Financial overview

In million JPY	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	36,319	32,195	12.8	- Sales increased, as the Company maintained a high rate of capacity utilization for auto parts throughout the year. - In addition, sales of HDD suspensions grew.
Operating income	3,099	3,047	1.7	-
Ordinary income	3,295	3,349	(1.6)	- Ordinary income decreased due to initial expenses incurred before the Company's new overseas affiliate started operations. This was despite increased revenue overall and favorable foreign currency translation.
Net income	1,807	1,733	4.3	- Net income increased because the Company no longer needed to post an impairment loss, which the Company did in the previous year.
Functional precision components division
Sales	18,874	16,177	16.7	Sales of the following parts steadily increased: engine parts (valve springs and ring gears for starters), transmission parts (return springs, damper springs, and shaped rings), and safety parts (retractor spiral springs for seat belts and braking system parts).

R&D Expenditure
- R&D costs in FY2006 totaled 1,097million yen.

(Major R&D Achievements)
Motors for EVs and inverter peripheral products
Looking at the future of the hybrid vehicle market, the Company is working on developing products such as motors for EVs and inverter peripheral devices by leveraging technology in the field of insulating film processing, which is a new technology that the Company developed. This technology was developed based on precision plastic molding, one of the Company's core technologies. Moreover, as a theme on which to base new developments, the Company is working on developing products which can be used both as mechanical as well as functional components.

Piston-ring material and three-bead valve cotter material
By leveraging technology that is used for producing precision-made, irregular-shaped wires, the Company is improving the accuracy of irregular-shaped wires used in automotive parts, developing a method to process the wires in complicated shapes. The Company finished developing materials to be used for unpolished piston-rings and three-bead valve cotters for diesel power plants, commercializing these materials.

Capital Expenditure
The Company invested 3,667million yen in FY2006.
-The Company invested mainly to enhance its production capacity, improve quality, and rationalize operations.

(Major achievements)
- Production facility for precision functional products:
To increase the production volume of valve springs and ring gears for cranking motors, improve the quality of its products, and optimize production operations for these, the Company invested 2,289 million yen.

New Facilities (Functional Precision Components division)

Company or Office Name	Facilities	Expected Investment (thousand yen)	Started	Complete
Headquarters and Plant (Kyoto, Japan)	Manufacturing equipment	357,900	2007.04	2008.03
	Computer system, Buildings and structures (company-wide common system)	362,580	2007.04	2008.03
Toyota Plant (Aichi Pref., Japan)	Manufacturing equipment	804,000	2007.04	2008.03
Hirose Technology (Aichi Pref., Japan)	Manufacturing equipment	244,800	2007.04	2008.03
Suncall Engineering (Yamanashi Pref., Japan)	Manufacturing equipment	131,000	2007.04	2008.03
Suncall Kikuchi (Kumamoto Pref., Japan)	Manufacturing equipment	121,900	2007.04	2008.03
Suncall America Inc. (Indiana, USA)	Manufacturing equipment	415,580	2007.04	2008.03
Sancall High Precision (Thailand) Ltd. (Chonburi, Thailand)	Manufacturing equipment	95,500	2007.04	2008.03
Increased capacity after completion (at all the facilities above): improvement in quality and productivity