Financial overview

( in millions of JPY )

-	FY2006	FY2005	R.C. (%)	Remarks
Sales	147,204	129,073	14.0%	see note 1) below
Operating income	6,678	4,450	50.1%	-
Ordinary income	5,691	3,612	57.6%	-
Net income	2,989	1,499	99.4%	-

Remarks
1) Sales of assembly parts to Honda Motor, one of its main customers, increased; and also sales of related materials increased.

2) Ordinary income increased primarily due to favorable exchange rate translation.

The business results for each geographical area
<Japan>
Sales in Japan increased by 18.4% year-on-year to 55,747 million yen while the Company's operating profit was up by 52.4% to 3,187 million yen from that of previous period. This was mainly attributable to greater sales to Honda, the Company's main customer, and brisk sales of die facilities.
<North America>
Sales in North America were up by 7.4% to 77,507 million yen due to higher sales to Honda and the weakened yen. Operating profit also increased by 39.9% compared to that of the previous year to 3,484 million yen.
<Asia>
Sales in Asia rose by 31,8% to 9,832 million yen, thanks to increased production volume at F-Tech Zhongshan Inc. and the launch of commercial operations at F-Tech Wuhan Inc. Operating profit also rose by 11.7% year-on-year to 839 million yen.

Status of activities
<Production>
The Company responded to the launch of the fully remodeled Honda CR-V in Japan, North America and China by supplying its products for installation on the vehicle. In addition, the Company was able to successfully supply products in time with the launch of the Stream in Japan and the R-DX in North America.
<Sales and promotional activities>
The Company is currently promoting sales of suspensions for use in Honda's new vehicle models, pedals with an anti-backward mechanism that are considered to enhance safety during collisions, as well as adjustable pedals.
<Orders>
- In North America the Company expanded its business by winning new orders from GM and Toyota Motor Manufacturing North America.
- In the Philippines the Company won a new order from Toyota Manufacturing Philippines Inc.
- For the Honda Fit, which is to be fully remodeled in the fall of 2007, the Company won a new order for rear axle beams. The Company's promoting the advantages of its technological expertise greatly contributed to this sales increase.

Establishment of local subsidiary
The Company is constructing a new plant at F-Tech Mfg. (Thailand) Ltd. in Ayutthaya, which will be the Company's fourth plant in Asia (excluding Japan). The building construction is progressing as planned, with mass-production scheduled to start in early 2008.

R&D Expenditure

( in millions of JPY )

-	FY2006	FY2005	FY2004
R&D	1,452	1,267	1,283

Development in FY2006
Main object: Work on environmental and safety problems of vehicles.

- Environment: The Company is developing optimal structural designs by using hydro-forming technology and adding weight-saving features. It is doing this by introducing the use of aluminum materials and also by developing mass production technology so that its superior technology can be applied efficiently and at low cost.

- Safety: Promoting the wide spread use of anti-collision technologies.

-Others: Promoting the activities to propose products in new areas, making use of the Company’s existing technologies such as a hydro-forming technology.


R&D achievements
- The Company utilized a prototype that makes high-pressure hydroforming possible. It is has now introduced this technology in its Haga Technical Center. Honda has continuously been using the Company's hydroforming technology, for example, relying on it to produce sub-frames of the Accord, which will be fully remodeled in 2007.
- The Company is the first one in the world to apply technology in the field of two-color plastic molding to create organ-type axle pedals. It is making them for the Accord. The new technology, while enabling the company to remain competitive, also contributes to reducing the weight of the axel pedals produced.

Major technological assistance (as of March 2007)

Partners	Country	Type of Assistance	Contract Period
CHENG YU Industry Co., Ltd.	China	Technical assistance dealing with manufacturing technology, etc	Dec.1994-Dec.1999 Yearly automatic renewal from then on
Tallent Engineering Ltd.	UK	Technical assistance dealing with manufacturing technology, etc	June 1996-June 2009 Yearly automatic renewal from then on
Progressive Tools & Components (P) Ltd.	India	Technical assistance dealing with manufacturing technology, etc	Nov.1996- now under way
Hwa Shin Co., Ltd	South Korea	Technical assistance on manufacturing technology	Dec.1999-Dec.2002 Biennial automatic renewal from then on
Scorpius da Amazonia	Brazil	Technical assistance on manufacturing technology	Sep. 16, 1999- Sep. 15, 2009 Annual automatic renewal from then on
YPS Limited	Turkey	Technical assistance on manufacturing technology	Apr. 1, 2000- Mar. 31, 2005 Annual automatic renewal from then on
Chases Co., Ltd.	South Korea	Technical assistance on manufacturing technology	Jul. 20, 2005- Jul. 19, 2010 Annual automatic renewal from then on
Vietnam Autoparts Co., Ltd.	Vietnam	Technical assistance on manufacturing technology	Dec. 27, 2005- Dec. 26, 2010 Annual automatic renewal from then on
SMC Co. Ltd.	South Korea	Technical assistance on manufacturing technology	Apr. 4, 2006 Apr. 3, 2011 (Annual automatic renewal from then on)

Investment Expenditure

(Unit: million yen)

-	FY2006	FY2005	FY2004
Investment Expenditure	14,820	8,190	5,915
Investment for new product start-up	4,032	5,033	5,092

Strengthening internal procurement structure
For mass production of the organ-type axle pedals developed by the Company for the Honda Accord, it has introduced dedicated facilities at Johnan Manufacturing Inc., its group company, to strengthen its network for procuring plastic parts in-house.

Capital investment now under way

Company Name Location	Segment	Planned investment (in million yen)	Start	Completion	Increased capacity after completion
F-Tech: Kameyama Plant, etc. (Mie, Japan)	Businesses related to automotive components	1,629	Apr. 2007	Mar. 2008	Facility expansion in line with launch of a new model
F & P Mfg., Inc. (Ontario, Canada)	Businesses related to automotive components	155	Apr. 2007	Mar. 2008	Facility expansion in line with launch of a new model
F & P America Mfg., Inc. (Ohio, USA)	Businesses related to automotive components	640	Apr. 2007	Mar. 2008	Facility expansion in line with launch of a new model