AKEBONO REPORT 2015

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Segment InformationAkebono Brake Industry Co. Ltd. and its consolidated subsidiaries engage mainly in the production and sale of brake products. A summary of informationclassified by reporting segment of the Company for the years ended March 31 2015 and 2014 is as follows:Millions of YenSegmentTotalAdjustment(Note 1)ConsolidatedJapan North America Europe China Thailand Indonesia total (Note 2)2015Sales to customers ?76 759 ?137 228 ?6 745 ?13 934 ?5 138 ?14 352 ?254 157 ? ? ?254 157Intercompany sales/transactions9 9813 0312 1353523572 02017 876(17 876)?Total revenue ?86 740 ?140 259 ?8 880 ?14 286 ?5 496 ?16 372 ?272 033 ?(17 876) ?254 157Operating income (loss) ? 3 602 ? (3 165) ? (544) ? 1 681 ? 262 ? 1 821 ? 3 656 ? 348 ? 4 004Thousands of U.S. Dollars (Note 3)SegmentTotalAdjustment(Note 1)ConsolidatedJapan North America Europe China Thailand Indonesia total (Note 2)2015Sales to customers $638 751 $1 141 953 $56 130 $115 953 $42 757 $119 432 $2 114 978 $ ? $2 114 978Intercompany sales/transactions83 05925 21917 7632 9322 97416 807148 756(148 756)?Total revenue $721 811 $1 167 172 $73 894 $118 885 $45 731 $136 239 $2 263 734 $(148 756) $2 114 978Operating income (loss) $ 29 973 $ (26 339) $ (4 526) $ 13 990 $ 2 177 $ 15 150 $ 30 426 $ 2 894 $ 33 320Millions of YenSegmentTotalAdjustment(Note 1)ConsolidatedJapan North America Europe China Thailand Indonesia total (Note 2)2014Sales to customers ?80 356 ?119 572 ?5 284 ?10 775 ?5 908 ?14 771 ?236 665 ? ? ?236 665Intercompany sales/transactions8 8823 2192 1191325191015 393(15 393)?Total revenue ?89 238 ?122 790 ?7 403 ?10 788 ?6 158 ?15 681 ?252 058 ?(15 393) ?236 665Operating income (loss) ? 3 427 ? 749 ? (567) ? 1 578 ? 529 ? 2 090 ? 7 806 ? 278 ? 8 084Notes: 1. Adjustment to operating income (loss) to eliminate intersegment transactions.2. Operating income (loss) after adjustments to reconcile total with figure presented in the consolidated statements of income.3. The value of the U.S. dollar is purely for the sake of convenience calculated using the approximate exchange rate as at March 31 2015 which was ?120.17 to $1 (figuresare rounded down to the nearest $1 000).M Changes in accounting policies accounting estimates and restatement of corrections(Adoption of Accounting Standard for Retirement Benefit)Concerning the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26 May 17 2012) and “Implementation Guidance for Accounting Standard for RetirementBenefits” (ASBJ Guidance No. 25 May 17 2012) Akebono has applied paragraph 35 of the Accounting Standard for Retirement Benefits and paragraph 67 of the “ImplementationGuidance for the Accounting Standard for Retirement Benefits” from the beginning of the fiscal year ending March 31 2015 revising its method of calculating retirement benefitobligations and service costs. The method of attributing expected benefit has been changed from a straight-line basis to a benefit formula basis. Also the method of determining thediscount rate has been changed from one using as the basis for calculation the number of years corresponding to the average remaining service period to a method using multiplebond yields set for each expected retirement benefit period. Regarding the application of the Accounting Standard for Retirement Benefits in accordance with the transitional treatmentstipulated in paragraph 37 the effect of the change in calculation methods for retirement benefit obligations and service costs arising from initial application has been recognizedin retained earnings at the beginning balance of the fiscal year ended March 2015.As a result net defined benefit decreased by JPY526 million and retained earnings decreased by JPY343 million in the beginning balance of fiscal year ended March 31 2015. The impact ofthis implementation was to raise operating income ordinary income and income before taxes and minority interests in the current fiscal year increased by JPY94 million respectively.(Adoption of Accounting Standard for Business Combinations)The “Accounting Standard for Business Combinations” (ASBJ Statement No. 21 revised on September 13 2013) “Accounting Standard for Consolidated Financial Statements”(ASBJ Statement No. 22 revised on September 13 2013) and “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7 revised on September 13 2013) could beapplied from the beginning of the consolidated fiscal 2014. Accordingly Akebono has applied these accounting standards (excluding Article 39 of ASBJ Statement No. 22 revised onSeptember 13 2013) from the current fiscal year. In accordance with these accounting standards we recorded the differences caused by changes in the equity share of subsidiaries inwhich we continue to control as capital surplus. In addition acquisition-related costs as expenses in the fiscal periods in which the costs are incurred was also recorded. Regardingbusiness combinations from the beginning of the current fiscal year we changed the method to reflect changes in the allocation of the acquisition costs arising from confirmation ofthe provisional accounting treatment on the consolidated financial statements that includes the acquisition date. Akebono has adopted these accounting standards from the beginningof the current fiscal year following transitional treatment based on Article 58-2(4) of “Accounting Standard for Business Combinations ” Article 44-5(4) of “AccountingStandard for Consolidated Financial Statements ” and Article 57-4(4) of “Accounting Standard for Business Divestitures”.As a consequence the impact on operating income ordinary income and income before taxes and minority interests in the fiscal year ended March 31 2015 increased by JPY49million and capital surplus decreased by JPY1 210 million at the end of fiscal year ended March 31 2015.