

(b) Intangible Assets

The amortization of intangible assets is computed using the

straight-line method. The Company and its domestic consolidated

subsidiaries, software for internal use is amortized over the estimated

useful life of five years.

(c) Leased assets

Leased assets under finance lease transactions other than those for

which ownership is transferred to the lessee:

The Company applies the straight-line method, using the term of the

lease as the useful life and a residual value of zero.

(5) Policy for Significant Provisions

(a) Accrued Product Warranties

Accrued product warranties are provided based on an estimate of

warranty expense to be incurred under the warranty agreements with

customers. Included in accrued product warranties are the following:

• an estimate of warranty expenses to be incurred during the remaining

warranty periods based on historical warranty claim experiences and an

estimate of the probability of future warranty expenses; and,

• an estimate of specifically identified warranty claims.

(b) Accrued Bonus for Directors and Statutory Auditors

The Company and its foreign consolidated subsidiaries accrue

directors’ bonus based on the estimated bonus payment amount.

(c) Provision for Loss on Disaster

The Company and its domestic consolidated subsidiaries provided

provision for loss on disaster based on an estimate of probable

payments, such as repair and restoration expenses associated with

assets damaged in the Great East Japan Earthquake.

(d) Accrued Retirement Benefits for Employees

The Company and certain of its consolidated subsidiaries provide for

employee retirement benefits principally at an amount calculated based

on the retirement benefit obligation and the fair value of the pension

plan assets as of the balance sheet date.

Actuarial gain or loss is amortized by the straight-line method mostly

over a period of 16 years, which is shorter than the average remaining

years of service of the employees. Amortization of actuarial gain or loss

begins in the year following the year in which actuarial gain or loss

occurs. Prior service cost is amortized by the straight-line method

principally over a period of 3 years, which is shorter than the average

remaining years of service of the employees.

(e) Accrued Retirement Benefits for Directors and Statutory

Auditors

The Company and its domestic consolidated subsidiaries also

accrues retirement benefits for directors and statutory auditors of the

Company and its domestic consolidated subsidiaries. The provision is

determined at an amount that would be payable in accordance with

internal company rules if all eligible directors and statutory auditors

were to resign at the fiscal year end.

(6) Policy for Translation of Assets and Liabilities Denominated in

Foreign Currencies into Japanese Yen

Foreign currency transactions are recorded using the foreign

exchange rates prevailing at the transaction dates. Receivables and

payables in foreign currencies are valued at year-end using the current

exchange rates.

The assets and liabilities of foreign consolidated subsidiaries are

translated at appropriate year-end rates, and income and expense

accounts are translated using average rates in the respective years.

The resulting translation adjustments are accumulated as a component

of accumulated other comprehensive income (loss).

(7) Significant Policy for Hedge Accounting

(a) Hedge Accounting Methods

The Company applies deferred hedge accounting.

However, furiate shori—a short-cut method—is applied to forward

exchange contracts that satisfy specific matching criteria, and tokurei

shori—special treatment—is applied to interest rate swaps that qualify

for such treatment.



(b) Hedging Instruments and Hedged Items

Hedging instruments Hedged itemsForward exchange

contractForeign-currency-denominated receivables and anticipated foreign-currency transactions

Interest rate swap Borrowings

(c) Hedging Policy

The Company and certain of its consolidated subsidiaries enter into

derivative transactions to hedge the risk of fluctuating exchange rates

and interest rates, within the limits set by internal risk management

rules for derivative transactions.

However, in hedging the risk of fluctuating exchange rates, the

Company and certain of its consolidated subsidiaries adhere to the

policy that targets more than two-thirds of the

foreign-currency-denominated receivables in primary trading currencies,

based on Risk Management Rules for Exchange Rates and Guidelines

for Implementing Risk Management Rules for Exchange Rates.

(d) Method for Evaluating the Effectiveness of Hedging

Significant factors pertaining to hedging methods and hedged items

are the same for forward exchange contracts as well as interest rate

swaps, and because these factors remained constant from the time

transactions commenced and thereafter, market fluctuations were

neutralized. Therefore, an evaluation of hedge effectiveness has been

omitted.

(8) Other Material Matters relating to the Presentation of

Consolidated Financial Statements

Accounting for Consumption Tax and Local Consumption Taxes

Transactions subject to consumption tax are recorded at amounts

exclusive of consumption tax.

(9) Scope of Cash Presented in the Consolidated Statements of

Cash Flows

The Company considers all cash on hand or on call and all highly

liquid investments with insignificant risk of changes in value, with

maturities of three months or less when purchased, to be cash

equivalents for the purposes of consolidated statements of cash flows.

(10) Reclassification

(a) Consolidated Statements of Cash Flows

For the fiscal year ended March 31, 2011, Other, net, under Cash

flows from operating activities, included Gain on sale of property, plant

and equipment (negative figure meaning gain) which was presented

separately for the fiscal year ended March 31, 2012, because the

amount became significant from this fiscal year. To reflect the change,

the financial statements for the fiscal year ended March 31, 2011, was

reclassified.

As a result, Gain on sale of property, plant and equipment (negative

figure meaning gain) of (¥60) million and Other, net of (¥489) million for

the fiscal year ended March 31, 2011 which were previously included in

Other, net of (¥549) million were presented separately in the

consolidated statements of cash flows.

(11) Additional Information

After the start of the fiscal year in review, the Company made

changes to its accounting policies and corrected errors contained in

past reports. Effective April 1, 2011, the Company has applied

“Accounting Standard for Accounting Changes and Error Corrections”

(ASBJ Statement No. 24, issued December 4, 2009) and the “Guidance

on Accounting Standard for Accounting Changes and Error

Corrections” (ASBJ Guidance No. 24, issued December 4, 2009) for

accounting changes and corrections of prior period errors.


21

3. U.S. Dollar AmountsThe consolidated financial statements are stated in Japanese yen,

the currency of the country in which the Company is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥82.19 to US$1, the approximate rate of exchange at March 31, 2012. Such translations should not be construed as representation that the Japanese yen amounts could be converted into U.S. dollars at that or any other amount.

4. Contingent Liabilities(1) The Company guarantees bank loans held by employees who

belong to the Honda Housing Mutual Aid Society to honor the right to demand compensation, based on guarantee and indemnification agreements entered into by Honda Motor Co., Ltd. Guarantee obligations as of March 31, 2011 and 2012 are as follows:

Millions of yenThousands of U.S. dollars

2011 2012 2012Borrowers

Employees ¥ 266 ¥ 264 $ 3,209

(2) The Company guarantees bank loans held by employees of the Company or its consolidated subsidiaries under the earthquake housing loan program.

