Financial overview

(In millions JPY)	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	19,208	17,203	11.7%	-
Operating income	1,899	1,603	18.5%
Ordinary income	2,647	2,054	28.9%
Net income	1,817	1,242	46.3%
Forged products business
Sales	15,005	13,257	13.2%	see note 1) below
Operating income	1,827	1,707	7.0%	see note 2) below

Factors
1. Sales at the forged products business increased by 13.2%. Siam Metal Technology Co., Ltd. of Thailand recorded a 28.8% sales increase, amounting to 515 million yen. Chubu Tanko Co., Ltd. and the Takahagi forging plant in Japan also recorded increases in both sales and profit.

2. Although revenue increased, the Company was too late in passing price hikes in special steel onto the selling prices of its products. This then significantly impacted the results of its sales operations.

Joint venture in Thailand became a wholly owned subsidiary
The Company made Siam Metal Technology Co., Ltd. its wholly-owned subsidiary, by acquiring the remaining 25% share in the Thai joint venture from Nissan Motor Co., Ltd. Under the umbrella of the Company - an independent supplier of forging products - Siam Metal Technology will expand its supply capacity in order to meet robust demand in Thailand. (From a press release on Nov. 6 2006)

Challenges for the future
Mid to long-term management strategy
1) The Company will work to improve its human resources by hiring qualified individuals and then building their knowledge and skills through training.
2) The Company will work to optimize both its production and sales structures and strive to reinforce its business strategies in and outside Japan
3) The Company will recruit more technical personnel and enhance training.
4) As measures to develop new and differentiated products and further improve productivity, the Company will work on developing new forging methods such as near net shaving and burr-free processing, in addition to using smaller sized facilities.

Investment Expenditure

(in millions of JPY)	FY2006	FY2005	FY2004
Overall	1,157	866	2,877
Forged products business	990	711	355

Forged products business: Major investments include: special high-voltage input and transformer facilities at the Company's subsidiary, Chubu Tanko; forging tools, dies and a 1,250-ton screw press at Siam Metal Technology Co., Ltd.

New Facilities

(in millions of JPY)

Company Name	Type of facility	Planned amount	Construction start	Planned completion	Production Capacity after completion
Siam Metal Technology Co., Ltd. (Rayong, Thailand)	3,000-ton forging press	620	2008.1	2008.6	Max 700T/Monthly (based on the stamping weight)