Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of Change (%)	Factors
Overall
Sales	51,618	39,476	30.8	-Although there was a negative impact of the Great East Japan Earthquake at the end of the term, overall sales increased from last year’s result, thanks to strong sales especially in the first half of the year.
Operating income	3,803	2,116	79.7	-
Ordinary income	3,801	2,112	80.0	-
Current net income	1,159	2,030	(42.9)	-
Functional products
Sales	25,432	21,129	20.4	-Sales increased year-on-year, thanks to recovery in business at its major customers.
Operating income	4,154	4,047	2.6	-
Anti-vibration products
Sales	19,768	13,808	43.2	-Sales increased year-on-year, thanks to recovery in business at its major customers.
Operating income	2,108	830	154.0	-

Supply Agreements

-The following are major supply agreements in FY 2010.
Functional products

Product	Customer	Status
Couplings	Major brake supplier in China	Commercial production started
Seals for fuel supply systems	Major parts makers in Japan	Commercial production started
Cushions for air conditioner motors	Major parts makers in Japan	Commercial production started
Outboard boots	Japanese automaker’s plant in Malaysia	Won a supply award
Wiper blade rubber	Korean automaker	Commercial production started

 Anti-vibration products

Product	Customer	Status
Viscous dampers for sport vehicles	Car makers in Japan	Commercial production started
Isolation pulleys for 3-cylinder engines	Car makers in Japan	Commercial production started
Isolation pulleys	Car makers in Europe	Won a supply award
Damper pulleys	U.S. car maker	Won a supply award

New Company
-The Company announced that it will establish Fukoku Vietnam Co., Ltd. (tentative name) in Hung Yen Province, Vietnam. The new company will manufacture automotive brake parts and other products, starting in July 2011. It will be capitalized at 3.6 million US dollars, which will be fully invested by Fukoku. Sales at the subsidiary are expected to reach 1.65 million US dollars in fiscal year 2011 and 8 million US dollars in fiscal year 2015. (From a press release on September 28, 2010)

Joint Ventures

-Thai Fukoku Co., Ltd., a consolidated subsidiary of Fukoku Co., Ltd., will form a joint-venture company in Thailand with Pana Plus Co., Ltd., which is a Thailand-based casting company. The new entity, Thai Fukoku Pana Foundry Co., Ltd., will be established in Samut Prakan Province in November 2010. It will manufacture automotive anti-vibration products for Thai Fukoku, starting in May 2011. The joint venture will be registered at 15 million baht (approximately 40 million yen), of which 66.6 percent will be invested by Pana Plus and the remaining 33.4 percent by Thai Fukoku. (From a press release on October 25, 2010)

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

Outlook for FY 2011

(in millions of JPY)

	FY2011 Forecast	FY2010 Result	Rate of Change(%)
Sales	52,000	51,618	0.7
Operating income	3,600	3,803	(5.3)
Ordinary income	3,600	3,801	(5.3)
Net income	2,100	1,159	81.2

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	1,217	1,128	837

R&D Activities

 -The Company developed a special mount material for use in automotive exhaust systems.

Licensing of Technology to Other Companies

(As of Mar. 31, 2011)

Partner	Contract	Validity
Rood (U.S.A.)	Design and manufacturing technology of torsion bushings and surface effects	From October 23, 2001 to October 23, 2011
C.F. Gomma S.p.A	Design and manufacturing technology for air springs	From July 2, 2003 to July 1, 2013

Licensing of Technology from Other Companies

(As of Mar. 31, 2011)

Partner	Contract	Validity
Rood (U.S.A.)	Manufacturing technology of viscous mounts	From October 23, 2001 to October 23, 2011
C.F. Gomma S.p.A. (Italy)	Manufacturing technology of CVJ boots	From December 1, 2002 to November 30, 2012

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	3,718	1,376	3,241
Functional products	1,619	1,263	2,883
Anti-vibration products	1,853

-The Company announced that it will inject a total capital of 230 million Indian rupees (approx. 409 million yen) into its subsidiary, Fukoku India Private Limited in June 2011. After the capital injection, the subsidiary's registered capital will increase to 355 million rupees (approx. 632 million yen). Fukoku India, established in October 2010, originally planned to manufacture brake products at its leased facility. The purpose of the investment is to build its own factory and add anti vibration products to its product portfolio. Fukoku India aims to generate 130 million rupees (approx. 231 million yen) in sales in 2012 and 777 million rupees (approx. 1,383 million yen) in 2015. (From a press release on March 29, 2011)

Functional products
-The Company invested mainly in establishing a new plant in Korea, streamlining its operations and maintaining its production facilities.

-The Company announced that it will inject a total capital of 1.8 million USD (approx. 145 million yen) into its subsidiary, Fukoku Vietnam Co., Ltd in May 2011. After the capital injection, the subsidiary's registered capital will increase to 5.4 million USD (approx. 437 million yen). Fukoku Vietnam was established in March 2011 to manufacture and sell automotive rubber products. The additional investment will be used for plant expansion. (From a press release on March 29, 2011)

-The Company announced construction of a new plant in Thailand for production of wiper parts for supply to the global market. The Company will infuse additional capital to its consolidated subsidiary Siam Fukoku Co., Ltd. based in Samutprakarn, Thailand for funding construction costs of a new plant so that it will be able to go into operation in July 2012. The local subsidiary manufactures products, mainly functional sealing parts, at its two facilities and employs about 620 workers. An additional production of wiper parts is meant to increase supply capacity to the global market. A new plant will be set up at the site of 64,000 square meters in Khon Kaen with an investment of 750 million baht (approx. 2 billion yen). After the inauguration of the new production facility, Siam Fukoku is expecting to generate 925 million baht (approx. 2.46 billion yen) in yearly sales in 2012 and 1.5 billion baht (approx. 3.99 billion yen) in 2013, up from 720 million baht (approx. 1.92 billion yen) in 2010. A capital increase of 240 million baht (approx. 638 million yen) will be conducted wholly by Fukoku in February. (From an article in the Nikkan Jidosha Shimbun on February 2, 2011)

Anti-vibration products
-The Company announced that its subsidiary Fukoku Korea Co., Ltd., based in Ansan, Gyeonggi-do, Korea, has obtained industrial land in Boryeong, Chungchongnam-do, where construction of Fukoku Korea's new damper plant started in 2010. The newly acquired land is adjacent to the premises of the new plant and the Korean unit plans to use the lot to build a foundry. (From a press release on April 27, 2010)

Planned Capital Investments

(As of Mar. 31, 2011)

Company Office	Purpose	Estimated amount of investment (million JPY)	From	To
Gunma No.2 Plant	Installing facilities for manufacturing industrial rubber products	252	Apr. 2011	Oct. 2011
Siam Fukoku Co., Ltd.	Acquiring a piece of land and constructing a new plant	1,506	Aug. 2011	Apr. 2012
Fukoku India Private Limited	Constructing a new plant and installing facilities for manufacturing industrial rubber	378	Apr. 2011	Dec. 2011
Fukoku Vietnam Co., Ltd.	Acquiring a piece of land and constructing a new plant	208	Apr. 2011	June 2011