Asmo Co., Ltd. Business report FY2008

Business Highlights

Financial Overview

(in million JPY)

	FY2008	FY2007	Rate of Change (%)	Factors
Sales	261,410	321,154	(18.6)	-Sales decreased due to a decline in production volume of Japanese automakers inside and outside Japan as well as foreign exchange loss.
Operating income	(13,785)	12,293	-	-Capacity utilization loss, foreign exchange loss due to strong yen and increase in material prices such as iron put pressure on the Company's profit.
Ordinary income	(15,550)	10,005	-
Net income	(12,937)	3,259	-	-The Company posted the impairment loss on fixed assets of Asmo North Carolina, Inc. as an extraordinary loss.

<Japan>
- Sales decreased by 19.5% to 212 billion 340 million yen due to decreased production volume of vehicles in Japan, decreased export of parts for vehicles that were produced overseas, and foreign exchange loss.

<U.S.A.>
- Sales decreased by 31.1% to 44 billion 722 million yen due to a substantial decline in vehicle production.

<Other regions (Asia and Europe)>
- Sales decreased by 6.6% to 45 billion 157 million yen due to a decline in production volume of vehicles in Europe and ASEAN countries.

R&D

R&D Expenditure

(in millions JPY)

	FY2008	FY2007	FY2006
R&D Expenses	13,424	13,513	13,875

R&D Structure
-With regards to R&D activities for technical aspects of new product development, the R&D sections played a central role in further developing the company's global operations. The company furthered R&D activities in cooperation with Asmo Detroit, Inc. R&D activities are conducted with several key words in mind. These are safety, environment, comfort and convenience.

-In dealing with and responding to environmental issues, the company is conducting R&D activities to develop motors using new systems that contribute to enhancing automotive fuel consumption and reducing emission gas. The company is also working on developing new, highly efficient and light-weight drive-trains and alternative technologies that are aimed at controlling environmentally harmful substances used in products.

R&D Achievements
Next-generation products
-The Company standardized and realized mass production of its motors including electronic throttles and actuators for variable nozzle turbochargers through the development of a small and light motor.

-The Company realized mass production of a head lamp cleaner with smaller size and weight. Reduction in size and weight were achieved by optimizing pump efficiency.

-An electric fan motor, the size and weight of which were reduced and function improved through consolidation of the motor and driving circuit, was selected for mounting on vehicles.

New products
-The Company realized mass production of rear wipers stored in spoiler to improve design.

Technological Licensing-in Agreements (As of Mar. 31, 2009)

Partner	Country	Product	Contractual Coverage	Contract Period
Canon	Japan	Ultrasonic wave motors	-Licensing of patented technologies and receiving of technical information	Jan. 1, 1998 - Dec. 31, 2017
Matsushita Electric Industrial Co., Ltd. (Panasonic)	Japan	Ultrasonic wave motors	-Licensing of patented technologies and receiving of technical information	March 19, 1999 - automatic extension

Investment Activities

Capital Expenditure

(in millions JPY)

	FY2008	FY2007	FY2006
Amount of investment	18,785	21,420	26,805

-The Company focused on the investment necessary to develop successor models of the current products with reduced size and weight and improved function.

-In FY2009, the fix amount budgeted for capital expenditures (for building new facilities and expanding existing plants) is 9,100 million yen.

New Facilities