Guarantee obligations as of March 31, 2012 are as follows:

Millions of yen

Thousands of U.S. dollars

2012 2012Borrowers

Employees ¥ 4 $ 47

5. Research and Development ExpensesResearch and development expenses included in selling, general and administrative expenses for fiscal 2011 and 2012 were as follows:


2011 2012 2012Research and developmentExpenses ¥ 520 ¥ 833 $ 10,131

6. Selling, General and Administrative ExpensesKey components of selling, general and administrative expenses and

respective amounts for fiscal 2011 and 2012 are as follows:


2011 2012 2012Freight and packing expenses ¥ 2,734 ¥ 2,718 $ 33,075

Transfer to provision for product warranties 37 10 118

Salaries 4,649 4,620 56,215Retirement benefit expenses 147 172 2,098

Provision for retirement benefits for directors and statutory auditors

103 94 1,139

Provision for bonuses for directors and statutory auditors

93 63 772

7. Loss on Disposal of Property, Plant and EquipmentA breakdown of loss on disposal of property, plant and equipment for

fiscal 2011 and 2012 is as follows:


2011 2012 2012Buildings and structures ¥ 44 ¥ 12 $ 142Machinery, equipment and vehicles 81 105 1,287

Tools, furniture andFixtures 65 16 190

Total ¥ 191 ¥ 133 $ 1,619

8. Impairment Loss on Property, Plant and EquipmentA breakdown of impairment losses recognized by the Company and its consolidated subsidiaries, in fiscal 2011 and 2012, is as follows:

Year ended March 31, 2011 Millions of yenDescription Category Location Impairment lossIdle facilities Machinery and equipment Kanagawa, Japan ¥ 126 Idle facilities Tools, furniture and fixtures Lamphun, Thailand 7

Year ended March 31, 2012 Millions of yenDescription Category Location Impairment lossIdle facilities Buildings Kanagawa, Japan ¥ 172 Idle tools Tools, furniture and fixtures Lamphun, Thailand 52

Year ended March 31, 2012Thousands of U.S. dollars

Description Category Location Impairment lossIdle facilities Buildings Kanagawa, Japan $ 2,090 Idle tools Tools, furniture and fixtures Lamphun, Thailand 631

The Company and its consolidated subsidiaries assessed the impairment of each group of assets determined on the basis of managerial accounting. The Company and its consolidated subsidiaries evaluated the idle assets on an individual asset basis.

As the future use of idle assets has not yet been determined, the carrying value of such assets was reduced to recoverable value and the difference between carrying amounts and recoverable value of ¥224 million ($2,721 thousand) was recorded as an impairment loss under extraordinary lossesfor fiscal 2012.

Recoverable value is based on net selling price. In the case of idle property, this corresponds to the property appraisal value, and in the case of idle facilities, it corresponds to the nominal value.



9. Loss on Disaster and Provision for Loss on DisasterA breakdown of loss on disaster and provision for loss on disaster

related to Great East Japan Earthquake amounting to ¥2,820 in fiscal

2011 is provided below:

Millions of yen2011

Costs associated with damaged facility ¥ 1,395Labor costs 1,007Costs incurred to dispose of damaged inventories and property, plant and equipment 319

Other expenses 99

Note: The amount recorded to under provision for loss on disaster is an

estimated amount.

Loss on disaster of ¥2,340 mainly consists of losses related to flood

in Thailand amounting to ¥2,289 in fiscal 2012 and the breakdown of

the losses in provided below:


2012 2012Costs incurred to dispose of damaged inventories andproperty, plant and equipment

¥ 1,627 $ 19,799

Abnormal operating costs 423 5,141Restoration costs 239 2,912

10. Extraordinary loss - OtherThe amount in Other of extraordinary losses is a lump sum

payment made by a foreign consolidated subsidiary based on anagreement with its local partner made on March 7, 2012.

11. Comprehensive IncomeThe following table presents reclassifications adjustments and tax

effects allocated to each component of other comprehensive income for the fiscal year ended March 31, 2012 :

Millions of

yenThousands of U.S. dollars

2012 2012Unrealized gains (losses) on available-for-sale securities, net：

Changes ¥ 45 $ 550Reclassification adjustment (1) (10)

Before tax effect ¥ 44 $ 540 Tax effect 184 2,235 Unrealized gains (losses) on

available-for-sale securities, net：¥ 228 $ 2,775

Unrealized losses from hedging instruments, net：

Changes ¥ 9 $ 106Reclassification adjustment ― ―

Before tax effect ¥ 9 $ 106 Tax effect (4) (43)

Unrealized losses from hedging instruments, net：

¥ 5 $ 63

Foreign currency translation adjustments, net：

Changes ¥ (4,130) $ (50,249)Reclassification adjustment ― ―

Before tax effect ¥ (4,130) $ (50,249) Tax effect 1 12

Foreign currency translation adjustments, net：

¥ (4,129) $ (50,237)

Other comprehensive loss ¥ (3,896) $ (47,399)

12. Cash and Cash Equivalents (1) A reconciliation of cash and deposits in the consolidated balance

sheets and cash and cash equivalents in the consolidated statements of cash flows is as follows:


2011 2012 2012Cash and deposits ¥ 32,212 ¥ 23,817 $ 289,782Short-term investments included in securities account

14,500 5,600 68,135

Time deposits with duration exceeding three months (4,074) (3,552) (43,218)

Cash and cash equivalents ¥ 42,638 ¥ 25,865 $ 314,699

(2) Details of assets and liabilities of the newly acquired consolidated subsidiary

Details of assets and liabilities of Thermal Technology Corporation, a newly consolidated subsidiary acquired through share purchase at December 31, 2011 and the related net payments to acquire the shares are as follows:

Millions of


2012 2012Current assets ¥ 9,486 $ 115,416Non-current assets 6,400 77,868Gain on negative goodwill (197) (2,391)Current liabilities (3,999) (48,658)Long-term liabilities (805) (9,791)Minority interest (4,736) (57,633)Share acquisition cost ¥ 6,149 $ 74,811Cash and cash equivalents (2,999) (36,489)Accounts payable and others (1,137) (13,831)Net: Acquisition cost of Keihin Thermal Technology Corporation ¥ 2,013 $ 24,491

13. Financial Instruments(1) Overview of financial instruments(a) Policy on the handling of financial instruments

In principle, the Company and certain consolidated subsidiaries obtain funds from financial institutions for the capital needed to execute operations, namely the production and sale of automotive parts. Any temporary surplus is invested in highly secured short-term financial assets.

