The Akebono Group’s earnings are expected to expand due to the conditions describedabove. At the same time, while delays in the recovery of automobile sales and production inEurope are anticipated, strategic moves will be taken to grow our business and to establisha stable business foundation.Although we anticipate some expenses to arise in connection with the launch of the newordering model scheduled for 2014, we will continue to implement measures outlined in ournew midterm business plan, which targets net sales and operating income of ?250.0 and?20.0 billion, respectively, in fiscal 2015.(Important Measures)? Facilitating development, manufacture, and distribution functions for high-performancebrake system applications (high-performance vehicles for mass production) and customers’global platforms (common platforms used on a worldwide basis)? Implement “Commonization and Standardization (C&S)”/“C&S plus topping (C&S+t)” inmonozukuri (value-added product manufacturing)? Achieve large improvements in profitability through the optimization of production capacityand human resource allocationIssues to be AddressedAs part of Akebono’s growth targets established in “Global 30” (acquire 30% of the worldwideshare of OEM disc brake pads) to be achieved in fiscal 2020, the Company has createdthe new midterm business plan “akebono New Frontier 30 - 2013” (aNF 30 - 2013) with thetarget year fiscal 2015, which it announced on November 2, 2012.This new midterm business plan has three main strategies: “Making a Difference byCreating Next-Generation Technologies,” “Continuous Drastic Cost Reduction and Its GlobalImplementation,” and “Acceleration of Globalization: Japan & North America plus Europe andAsia.” Our basic strategy established in 2010 remains unchanged, with aNF 30 - 2013 callingfor the fortification of our competitive standing by securing a 30% share of the worldwideOEM disc brake pad market in order to expand our business operations and raise our corporatevalue. An outline of the plan follows.● Making a Difference by Creating Next-Generation TechnologiesIn addition to increasing our knowledge and expertise in the realm of noise and vibration,Akebono also seeks to achieve “overwhelming cost competitiveness (Commonization andStandardization, low-cost brakes),” “unrivaled production engineering for global environmentfriendliness (lightweight/electro-mechanical products, responding to electric/hybrid vehicles,development of environment-friendly products),” “development of next-generation productionfacilities with global environment friendliness and cost competitiveness,” “products to beinstalled in high-performance vehicles,” and “advanced technology capable of acquiring alarge share of the compact and low-price car market, particularly in emerging countries.”● Continuous Drastic Cost Reduction and its Global ImplementationWe seek to raise efficiencies by pursuing C&S/C&S+t in all our businesses, and to increaseour competitive strength by identifying the characteristics of our customers and adaptingproducts to meet their needs. In addition, we also endeavor to promote reductions in rawmaterial costs through local material product sourcing, and optimized global manufacturing.● Acceleration of Globalization: Japan & North America plus Europe and AsiaThe Akebono Group positions its operations within Japan as a base from which technologiesand monozukuri (value-added product manufacturing) will be transmitted to the rest of theworld. In addition, we are taking steps to expand the North American business that wastransferred from Robert Bosch LLC, the high performance brake business in Europe, andbusiness operations in developing countries, including growth markets in Asia and otherregions. At the same time, we are improving our competitive strength through the fortificationof our global development structure and global supply network.Special Feature Social Repor t Environmental Repor t Economic Report Corporate InformationFiscal 2013 Performance Forecast by Region(billions of yen)Net salesOperatingincomeJapan 88.0 4.5North America 112.2 0.6Europe 6.2 (0.6)China 9.1 1.0Thailand 6.4 0.4Indonesia 15.5 2.1Elimination (13.0) 0Consolidated total 224.4 8.0The assumed exchange rates for the currentfiscal year ending in March 31, 2014 havebeen set at ?90.0 to US$, ?125.0 to euro,?14.5 to RMB, ?3.0 to THB, and ?0.009 toIRD.