Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change(%)	Factors
Overall
Sales	152,671	166,749	(8.4)	-
Operating income	10,851	10,217	6.2	-
Ordinary income	10,613	8,804	20.5	-
Current net income	5,524	5,441	1.5	-
MT business (Manual transmission business)
Sales	45,733	54,631	(16.3)	-Overall sales decreased year-on-year. Although demand increased in China and other countries, the increase was not enough to cover the decrease in orders from automakers in Japan.
Operating income	5,896	7,262	(18.8)	-
AT business (Automatic transmission business)
Sales	95,650	93,677	2.1	-Sales of products for automatic transmissions increased year-on-year, thanks to the significant recovery in demand from both automakers and transmissions manufacturers in Japan.
Operating income	5,216	3,173	64.4	-

Recent Developments in Japan

-The Company has decided to make a full-scale entry into the business of dual-clutch transmissions (DCTs). It has organized a dedicated development team by selecting staff out of its development department for clutch products for manual transmissions (MT) and greatly increased the development staff as well. Replacement of MT and torque-converter type AT (automatic transmissions) by DCT progresses, mainly by European automakers. The Company, therefore, will reinforce development of DCT in order to provide the full lineup of transmission parts and explore new business opportunities in Europe and other markets. (From an article in the Nikkan Jidosha Shimbun on Oct. 30, 2009)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditures

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	4,370	4,946	4,545
MT business	1,119	1,153	912
AT business	2,047	2,036	1,948

R&D Structure

-Three hundred and thirty three people are engaged in research and development activities. (As of March 2010)

R&D Activities

MT business
The Company developed the following technologies at its automatic transmission business:
-lean-burn engines to drive environmentally friendly and fuel-efficient vehicles
-high-performance dampers and dual mass flywheels to absorb vibration from direct injection diesel engines
-dampers equipped with a torque limiter for hybrid electric vehicles

-The Company developed computer units for automated manual transmission systems that will be installed on commercial vehicles. It also developed actuator units and clutch systems for the commercial vehicle market. These units and systems can accurately control clutches based on commands coming from an onboard computer.
In addition, the Company is working on engineering dual clutch transmission technology, which will enable power to be transmitted smoothly without interruption, while still offering a high level of fuel efficiency comparable to that of a manual transmission system.

AT business
-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.

Licensing of Technology from other Companies

(As of Mar. 31, 2010)

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

Licensing of Technology to other Companies

(As of Mar. 31, 2010)

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	Exedy Dynax Europe 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, 2010
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
U.S.A.	Dynax America Corporation	Technical support and guidance on manufacturing automatic transmission components	From Apr. 1, 2010 through Mar. 31, 2011
China	Shanghai Dynax Corporation	Technical support and guidance on manufacturing automatic transmission components	From Oct. 1, 2009 through Mar. 31, 2019
China	Dynax Industry (Shanghai) Corporation	Technical support and guidance on manufacturing automatic transmission components	From Sep. 1, 2002 until the related products are discontinued
China	Exedy Chongqing Co., Ltd.	Technical support and guidance on manufacturing automatic transmission components	10 years from Aug. 5, 2003

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	12,980	18,586	14,892
MT Business	2,810	4,557	2,330
AT Business	8,832	11,155	10,970

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 Asian subsidiaries.

Capital Investment Plans

(As of Mar. 31, 2010)

-The Group plans to spend 16.5 billion yen on capital investments in the fiscal year ending Mar. 2011. Out of this, 4.6 billion yen will be invested in the manual transmission business and 9.6 billion yen in the automatic transmission business.