The Group adheres to a policy wherein derivatives are used to avert the risks outlined below and not for speculative purposes. (b) Financial instruments and inherent risks

Notes and accounts receivable (operating credits) are exposed to customer credit risk. Receivables denominated in foreign currencies, which arise in the process of business activities undertaken overseas, are further exposed to risk arising from adverse fluctuations in exchange rates.

Marketable and investment securities (mainly certificates of deposit and equity in companies with which the Company has a business relationship) are exposed to risk arising from adverse fluctuations in market values.

Notes and accounts payable (operating debits) are nearly all due within one year. Some are denominated in foreign currencies and are therefore exposed to risk arising from adverse fluctuations in exchange rates.


23

Bank borrowings comprise short-term loans, which are used primarily to facilitate business transactions, and long-term debt, which is used primarily to finance capital investment activities. Some of these borrowings have been set up with a variable interest rate, so remaining balances are exposed to risk arising from adverse fluctuations in interest rates.

The Company’s derivative transactions are foreign currency forward exchange contracts used to reduce risk exposure arising from adverse fluctuations in exchange rates applied to foreign-currency-denominated receivables, and interest rate swaps used to reduce risk exposure arising from adverse fluctuations in interest payable on outstanding loans. Matters related to hedge accounting, specifically method and target as well as policy and technique for evaluating the effectiveness of hedging, are described in the section Significant Hedge Accounting Methods under Accounting Policies and Methods above.(c) Risk management structure for financial instruments i. Credit risk (risk associated with the inability of customers and counterparties to fulfill contractual obligations)

Administrative divisions at the Company and certain of its consolidated subsidiaries monitor due date and remaining balance of receivable by customer. In addition, efforts are made to identify the credit status of major clients, in line with Rules for Credit Risk Management of the Company.

In undertaking derivative transactions, the Company and certain of its consolidated subsidiaries only enter into transactions with financial institutions having high credit ratings, thereby significantly mitigating potential losses arising from credit risk through non-performance by counterparties. ii. Market risk (mainly risk of fluctuating exchange rates and interest rates)

In principle, the Company and certain of its consolidated subsidiaries use foreign currency forward exchange contracts to lessen the effect of fluctuating exchange rates on foreign-currency-denominated receivables and anticipated foreign-currency-denominated transactions. Rates are tracked monthly by currency, with an emphasis on the U.S. dollar.

To avert the risk of fluctuating interest payable on the outstanding balances of some loans and to fix interest expense, the Company and certain consolidated subsidiaries apply interest rate swaps to each contract.

For marketable and investment securities, the Company and certainof its consolidated subsidiaries determine respective fair value and monitor the financial status of the issuing party (the customer company)on a regular basis. Any changes, particularly in equity holding or fair value, are reported to the director responsible for risk management.

In the execution and monitoring of derivative transactions, the Company and certain of its consolidated subsidiaries are guided by internal rules that specify conditions, of derivative transaction, such as the authorizing position. The director responsible for risk management is updated on derivative developments as necessary. iii. Liquidity risk associated with funding (risk that principal and/or interest payments cannot be paid by due date)

At the Company and each of its consolidated subsidiaries, the respective finance division prepares a cash flow plan and keeps it current. Efforts are also made to maintain liquidity in hand, which helps to keep liquidity risk in check.

(d) Supplementary explanation to fair value of financial instruments

Carrying amounts and fair value for derivative transactions are listed in (2) Fair value of financial instruments. But these amounts are not indicative of the market risk associated with such derivative transactions.

(2) Fair value of financial instrumentsCarrying amounts of financial instruments, their fair value and

respective differences as of March 31, 2011 and 2012, are presented below. Any financial instruments for which management deems a fair value is too difficult to pinpoint will not be included in the table below.Please see Note 2 for details.

Millions of yen

As of March 31, 2011 Carrying amount Fair value Difference

(1) Cash and deposits ¥ 32,212 ¥ 32,212 ¥ ―

(2) Notes and accounts receivable

34,707 34,707 ―

(3) Marketable and investment securities

19,129 19,129 ―

Total assets ¥ 86,048 ¥ 86,048 ¥ ―

(4) Notes and accounts payable ¥ 27,694 ¥ 27,694 ¥ ―

Total liabilities ¥ 27,694 ¥ 27,694 ¥ ―

(5) Derivative transactions (*1)For hedge accounting

Not AppliedApplied

¥ (21)(9)

¥ (21)(15)

¥ ―

(6)Total derivative transactions ¥ (30) ¥ (36) ¥ (6)

Millions of yen


(1) Cash and deposits ¥ 23,817 ¥ 23,817 ¥ ―

(2) Notes and accounts receivable

43,539 43,539 ―


10,269 10,269 ―

Total assets ¥ 77,624 ¥ 77,624 ¥ ―

(4) Notes and accounts payable ¥ 33,725 ¥ 33,725 ¥ ―

Total liabilities ¥ 33,725 ¥ 33,725 ¥ ―


Not applied ¥ (134) ¥ (134) ¥ ―

Total derivative transactions ¥ (134) ¥ (134) ¥ ―



(1) Cash and deposits $ 289,782 $ 289,782 $ ―(2) Notes and accounts

receivable529,729 529,729 ―


124,936 124,936 ―

Total assets $ 944,447 $ 944,447 $ ―

(4) Notes and accounts payable $ 410,329 $ 410,329 $ ―

Total liabilities $ 410,329 $ 410,329 $ ―


Not applied $ (1,625) $ (1,625) $ ―

Total derivative transactions $ (1,625) $ (1,625) $ ―

*1: Net credit/obligation arising from derivative transactions are shown as a net amount. If the total is a net obligation, the number appears in parentheses.



Notes:1. Calculation method for fair value of financial instruments and

matters related to securities and derivative transactions.(1) Cash and deposits and (2) Notes and accounts receivable

These amounts are settled within a short period, so fair value approximates carrying amount. Therefore, the respective book valuesare used. (3) Marketable and investment securities

If the securities are negotiable certificates of deposit, they are settled within a short period, and fair value approximates carrying amount, so respective book values are used. If investment securities are stocks, their value is based on stock market prices.

