Financial Overview

(in millions of JPY)

	FY2010 (ended Mar. 2011)	FY2009	Rate of Change (%)	Factors
Overall
Sales	60,717	49,020	23.9	-
Operating income	1,293	(608)	-	-
Ordinary income	1,296	(672)	-	-
Net income	1,172	(2,584)	-	-
Control-unit Business
Sales	29,961	21,648	38.4	Sales improved due to increased sales of transmissions for SUVs sold in North America.
Operating income	612	(683)	-	Operating income improved as a result of higher sales volumes and successful rationalization initiatives.
Parts Business
Sales	30,435	27,118	12.2	Sales improved as a result of greater sales volume of automotive parts in both China and the U.S.A.
Operating income	600	16	3,650.0	Operating income improved as a result of higher sales volumes and successful rationalization initiatives.

Contracts

The Company has been awarded a contract to supply gear boxes for the Suzuki Swift compact plug-in hybrid vehicle coming to the market this fall. This is the first time for Univance to deliver its transmission units for a hybrid passenger vehicle. The Swift plug-in hybrid program follows the hybrid business Univance previously won from Suzuki Motor Corporation. Its gear box with a built-in generator is featured on the hybrid version of the Elf light-duty truck. (From an article in the Nikkan Jidosha Shimbun on May. 20, 2010)

Recent Developments Outside Japan

Thailand
The Company will establish a subsidiary in Thailand to manufacture and sell drive units for all-wheel-drive vehicles. The new company is scheduled to be formed in April this year with operations slated to begin during 2012. In Southeast Asia, Univance already has a production facility in Indonesia. Setting up a second plant in the region will enhance the company’s supply capability for drive units used in pickup trucks and other vehicles. The new company, Univance (Thailand) Co., Ltd., will be located in Chonburi. It will be capitalized at 142 million baht, 99.99 percent of which will be invested by Univance and the remaining amount will be provided by private investors. Fumio Sato, now the General Manager of the Univance Thai Project Preparatory Office, will assume the presidency of the new company. Univance (Thailand) will hire some 100 employees. (From an article in the Nikkan Jidosha Shimbun on February 24, 2011)

Indonesia
The Company will expand the plant of P.T. Univance Indonesia, producing manual transmissions in Indonesia. The expansion is aimed at increasing sales in the ASEAN region, where demand growth is well expected, as well as improving cost competitiveness by transferring production operations to the emerging country. Specifically it will build two plant buildings to add approx. 4,000 m2 by the end of this year. (From an article in the Nikkan Jidosha Shimbun on May. 17, 2010)

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

R&D Expenses

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	1,569	1,269	1,536
Ratio in total sales (%)	2.6	2.6	2.5

R&D Structure

-As of Mar. 31, 2011 the number of overall R&D staff is 133, approximately 6.8% of employees within the Group.

R&D Activities

(1)Control-unit Business
Manual Transmissions
-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.

(2)Parts Business
-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)

	FY2010
Overall	1,643
Control-unit Business	921
Parts Business	697

Control-unit Business
-The Company invested to set up new operations and to maintain and renew production facilities.

 Parts Business
-The Company invested to set up new operations and to maintain and renew production facilities.

Plan for Installing New Facilities (FY2011)

 

Segment	Planned amount (in millions of JPY)	Details and objectives
Overall	4,909	-
-Control-unit Business	3,134	Facilities for machine processing and starting new launch
-Parts Business	1,759	Facilities for machine processing and starting new launch