Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of Change(%)	Factors
Overall
Sales	166,749	187,302	(11.0)	-
Operating income	10,217	19,781	(48.3)
Ordinary income	8,804	19,578	(55.0)
Current net income	5,441	11,658	(53.3)
MT business (Manual transmission business)
Sales	54,631	58,026	(5.9)	-Sales were down because the number of orders from automakers declined.
Operating income	7,262	9,435	(23.0)	-Operating income was down due to a slowdown in sales and increases in materials costs.
AT business (Automatic transmission business)
Sales	93,677	110,513	(15.2)	-Sales were down because the number of orders from automakers and transmission makers decreased.
Operating income	3,173	9,823	(67.7)	-Operating income was down due to a slowdown in sales and an increase in fixed costs such as depreciation costs.

New Orders
-In June 2008, the Company has won a contract to supply all the manual transmission clutches for use in the Nano, the world's lowest-priced vehicles to be launched by Tata Motors, an Indian conglomerate, in the autumn of this year. the Company will soon start providing these clutches from Ceekay Daikin, its joint venture company headquartered in Mumbai, India. Although the Company can expect an extremely small level of profit margin per unit in supporting this ultra low-cost vehicle, this business will allow the Company to develop a strong footprint in the market, which is projected to grow rapidly in emerging and newly-developing nations. Leveraging this program, The Company aims to win supply awards also from Japanese and European automakers that are eying opportunities to enter such markets in the future. The manual transmission clutches for the Nano will be manufactured at Ceekay Daikin's Aurangabad Plant located in the suburbs of Mumbai, Maharashtrata, which has already supplied clutches to Tata and GM vehicles. Though the details including the amount invested is not revealed, the Company says it has almost completed its facility expansion project to increase production of low-cost clutches in India. (From an article in the Nikkan Jidosha Shimbun on Jun. 24, 2008)



Outlook for FY2009

1.Performance Forecast

(in millions of JPY)

	FY2009 (estimated)		FY2008
	Sales	Operating income	Sales	Operating income
Overall (Consolidated)	120,000	1,200	166,749	10,217

2. Performance Forecast by Business

(in millions of JPY)

	FY2009 (estimated)		FY2008
	Sales	Operating income	Sales	Operating income
AT Business	66,400	(700)	92,068	3,173
MT Business	40,200	3,130	54,256	7,262

3. Performance Forecast by Region

(in millions of JPY)

	FY2009 (estimated)		FY2008
	Sales	Operating income	Sales	Operating income
Japan	76,700	900	104,462	4,597
U.S.A.	21,000	(500)	30,779	707
Asia/Oceania	20,600	700	28,861	4,394
Europe	1,700	100	2,645	436

R&D Expenditures

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	4,946	4,545	3,552
Number of R&D staff (% of the total number of staff)	341 (5%)	320 (4%)	255 (4%)

MT business: 1,153 million JPY
-In the area of the MT business, the Company focuses its development activities on developing high-performance dampers and dual mass flywheels. These products are designed to effectively absorb engine vibration on cars, which are powered by environmentally friendly, fuel-saving, lean-combustion engines and direct-injection engines.

-The company is further developing transmission systems that facilitate driving through the use of an automatic start/gear change. This system, which is especially suited to commercial-use vehicles, also improves fuel consumption too. Together with the migration to this new transmission systems, the company is also developing new products such as ECUs for automatic clutches, actuator units and clutch systems which precisely follow commands transmitted by ECUs.

AT business: 2,036 million JPY
-For the purpose of developing high performance torque converters, the Company carries out studies on inner oil flow by using cutting-edge computer systems. The focus of the development activities is on designing torque converters with excellent transmission efficiency and a high level of flexibility in terms of installing them in tight spaces. The Company developed advanced torque converters based on this research, already winning some contracts to supply these products.

-The Company also focuses on developing new products for hybrid vehicles. Some of the products it is working on are a vibration damper system to absorb oscillation when switching the hybrid power source from engine to motor (and the other way around); and a torque limiter that prevents excessive load on the engine.
-Dynax Corporation developed friction materials for lock-up clutches, and parts for automatic transmissions.


Licensing of Technology from other Companies (As of Mar. 2009)

Country	Company	Contract	Period
Germany	J M Foito	Manufacturing technology of wet type fly wheel with two pieces	From Jan. 1, 1992 for 15 to 20 years
Germany	LuK GmbH & Co	Patent for wet type fly wheel with two pieces	From Jan. 17, 1995 until the patent expiry date
Japan	Valeo Unisia Transmission	Patent for flexible fly wheel	From Jan. 31, 2000 until the patent expiry date

Licensing of Technology to other Companies (As of Mar. 2009)

Country	Company	Contract	Period
India	Ceekay Daikin Limited	Technical support and guidance on manufacturing clutches	From Dec. 7, 2004 for 10 years
U.S.A.	Exedy America Corporation	Technical support and guidance on manufacturing torque converters and clutches	10 years from Dec. 1, 2004
U.S.A.	Dynax America Corporation	Technical support and guidance on manufacturing automatic transmission components	From Jan 1, 1997 until the related products are discontinued
Australia	Exedy Australia Pty. Ltd.	Technical support and guidance on manufacturing clutches	5 years from Dec. 1, 2007
Hungary	Euro Exedy Clutch Ltd.	Technical support and guidance on manufacturing clutches	From Oct. 1, 2001 for the lifetime of the company
Thailand	Exedy (Thailand) Co., Ltd.	Technical support and guidance on manufacturing clutches	5 years from March 27, 2005
Thailand	Exedy Friction Material Co., Ltd.	Technical support and guidance on manufacturing friction materials for clutches	5 years from Jan 14, 2008
Malaysia	Exedy (Malaysia) Sdn. Bhd.	Technical support and guidance on manufacturing clutches	From Jun. 27, 2006 until the products are discontinued
China	Exedy Chongqing Co., Ltd.	Technical support and guidance on manufacturing clutches	From Dec. 9, 1995 through June 17, 2025
China	Exedy (Shanghai) Co., Ltd.	Technical support and guidance on on manufacturing friction materials for clutches; and torque converters	10 years from Jay 1, 2006
Indonesia	P.T. Exedy Indonesia	Technical support and guidance on manufacturing clutches	5 years from Oct. 19, 2005
Taiwan	Tamp Auto Parts Ind. Co., Ltd.	Technical support and guidance on manufacturing clutches	From Jun. 9, 2009 for 5 years
Columbia	Bonem	Technical support and guidance on manufacturing clutches	From Jul. 1, 1994 for 5 years

Capital Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	18,586	14,892	12,640
MT Business	4,557	2,330	2,352
AT Business	11,155	10,970	9,477

MT business
-Investment was focused on enhancing efficiency and increasing production at the headquarters and Asian subsidiaries.

AT business
-Investment was focused on increasing production at its headquarters' plants and its subsidiary in Japan.


Capital Investment Plans
-The Exedy Group plans to spend 12 billion yen on capital investments in the fiscal year ending March 2010. Out of this, 2 billion yen will be invested in the manual transmission business and 8.3 billion yen in the automatic transmission business.