The Company holds marketable and investment securities as available-for-sale securities, and differences between carrying amount and acquisition cost are described in note 14, “Investment Securities” to consolidated financial statements.(4) Notes and accounts payable

These debits are settled within a short period, so fair value approximates book value. Therefore, the respective book values are used. (5) Derivative transactions See note 16, “Derivative Financial Instruments” to consolidated

financial statements for detail.

2. Unconsolidated subsidiary stock (carrying amount, ¥1,325 million($16,123 thousand)) and unlisted stock (carrying amount, ¥27 million($324 thousand), as of March 31, 2012) have no market price, and because it is too difficult to determine fair value for such type of stocks, they are not subject for inclusion in the calculated fair value of (3) marketable and investment securities.

3. Projected redemption amounts for financial claims and securities with maturities after March 31, 2012

Millions of yen

Within 1 year 1 to 2 years

Cash and deposits ¥ 7,457 ¥ 9Notes and accounts receivable 43,539 ―

Marketable and investment securities

Securities with maturities in the other securities account

5,600 ―

Total ¥ 56,596 ¥ 9


Within 1 year 1 to 2 years

Cash and deposits $ 90,731 $ 111Notes and accounts receivable 529,729 ―

Marketable and investment securitiesSecurities with maturities in the other securities account

68,135 ―

Total $ 688,595 $ 111

14. Investment SecuritiesInformation regarding held-to-maturity debt securities and

available-for-sale securities for fiscal 2011 and 2012 is as follows:(1) Available-for-Sale Securities with Fair Market Value

Millions of yenAs of March 31, 2011 Carrying

amountAcquisition

cost DifferenceSecurities with carrying amount exceedingacquisition cost

Equity securities ¥ 4,429 ¥ 509 ¥ 3,920Subtotal ¥ 4,429 509 3,920

Securities with carrying amount less thanacquisition cost

Equity securities 200 265 (65)Other 14,500 14,500 －

Subtotal 14,700 14,765 (65)Total ¥ 19,129 ¥ 15,274 ¥ 3,855

Millions of yen

As of March 31, 2012 Carryingamount

Acquisition cost Difference

Securities with carrying amount exceedingacquisition cost

Equity securities ¥ 4,454 ¥ 507 ¥ 3,947Subtotal ¥ 4,454 507 3,947


Equity securities 215 265 (50)Other 5,600 5,600 ―

Subtotal 5,815 5,865 (50)Total ¥ 10,269 ¥ 6,372 ¥ 3,897

Thousands of U.S. dollarsAs of March 31, 2012 Carrying

amountAcquisition

cost DifferenceSecurities with carrying amount exceedingacquisition cost

Equity securities $ 54,189 $ 6,167 $ 48,022Subtotal $ 54,189 6,167 48,022


Equity securities 2,612 3,220 (608)Other 68,135 68,135 ―

Subtotal 70,747 71,355 (608)Total $ 124,936 $ 77,522 $ 47,414

(2) Other Major Securities without Fair Market Value

Millions of yen


2011 2012 2012Certificates of deposit ¥ 14,500 ¥ 5,600 $ 68,135Unlisted stock 27 27 324Total ¥ 14,527 ¥ 5,627 $ 68,459

(3) Sales of Available-for-Sale Securities with Fair Market ValueMillions of yen

Year ended March 31, 2011

Cost of securities

soldSales

amountProfit and loss on sales

Other ¥ 285 ¥ ― ¥ ―Total ¥ 285 ¥ ― ¥ ―


25

15. Borrowings and DebtA breakdown of short-term loans payable and long-term debt as of March 31, 2011 and 2012 is as follows:


2011 2012 2012Balance Balance Average interest rate Due Balance

Short-term loans payable ¥ 1,525 ¥ 2,134 3.37% $ 25,966Current portion of long-term debt 1,283 601 1.30% 7,315Current portion of lease obligations ― 25 3.77% 308Long-term debt (excluding current portion of lease obligations) 600 ― ― ―

Lease obligations (excluding current portion of lease obligations)

― 211 3.77% July 2021 2,567

Subtotal 3,408 2,971 ― 36,156Elimination of intercompanytransactions (23) (1,088) ― (13,242)

Total ¥ 3,385 ¥ 1,883 ― $ 22,914Note:1. Average interest rate represents the weighted average interest rate on the year-end balance of borrowings. 2. Borrowing and debt with interest rate swaps adopt fixed interest rate after interest rate swaps.3. The aggregate amount of lease obligations, excluding current portion of lease obligations as of March 31, 2012, to be repaid each year over the

next five years is broken down as follows:

MaturitiesMillions of


1 to 2 years ¥ 25 $ 3082 to 3 years 25 3083 to 4 years 25 3084 to 5 years 25 308

16. Derivative Financial Instruments(1) Derivative transactions not subject to hedge accounting

For derivative transactions for which hedge accounting is not applied, the contract amount as of the fiscal year-end, or the principal equivalent set forth in the contract, for each type of transaction, as well as fair value and unrealized gain (loss) along with the calculation method using said fair value are presented below.

Millions of yen2011

Type Contract amount

Portion due after one year Fair value Unrealized

(gain) lossForward exchange contracts

SellU.S. dollars ¥ 1,152 ― ¥ (19) ¥ (19) U.K. pounds 88 ― (2) (2)

Total ¥ 1,240 ― ¥ (21) ¥ (21)

Millions of yen Thousands of U.S. dollars2012 2012

Type Contract amount


(gain) lossContract amount


(gain) lossForward exchange contracts

SellU.S. dollars ¥ 4,186 ― ¥ (123) ¥ (123) $ 50,927 ― $ (1,494) $ (1,494)U.K. pounds 158 ― (11) (11) 1,922 ― (131) (131)

Total ¥ 4,344 ― ¥ (134) ¥ (134) $ 52,849 ― $ (1,625) $ (1,625)

Notes: 1．Fair value of forward exchange contracts is based on forward exchange rates.2．The transactions above are forward exchange contracts entered into for the purpose of hedging foreign currency-denominated receivables against

consolidated subsidiaries that have been eliminated from the consolidated balance sheets.



(2) Derivative transactions subject to hedge accountingFor derivative transactions for which hedge accounting has been applied, the contract amount as of the fiscal year-end, or the principal equivalent

set forth in the contract, for each type of transaction is presented below.

