Financial overview

(in millions of JPY)

	FY2007	FY2006	Rate of Change (%)	Factors
Sales	48,820	42,418	15.1	-The Company conducted marketing activities in and outside Japan, while continuing to reorganize its production structure so as to enhance its production capacity and improve its production operations. In terms of its global operations, Piolax enhanced its production capacity mainly in Asia to cope with rising demand. In doing so, the Company launched commercial operations at a new plant in China, strengthening its supply network in the region.
Operating income	4,074	2,340	74.1	-
Ordinary income	4,877	3,114	56.6	-
Current net income	3,281	1,981	65.6	-

New supply orders
-In the precision spring segment, Piolax has alliances with Korean and Japanese carmakers to conduct joint development activities. Following its activities in Thailand and Mexico, the Company in China completed joint development activities with a Japanese carmaker operating in the country, launching commercial production.  

-The Company has been receiving inquiries from major carmakers in and outside Japan about its side locks for glove boxes, expecting an increase in the number of vehicle models that could be equipped with these locks.

-Its share of new dampers grew due to an increase in joint development activities conducted with carmakers in Japan, Europe, the U.S.A., and Korea.
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A greater number of carmakers, including those based outside Japan, are adopting the Company's in-tank evaporation systems for use in metal tanks equipped on their vehicle models.


Overseas Business
-The Company will begin local production of automotive metal parts in China in fiscal 2008, at the earliest, in order to meet the growing needs from local Japanese car manufacturers, including Nissan and Honda, which are expanding their automotive production in China. The supplier will study the possibility of adding a new facility to its existing plant in Guangdong Province. Producing metal parts in addition to resin parts will allow the company to triple its automotive sales in China to 2.2 billion yen by 2010. The supplier will add production lines on the premises of the new plant to make metal parts. (From a story in the Nikkan Jidosha Shimbun on Dec. 6, 2007)

-The Company will expand its business with US automakers. The supplier has already acquired a new order from Ford Motor Company for components for pickup trucks. It will also be sending its engineers to Ford R&D departments in an attempt to win more orders by getting directly involved with its development activities. The Company will begin supplying fasteners to clip both exterior and interior parts to bodies of new pickup trucks that the US automaker is planning to release in 2010. The fastener production for Ford will begin in the latter half of 2009 at its Thai plant. The company also has a plan to expand its capacity to produce glove box side lock components for General Motors Corporation to accelerate its focus on the global market. By fiscal 2010, the company will triple its sales to 600 million yen, compared to the current level. All these efforts will allow the company to raise a ratio of its sales to US makers to 7 to 8%, which is about 2.5 times of what it is now, in ten years from now. (From an article in the Nikkan Jidosha Shimbun on Jun.16, 2008)

R&D Section
-R&D expenses were 544 million yen in FY2007.

-R&D expenditure on automotive products was 427 million yen.


Recent R&D Activities
Precision springs
-The Company developed compressed coil spring materials used in engines and gears. 

-It commercialized products that are more compact and lighter in weight 

-The Company strengthened its development activities on complex springs, enabling them to be installed easier. 

-The Company worked on developing surface coatings for spring materials. These coatings do not contain hexavalent chromium.

-It started development activities on products that comply with the new REACH Regulation in Europe 

Industrial fasteners
-The Company is developing versatile fasteners that can be used on both thin and thick metal plates, fasteners that can be more easily installed on vehicle bodies because they require less force when being installed, fasteners that have very powerful fastening capabilities, and fasteners that can be more easily disassembled when cars are being scrapped.  

-The Company is considering migrating to materials that emit less odor in vehicle interiors. In addition, it is working to develop environmentally friendly products and ones that enhance interior comfort. 

-The Company is currently developing high-strength, user-friendly net hooks used in car interior parts.

Small units
-The Company developed side locks for glove boxes, releasing them in January 2003. These are now being equipped on an increasing number of vehicle models, improving performance and workability.

-The Company worked on developing new dampers. 

-The Company is currently developing hinge parts to open/close the console box lid and the floor board in the rear luggage compartment.

Fuel systems
-In the area of valves for plastic tanks, the Company enhanced the performance and reduced the manufacturing costs of rollover valves and inlet check valves.


Licensing-in technology from other companies (As of March, 2008)

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

Note: Norma Germany GmbH was called Rasmussen GmbH before May, 2007.


Licensing-out technology to other companies  (As of March, 2008)

Company	Product	Contract Details	Term
Sanjia Industrial Co., Ltd.  (Taiwan)	Metallic and plastic fasteners	Manufacturing technology	From October 6, 1987 through October 5, 1992. To be renewed every 10 years.
Taiwan Houmu Industrial Co., Ltd. (Taiwan)	Automotive clutch pressure springs, torsion springs and engine valve springs	Manufacturing technology	From November 1, 1978 through October 31, 1983. To be renewed every 5 years.
Piolax Corp.(USA)	Precision plastic slips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from April 1, 1993.
Piolax Ltd. (UK)	Precision plastic slips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from August 8, 1995.
Piolax Co., Ltd. (Korea)	Precision plastic slips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	From June 20, 1995 through June 19, 2006. To be renewed each year.
Piolax (Thailand) Ltd. (Thailand)	Precision plastic slips, precision springs, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	For an indefinite period from August 10, 2000.
Dongguan Piolax Co., Ltd. (China)	Precision plastic slips, precision spring, and related assembly products for the automotive and electronics industry.	Covers technology, engineering and marketing services	From July 1, 2004 through June 30, 2014. To be renewed each year.

Capital Expenditure
-In FY 2007, the Company's capital investments totaled 3,567 million yen, which was mainly spent on automotive parts production facilities. 
-The Company spent 2,469 million yen in Japan and 1,098 million yen outside Japan.

New Facilities (automobile related facilities)

Company Office	Location	Business	Expected Investment (Thousands of yen)	Started in:	Expected to Complete in:
Piolax Inc. Yokohama Technical Center	Yokohama City, Japan	Design and development	37	Apr., 2008	Mar., 2009
		Molds	391
Piolax Inc. Mooka Plant	Tochigi Pref., Japan	Plant	159	Apr., 2008	Mar., 2009
		Production facilities	474
		Molds	593
Piolax Inc. Fuji Plant	Shizuoka Pref., Japan	Plant	9	Apr., 2008	Mar., 2009
		Production facilities	361
		Molds	85
Piolax Inc. Kyushu Plant	Fukuoka Pref., Japan	Plant	13	Apr., 2008	Mar., 2009
		Production facilities	142
		Molds	38
Piolax Medical Devices, Inc.	Yokohama City, Japan	Plant	13	Apr., 2008	Mar., 2009
		Production facilities	56
		Molds	1
Piolax Corp. Head Office/ Plant	Georgia, USA	Plant	4	Jan., 2008	Dec., 2009
		Production facilities	275
		Molds	57
Piolax Ltd. Head Office/Plant	Lancashire, UK	Production facilities	55	Jan., 2008	Dec., 2009
Piolax Co., Ltd Head Office/Plant	Inchon, Korea	Production facilities	92	Jan., 2008	Dec., 2009
		Molds	65
Piolax (Thailand) Ltd. Plant	Rayong, Thailand	Buildings	175	Jan., 2008	Dec., 2009
		Production facilities	115
		Molds	70
Dongguan Piolax Co., Ltd.	Dongguan, China	Plant	234	Jan., 2008	Dec., 2009
		Production facilities	669
		Molds	190