Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Overall
Sales	49,020	60,945	(19.6)	-
Operating income	(608)	(1,691)	-	-
Ordinary income	(672)	(1,522)	-	-
Net income	(2,584)	(5,592)	-	-
Manual Transmission Division
Sales	3,534	6,575	(46.3)	-Sales of manual transmissions decreased year-on-year, especially those for use in SUVs and commercial vehicles.
Operating income	(455)	(313)	-	-
4-wheel drive systems Division
Sales	13,727	15,438	(11.1)	-Sales declined at the 4-wheel drive systems Division mainly because of falling demand for transfer cases used in pick-up trucks and SUVs (the Company's main product line.)
Operating income	58	(1,378)	-	-
Automobile parts Division
Sales	27,118	30,320	(10.6)	-Sales at the automobile parts Division decreased, especially those for the Japanese and North American markets.
Operating income	16	(608)	-	-

Business Restructuring

-The Company announced that it will launch a reorganization project, which includes restructuring of its global production operations and a reduction of 250 employees in Japan through an early retirement scheme. Projecting a market shift to emerging countries and small vehicles after the ongoing recession, the Company will reclass its product portfolio, reorganize its production structure, and optimize its workforce in order to become more competitive in the future market. Specifically, it will reorganize its three plants in Japan and two overseas by 2013, and put out the voluntary retirement program from July through August 2009. The focus of its product lineup, which has been set on transmissions units for large vehicles with a front-engine, rear-wheel-drive layout, will be switched to those for both small vehicles based on the front-engine, front-wheel-drive architecture and environmentally friendly vehicles by 2015, leveraging the company's core technologies. (From an article in the Nikkan Jidosha Shimbun on June 13, 2009)

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

Outlook for FY2010

(in billions of JPY)

	FY2010 (forecast)	FY2009	Rate of Change (%)
Sales	57.00	49.02	16.3
Operating income	1.10	(0.60)	-
Ordinary income	1.05	(0.67)	-
Net income	0.95	(2.58)	-

Business Plans for FY2010 Ending in March 2011

The Company will accelerate its structural reform project so as to be able to quickly respond to market changes by:
1. shifting operations to Asia and ASEAN countries, which are the main markets for its products used in front-engine, front-wheel-drive vehicles;
2. revamping the product range of its major products;
3. consolidating production facilities in Japan; and
4. reducing costs

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,269	1,536	2,061
Ratio in total sales	2.6%	2.5%	2.6%

R&D Structure

-As of Mar. 31, 2010 the number of overall R&D staff is 135, approximately 11.1% of employees within the Group.

R&D Activities

-The company is developing new transmissions for recreational vehicles, as well as for small- and medium-duty commercial vehicles. (Transmissions are its major products.) It is doing this by focusing on improving vehicle fuel efficiency, reducing emissions so as to meet environmental standards, and easing the burden on drivers behind the wheel.
-The Company is also strengthening its activities in engineering deceleration systems that can be equipped on various types of hybrid electric and electric vehicles.

4-Wheel Drive Systems
-In order to become more competitive in the transfer unit market, the Company's major line of business, the Company is developing lighter and more compact systems, while at the same time increasing its product range. It is focusing on transfer units for use in small pick-up trucks, which is a market segment that is growing worldwide.
-The Company is developing environmentally friendly transfer units for the growing front-wheel-drive-based, 4-wheel-drive vehicle market, by fully leveraging its expertise,
-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 is also working on improving the competitive advantage of its one-way clutches, and engineering manual steering gear boxes for mini vehicles.

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,049	2,793	2,775
Manual Transmissions	47	320	135
4-Wheel Drive Systems	380	326	1,094
Automobile parts	297	977	1,277

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

4-Wheel Drive Systems
-Capital investment was made mainly to strengthen its development capabilities, and maintain and upgrade its facilities

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

Plan for Installing New Facilities

(As of Mar. 31, 2010)

Segment	Planned amount (in millions of JPY)	Details and objectives
Overall	1,859	-
Manual Transmission	382	Maintaining and upgrading machining equipment Improving production efficiency
4-Wheel Drive Systems	847	Maintaining and upgrading machining equipment Improving production efficiency
Automobile parts	546	Maintaining and upgrading machining equipment Improving production efficiency