(a) Currency related transactionMillions of yen

2011

Hedge accounting method

Type Hedged itemContract amount

Fair valueTotal

Portion due after one year

Deferred hedge accounting

Forward exchange contracts

SellU.S. dollars

Trade accounts receivable ¥ 483 ¥ ― ¥ (9)

Note: Market values are based on prices provided by corresponding financial institutions.

(b) Interest rates related transactionMillions of yen

2011



Fair valueTotal

Portion due after one year

Special exemption for interest rate swaps

Interest rate swapsPay fixed/ Receive floating

Current portion of Long-term debt ¥ 1,200 ¥ 400 ¥ (7)

Millions of yen Thousands of U.S. dollars2012 2012



Fair value

Contract amountFair

valueTotalPortion due

after one year TotalPortion due

After one year

Special exemption for interest rate swaps

Interest rate swapsPay fixed/ Receive floating

Current portion of Long-term debt ¥ 400 ¥ ― ¥ (1) $ 4,867 $ ― $ (15)

Note: Market values are based on prices provided by corresponding financial institutions.

17. Retirement Benefit Plans(1) The Company maintains the following defined benefit pension plans:a welfare pension fund plan and a lump-sum payment plan.

Some of the Company’s consolidated subsidiaries have defined contribution pension plans in addition to defined benefit pension plans.

The table below shows contributions and current status of defined benefit pension plans at the Company and consolidated subsidiaries with such plans as reflected in the consolidated balance sheets as of March 31, 2011 and 2012:


2011 2012 2012Retirement benefit obligation ¥ (36,575) ¥ (38,320) $ (466,240)Plan assets 27,747 29,773 362,243

Subtotal (8,828) (8,547) (103,997)Unrecognized actuarial gain 8,231 8,548 103,998Unrecognized prior service cost (credit) (516) (15) (181)

Prepaid pension expenses (688) (1,465) (17,840)Accrued retirementbenefits ¥ (1,800) ¥ (1,481) $ (18,020)

Note: Some consolidated subsidiaries adopt the simplified method to calculate retirement benefit obligations.

(2) Net periodic retirement benefit costs for fiscal 2011 and 2012 are summarized as follows:


2011 2012 2012Service cost ¥ 1,717 ¥ 1,624 $ 19,760Interest cost 597 595 7,236Expected return on plan assets (697) (693) (8,438)

Amortization of actuarial gain 866 958 11,657Amortization of prior service cost (772) (515) (6,262)

Net periodic retirement benefit costs ¥ 1,711 ¥ 1,969 $ 23,953

Notes:1. Retirement benefit costs for the consolidated subsidiaries adopting

the simplified method are included in service cost.2. The matching contributions to defined benefit plans made by some

foreign consolidated subsidiaries (¥141 million and ¥144 million ($1,758 thousand) in fiscal 2011 and 2012, respectively) are not included in retirement benefit costs.


27

(3) Assumptions used as of March 31, 2011 and 2012 are set forth as follows:As of March 31 2011 2012Periodic allocation method for projected benefits

Straight-line method

Straight-line method

Discount rate Mainly 2.0% Mainly 2.0%Expected return on assets Mainly 3.0% Mainly 3.0%Years to amortize unrecognized prior service cost Mainly 3 Mainly 3Years to amortize unrecognizedactuarial gain Mainly 17 Mainly 16

18. Income Taxes(1) A breakdown of deferred tax assets and deferred tax liabilities as of March 31, 2011 and 2012 is as follows:


2011 2012 2012Current:Deferred tax assets

Loss on devaluation of inventories ¥ 449 ¥ 368 $ 4,472

Accrued bonuses 1,306 1,105 13,447Accrued expenses 270 165 2,006Accrued product warranties 191 129 1,569Net loss carried forward － 853 10,374Provision for loss on disaster 547 18 217Loss on liquidation of subsidiary 251 252 3,065Other 591 656 7,996Subtotal of deferred tax assets 3,605 3,546 43,146Total deferred tax assets Offset against deferred tax liabilities

3,605(202)

3,546(167)

43,146(2,038)

Net current deferred tax assets ¥ 3,403 ¥ 3,379 $ 41,108Deferred tax liabilities

Retained earnings of foreignconsolidated subsidiaries ¥ (189) ¥ (94) $ (1,139)

Other (48) (97) (1,190)Total deferred tax liabilities (237) (191) (2,329)Offset against deferred tax assets 202 167 2,038Net current deferred tax liabilities ¥ (35) ¥ (24) $ (291)

Non-current:Deferred tax assets

Accrued retirement benefits for employees ¥ 435 ¥ 270 $ 3,289

Accrued retirement benefits for directors and statutory auditors 170 158 1,920

Unrealized gain on property, plant and equipment 1,395 808 9,835

Excess depreciation 197 289 3,512Net loss carried forward 1,633 2,935 35,711Other 243 332 4,042Subtotal of deferred tax assets 4,073 4,792 58,309Less: valuation allowance (156) (870) (10,591)Total deferred tax assets 3,917 3,922 47,718Offset against deferred tax liabilities (1,827) (2,117) (25,761)

Net non-current deferred tax assets ¥ 2,090 ¥ 1,805 $ 21,957

Deferred tax liabilitiesDepreciation costs of foreignconsolidated subsidiaries ¥ (878) ¥ (1,169) $ (14,225)

Unrealized valuation gain on available-for-sale securities, net (1,565) (1,381) (16,802)

Consolidation adjustment to book value of subsidiaries’ assets ― (795) (9,668)

Other (197) (462) (5,622)Total deferred tax liabilities (2,640) (3,807) (46,317)Offset against deferred tax assets 1,827 2,117 25,761Net non-current deferred tax liabilities ¥ (813) ¥ (1,690) $ (20,556)

(2) Reconciliation of the statutory income tax rate to the effective income tax rates for fiscal 2011 and 2012 is as follows:

2011 2012Statutory tax rate 40.0% 40.0%

Per capital levy of inhabitants’ tax 0.1 0.2Differences in foreign subsidiaries’ tax rates (10.1) (14.5)Tax-exempt portion of foreign consolidated subsidiaries (4.5) (3.7)

Undistributed retained earnings of foreignconsolidated subsidiaries 0.1 (0.9)

