Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of Change (%)	Factors
Overall
Sales	60,945	77,843	(21.7)	-Sales of industrial machinery increased; however, sales of the Company's main product line, transmissions, especially manual transmissions used in commercials vehicles, and transfer cases used in large-sized pickup trucks sold in North America, decreased. As a result, overall sales decreased.
Operating income	(1,691)	2,690	-	-
Ordinary income	(1,522)	2,758	-	-
Net income	(5,592)	1,366	-	-
Manual Transmission Division
Sales	6,575	8,214	(20.0)	-Due to the economic slowdown that started in October 2008, sales of manual transmissions for SUVs and commercial vehicles drastically declined.
Operating income	(313)	292	-	-
4-wheel drive systems Division
Sales	15,438	25,984	(40.6)	-In North America, since October 2008, sales of transfer cases for SUVs and large-sized pickup trucks significantly decreased.
Operating income	(1,378)	1,093	-	-
Automobile parts Division
Sales	30,320	35,818	(15.3)	-Sales decreased as a result of automakers cutting their production volume in response to the economic slump in the entire automotive industry since October 2008.
Operating income	(608)	731	-	-

R&D Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	1,536	2,061	2,134
Ratio in total sales	2.5%	2.6%	2.8%

R&D Structure
-As of Mar. 31, 2009 the number of overall R&D staff is 176, approximately 10.8% of employees within the Group.


R&D Activities
Manual Transmissions
-The Company's main products are transmissions used in SUVs and small- and mid-sized commercial vehicles. In its R&D activities in this area, the Company is working to solve environmental problems such as CO2 emissions and working to find ways to reduce manual operations by drivers.

-The Company strengthened its R&D activities on speed reducers for hybrid and electric vehicles.

4-Wheel Drive Systems
-The Company is conducing R&D activities involving its main product line, transmissions, by focusing on transmissions for small-sized pickup trucks. It intends to develop a complete product lineup of these transmissions that will offer greater commercial appeal.

-The Company is conducting R&D activities on environmentally friendly, 4-wheel drive systems for front-drive 4WD vehicles, making use of its proprietary technology gained from its past experiences in working on transmissions.

-The Company also developed and started production of differential gear carriers for ATVs, making use of its 4WD technology.

Automobile Parts
-The Company is conducing R&D activities on VAs, utilizing its strength in production technology and expertise as a manufacture of unit-based products.

-The Company undertook R&D activities to improve the commercial appeal of one-way clutches that use its proprietary technology.

Capital Investment

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	2,793	2,775	4,985
Manual Transmissions	320	135	555
4-Wheel Drive Systems	326	1,094	800
Automobile parts	977	1,277	3,346

-Capital investment was made mainly to streamline, maintain and upgrade its facilities.


Plan for Installing New Facilities (As of Mar. 2009)

Segment	Planned amount (in millions of JPY)	Details and objectives
Overall	1,585	-
Manual Transmission	156	Streamline, maintain and upgrade facilities
4-Wheel Drive Systems	927	Streamline, maintain and upgrade facilities
Automobile parts	330	Streamline, maintain and upgrade facilities