Nondeductible foreign tax credit 3.6 9.3Unrecognized tax benefits on unrealized gains 13.5 6.5Valuation allowance (17.3) 8.3Adjustment of deferred tax assets due to changes in statutory tax rates ― 3.2

Other (2.5) 2.7Effective income tax rates 22.9% 51.1%

(3) Adjustment of deferred tax assets and liabilities due to changes inthe corporate income tax rate

Following the promulgation of the Act for Partial Amendment of the Income Tax Act, etc., for the Purpose of Creating a Taxation System Responding to Changes in Economic and Social Structures (Act No. 114, 2011) and the Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction Following the Great East Japan Earthquake (Act No. 117, 2011) on December 2, 2011, the corporate income tax rate will be lowered and a special restoration surtax will be imposed from fiscal years beginning on or after April 1, 2012. In line with such changes, the effective statutory tax rate used to measure deferred tax assets and liabilities will be changed from 40.0% to 37.4% for temporary differences and loss carry-forwards expected to be eliminated in the fiscal years beginning on or after April 1, 2012. The rate will be changed to 35.0% for temporary differences and loss carry-forwards expected to be eliminated in the fiscal years beginning on or after April 1, 2015.

As a result of this change, deferred tax assets (excluding the amount of deferred tax liabilities) decreased by ¥133 million ($1,622 thousand), tax adjustments recognized during the fiscal year ended March 31, 2012 increased by ¥329 million ($3,995 thousand), and the valuation difference on available-for-sale securities increased by ¥195 million ($2,384 thousand).



19. Business Combinations(Business combinations under common control) (1) Summary of transaction(a) Name of company acquired and description of business

Keihin Fuel Systems, Inc.(Sales of motorcycles and power products parts)

(b) Date of business combination recognizedApril 1, 2011

(c) Legal form of business combinationAbsorption-type mergerKeihin Fuel Systems, Inc. (consolidated subsidiary of the

Company) was merged into Keihin North America, Inc. (consolidated subsidiary of the Company), a surviving company.

(d) Name of company after business combinationKeihin North America, Inc. (consolidated subsidiary of the Company)

(e) Other matters related to the transactionWith a view to establishing a unified and efficient operating structure, the Company newly set up the Americas Headquarter in April 2009 and concentrated its management and back-office functions in Keihin North America, Inc., a controlling company, and manufacturing in its production subsidiaries. By concentrating back office operations such as procurement and inventory management of Keihin Fuel Systems, Inc., as a part of the said initiative, the Company aims at making its management structure in North America even more efficient.

(2) Summary of accounting treatment The combination was treated as a business combination involving entities or operations of entities under common control based on the Accounting Standard for Business Combinations (ASBJ Statement No. 21, issued on December 26, 2008) and the Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, issued on December 26, 2008).

(Business combinations through acquisitions)(1) Summary of business combination(a) Name of company acquired and description of business

Thermal Technology Corporation (automotive air-conditioner heat exchanger business)

(b) Primary reason for business combinationTo hone cost competitiveness, reinforce product development capabilities, and sharpen the competitive edge in the air-conditioning systems business—a core business segment

(c) Date of business combination recognizedJanuary 1, 2012

(d) Legal form of the business combination Share purchase

(e) Name of company after combinationKeihin Thermal Technology Corporation

(f) Acquired voting rights 60%

(2) Detailed acquisition costs

Millions of yen Thousands of

US dollarsAcquisition cost of shares ¥ 5,798 $ 70,549Direct costs for acquisition 351 4,262Total Acquisition costs 6,149 74,811

(3) Amount of negative goodwill incurred and the reason for the recognition

(a) Gain on negative goodwillThe negative goodwill is recognized as extraordinary income when incurred.¥197 million ($2,391 thousand)

(b) ReasonThe interest in the net fair value of assets and liabilities of the acquired company at the time of the business combination exceeded its acquisition costs.

(4) Summary of assets acquired and liabilities assumed on the date of the business combination:

Millions of yen

Thousands ofUS dollars

Current assets ¥ 9,486 $ 115,416Fixed assets 6,400 77,868Total assets 15,886 193,284Current liabilities 3,999 48,658Fixed liabilities 805 9,791Total liabilities 4,804 58,449

(5) Allocation of acquisition costBecause allocation of the acquisition cost was not completed during

the fiscal year in review, the Company applied provisional accounting treatment based on reasonable information available to management at the time.

20. Segment Information(1) Overview of reporting segments

The Company defines its reporting segments as units of the Company for which independent financial information is accessible and which are subject to periodic review by the Board of Directors to determine the allocation of management resources and to evaluate performance.

The Company is primarily engaged in the manufacture and sale of automotive components and divides its activities into five region-specific reporting segments—Japan, the Americas, Asia, China and Europe—each with management systems and production and sales systems tailored to local characteristics.

Of the aforementioned regions, the Americas is under the control of the Americas Headquarter; Asia, excluding China is under the control of the Asia Headquarter; China is under the control of the China Headquarter, and Europe is under the control of the Europe Supervisory Office.

(2) Accounting treatment methods of sales, income (loss), assets, liabilities and other accounts by each segmentAccounting treatment methods for each segment are the same as those described in “Significant Basic Items for Preparation of Consolidated

Financial Statements.” Intersegment sales are based on arm’s length pricing.

(3) Amount of sales, income (loss), assets, liabilities and other accounts by each segmentSegment information for the Company and its consolidated subsidiaries for fiscal 2011 and 2012 are as follows:


29

Millions of yen

Year ended March 31, 2011Reporting Segments Eliminations

(Note) Total (Note) Japan Americas Asia China Europe Total

Sales:

Outside customers ¥ 93,144 ¥ 72,581 ¥ 75,238 ¥ 31,916 ¥ 5,612 ¥ 278,491 ¥ ― ¥ 278,491Intersegment 53,315 491 5,418 2,231 181 61,636 (61,636) ―

Total ¥ 146,459 ¥ 73,072 ¥ 80,656 ¥ 34,147 ¥ 5,793 ¥ 340,127 ¥ (61,636) ¥ 278,491Segment income (loss) ¥ 7,108 ¥ 3,356 ¥ 11,717 ¥ 3,940 ¥ 184 ¥ 26,305 ¥ (4,707) ¥ 21,598Segment assets ¥ 116,900 ¥ 41,567 ¥ 57,247 ¥ 24,013 ¥ 2,533 ¥ 242,260 ¥ (48,703) ¥ 193,557

Other items:Depreciation and amortization expenses ¥ 6,940 ¥ 3,463 ¥ 4,003 ¥ 1,649 ¥ 203 ¥ 16,258 ¥ (2,333) ¥ 13,925

Increase (decrease) in property, plant and equipment and intangible assets

¥ 5,803 ¥ 2,308 ¥ 3,669 ¥ 1,104 ¥ 175 ¥ 13,059 ¥ (541) ¥ 12,518

Millions of yen

Year ended March 31, 2012 Reporting Segments Eliminations


Sales:

Outside customers ¥ 92,378 ¥ 65,186 ¥ 65,788 ¥ 32,384 ¥ 4,258 ¥ 259,994 ¥ ― ¥ 259,994Intersegment 52,604 910 5,582 2,337 186 61,619 (61,619) ―

Total ¥ 144,982 ¥ 66,096 ¥ 71,370 ¥ 34,721 ¥ 4,444 ¥ 321,613 ¥ (61,619) ¥ 259,994Segment income ¥ (486) ¥ (920) ¥ 9,685 ¥ 2,819 ¥ 77 ¥ 11,175 ¥ (357) ¥ 10,818Segment assets ¥ 138,482 ¥ 42,700 ¥ 55,032 ¥ 25,570 ¥ 2,581 ¥ 264,365 ¥ (61,641) ¥ 202,724

Other items:Depreciation and amortization expenses ¥ 6,455 ¥ 3,404 ¥ 4,318 ¥ 1,762 ¥ 192 ¥ 16,131 ¥ (3,314) ¥ 12,817


¥ 6,048 ¥ 2,760 ¥ 3,802 ¥ 813 ¥ 25 ¥ 13,448 ¥ (435) ¥ 13,013


Year ended March 31, 2012 Reporting Segments Eliminations


Sales:

Outside customers $ 1,123,956 $ 793,113 $ 800,439 $ 394,015 $ 51,809 $ 3,163,332 $ ― $ 3,163,332Intersegment 640,030 11,077 67,909 28,434 2,267 749,717 (749,717) ―

Total $ 1,763,986 $ 804,190 $ 868,348 $ 422,449 $ 54,076 $ 3,913,049 $ (749,717) $ 3,163,332Segment income $ (5,913) $ (11,193) $ 117,834 $ 34,229 $ 941 $ 135,968 $ (4,338) $ 131,630Segment assets $ 1,684,903 $ 519,525 $ 669,567 $ 311,109 $ 31,406 $ 3,216,510 $ (749,975) $ 2,466,535

Other items:Depreciation and amortization expenses $ 78,533 $ 41,414 $ 52,539 $ 21,436 $ 2,341 $ 196,263 $ (40,318) $ 155,945


$ 73,588 $ 33,586 $ 46,263 $ 9,886 $ 303 $ 163,626 $ (5,293) $ 158,333

Notes:1. Sales in the “Eliminations” column are intersegment sales. Segment income in the “Eliminations” column is associated with inventories and

property, plant and equipment. 2. Segment assets in the “Eliminations” column is the result of ¥7,822 million ($95,165 thousand) in corporate assets, mainly long-term

investments (investment securities) and assets associated with administrative divisions of the parent company, as well as intersegment consolidation adjustments.

3. Depreciation and amortization expenses include long-term prepaid expenses and amortization expenses on deferred assets. Depreciation and amortization expenses in the “Eliminations” column is the result of intersegment consolidation adjustments.

4. Increase (decrease) in property, plant and equipment and intangible assets in the “Eliminations” column reflect intersegment consolidation adjustments.

5. Segment income is operating income as stated on the consolidated statements of income.6. Segment assets is the asset total on the consolidated balance sheets. 7. Five consolidated subsidiaries under the umbrella of Keihin Thermal Technology Corporation, which the Company acquired on January 1, 2012,

are included in the “Japan” segment since they are reviewed by management as automotive air-conditioner heat exchanger business in Japan segment.



(4) Related Information(a) Information by product and service

Millions of yen Thousands of U.S dollars

2012 2012

Motorcycles and

Power Products

Automobile

ProductsTotal

Motorcycles and

Power Products

Automobile

ProductsTotal

Sales to outside customers ¥ 88,754 ¥ 171,240 ¥ 259,994 $ 1,079,871 $ 2,083,461 $ 3,163,332

(b) Information by regioni. Sales

Millions of yen Thousands of U.S. dollars

2012 2012

Japan USA Thailand China Other Total Japan USA Thailand China Other Total

¥ 92,378 ¥ 58,045 ¥ 31,508 ¥ 32,384 ¥ 45,679 ¥ 259,994 $ 1,123,956 $ 706,226 $ 383,351 $ 394,015 $ 555,784 $ 3,163,332

Note: Sales are grouped by country or region, based on customer location.

ii. Property, plant and equipmentMillions of yen Thousands of U.S. dollars

2012 2012

Japan USA China Other Total Japan USA China Other Total

¥ 32,338 ¥ 13,575 ¥ 8,382 ¥ 13,898 ¥ 68,194 $ 393,461 $ 165,166 $ 101,986 $ 169,099 $ 829,712

(C) Information by major customerMillions of yen Thousands of U.S. dollars

2012 2012Customer Name Related Segment Sales Sales

Honda Motor Co., Ltd. Japan ¥ 75,221 $ 915,210Honda of America Manufacturing, Inc. Americas ¥ 28,956 $ 352,309

(5) Information concerning loss on impairment of property, plant and equipment by reporting segmentMillions of yen Thousands of U.S. dollars

2012 2012

Japan Americas Asia China Europe Total Japan Americas Asia China Europe Total

¥ 172 ¥ ― ¥ 52 ¥ ― ¥ ― ¥ 224 $ 2,090 $ ― $ 631 $ ― $ ― $ 2,721

(6) Information concerning gain on negative goodwill by reporting segmentIn the previous fiscal year, gain on negative goodwill from the capital increase in Keihin Auto Parts (Thailand) Co., Ltd., a consolidated subsidiary

of the Company was recorded in the Asia segment. The gain on negative goodwill from this transaction under review was ¥1,192 million, but the amount is not included in segment income by reporting segment.

In the current fiscal year, gain on negative goodwill from the acquisition of 60% equity in Thermal Technology Corporation on January 1, 2012 was recorded in the Japan segment. The gain on negative goodwill on this event under review was ¥197 million ($2,391 thousand), but the amount is not included in segment income by reporting segment.


31

21. Related Party Transactions A detailed breakdown of related party transactions for fiscal 2011 and 2012 is as follows:

(1) Parent company or main shareholderMillions of yen

2011

Type Sales Trade accounts receivable Purchase of raw materialsand components Trade accounts payable

Affiliates:Honda Motor Co., Ltd. ¥ 77,245 ¥ 6,680 ¥ 17,277 ¥ 1,224

Millions of yen2012


Affiliates:Honda Motor Co., Ltd. ¥ 75,221 ¥ 13,546 ¥ 18,347 ¥ 2,320

Thousands of U.S. dollars2012


Affiliates:Honda Motor Co., Ltd. $ 915,210 $ 164,814 $ 223,232 $ 28,227

(2) Company that has same parent company as the Company or related partyMillions of yen

2011


Subsidiaries of affiliates:Honda of America Manufacturing, Inc. ¥ 31,689 ¥ 2,982 ¥ 7,027 ¥ 577

Millions of yen2012


Subsidiaries of affiliates:Honda of America Manufacturing, Inc. ¥ 28,956 ¥ 3,907 ¥ 5,954 ¥ 821

Thousands of U.S. dollars2012


Subsidiaries of affiliates:Honda of America Manufacturing, Inc. $ 352,309 $ 47,540 $ 72,438 $ 9,988Notes:1. In the tables above, consumption tax is included in trade accounts receivable and trade accounts payable but not in sales or purchases of raw

materials and components.2. Transaction conditions and policy on determining transaction conditions

(a) The sale of merchandise is determined based on price negotiations considering market price or total cost. (b) Purchase of raw materials and components is based on market prices.



22. Subsequent Events(Damage caused by flooding in Thailand)

Heavy rains led to extensive flooding in Thailand that inundated the facilities of two consolidated subsidiaries in the Rojana Industrial Park in Ayutthaya. Damage was sustained at Keihin Auto Parts (Thailand) Co., Ltd., whose year end is December 31, and at Keihin Thermal Technology (Thailand) Co., Ltd., whose year end is also December 31 and a subsidiary of Keihin Thermal Technology Corporation, which the Company acquired on January 1, 2012.

(1) LossesEstimated losses in the fiscal year ending March 31, 2013 are likely to reach ¥1,345 million ($16,365 thousand). A breakdown of this amount

included extraordinary losses of about ¥503 million ($6,120 thousand) and restoration costs of about ¥842 million ($10,245 thousand). An investigation is continuing.

(2) Insurance proceedsDamage to property was covered by insurance, and Keihin Auto Parts (Thailand) Co., Ltd., already received a portion—¥752 million ($9,150

thousand) —of its insurance claim as of December 31,2011, and expects to receive an additional amount of approximately ¥1,871 million($22,764 thousand). In addition, Keihin Thermal Technology (Thailand) Co., Ltd., expects to receive approximately ¥1,075 million ($13,079 thousand).

(3) RestorationKeihin Auto Parts (Thailand) Co., Ltd., resumed production of air-conditioning systems and mechanical products for automobiles in January

2012 and added electronic control products to its manufacturing activities in March 2012. Keihin Thermal Technology (Thailand) Co., Ltd., resumed production in March 2012. Therefore, restoration work to repair and replace damaged structures and equipment at Keihin Auto Parts (Thailand) and Keihin Thermal Technology (Thailand) is deemed complete as of March 31, 2012.




30,581 41.33 2,948 3.99 2,320 3.14 2,210 2.99 1,938 2.62 1,889 2.55 1,553 2.10 899 1.22 889 1.20 881 1.19

Honda Motor Co., Ltd.

Japan Trustee Services Bank, Ltd. (Trust Account)

The Master Trust Bank of Japan, Ltd. (Trust Account)

National Mutual Insurance Federation of Agricultural Cooperatives

Bank of Tokyo-Mistubishi UFJ, Ltd.

Japan Trustee Services Bank, Ltd. (Trust Account 9)

The Bank of New York, Treaty Jasdec Account

Keihin Corporation Client Stock Ownership Association

JP Morgan Chase Bank 385078

State Street Bank and Trust Client Omnibus Account OM02

Share Price (Yen)

2008 2009 2010 2011

2,7752,210

1,8801,437

1,3691,009

2,4801,912

1,8321,179

1,6311,158

2,3901,843

1,250 613

1,4801,179

1,9061,171

1,125 653

1,8651,340

2012

1,9371,523

1,7661,482

1,9721,549

1,9821,150

1,7081,406

1,7931,236

1,4061,068

1,6971,230

Keihin Corporation

Corporate Data

　Established December 19, 1956

　Capital ¥6,932,340,000

　Fiscal Year-End March 31

　Number of Employees 19,843 (Consolidated) 4,286 (Non-Consolidated)

　Independent Auditors Ernst & Young ShinNihon LLC

　Head Office Shinjuku Nomura Bldg. 39F, 1-26-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-0539, Japan

　Home Page http://www.keihin-corp.co.jp/english

Stock Information

　Number of Shares Authorized 240,000,000 Shares

　Total Number of Shares Issued 73,985,246 Shares

　Number of Shareholders 6,058

　Stock Listing Tokyo Stock Exchange

　General Meeting of Shareholders June

　Share Registrar The Mitsubishi Trust and Banking Corporation 1-4-5, Marunouchi, Chiyoda-ku, Tokyo 100-8212, Japan

Principal Shareholders

Number ofshares held(Thousands)

Percentage oftotal shares outstanding

(%)

First Quarter

Second Quarter

Third Quarter

Fourth QuarterHighLow

HighLow

HighLow

HighLow

Corporate Data （As of March 31, 2012）

私たちのつくる一つひとつの部品は、

車やバイクを構成する小さな部品に過ぎませんが、

その進化は、業界をそして世界をも変えてしまう力を持っています。

私たちは、世界の未来をより良くできるという確信のもとに、

常に新しい価値を創造するための挑戦を続けていきます。

…すべての製品に込めた私たちの想い…

Although the parts we produce for cars and motorcycles are very small,

we believe that their continuous evolution has the potential to change not only the industry,

but also the world itself.

We are confident of contributing to a better future through our constant

challenge to create new value.

Our Conviction Built into Each Product

Documents

CONTENTS - 株式会社ケーヒン · Keihin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. Dalian Motorcycles and Power Products Mechanical Products for Automobiles Research