Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of Change (%)	Factors
Overall
Sales	62,447	50,964	22.5	-
Operating Profit	5,807	1,166	398.0	-
Ordinary profit	5,637	564	899.5	-
Net profit	2,921	(927)	-	-
Automotive Components Division
Sales	44,552	37,163	19.9	1)
Operating profit	3,898	458	751.1	-

Factors
1)
<Japan>
-New car sales in Japan decreased following the termination of the eco-car subsidy programs in the fall of 2010. The decrease, however, had no significant impact either on automakers production volumes, which were supported by strong exports, or on the company’s domestic sales.

<China>
-Sales and local production continued to grow in China.

Contracts

-The Company is expecting to win a program to supply its smart key technology to Mitsubishi Motors Corporation. The motor-driven electric steering lock system is likely to be featured on the new RVR, which is coming to the market in the spring of 2011. The Company is now set to expand business with Mitsubishi, leveraging this first electric lock program with the automaker. Mitsubishi, the Company aims to expand business with the automaker. (From an article in the Nikkan Jidosha Shimbun on Dec. 7, 2009)

-The Company was awarded the first order from Nissan. Key sets for passenger cars Nissan produces at its joint venture in China will begin to be delivered in summer 2011. In line with stable growth in its China operation, the Company plans to relocate its manufacturing site in Zhongshan, Guangdong and renovate the facility to double its annual production capacity by the end of 2011. It has recently decided the new location and completed procurement of the land. While it has hitherto produced components of air conditioning and other systems for Nissan, the Company has been conducting the business only as an indirect Tier-2 supplier. (From an article in the Nikkan Jidosha Shimbun on Jul. 14, 2010)

-The Company has won a new contract from Volkswagen to supply key sets for installation in vehicles assembled in Mexico. This is the first time for the Company to win business from Volkswagen in a country other than the U.S. within the NAFTA trade bloc. The key sets will be produced at the Company's Thai facility as in the case of those supplied to Volkswagen of America, and delivery is scheduled to begin in the middle of 2012. Following its achievements in North America, the locking supplier is now going to aim at the automaker's plants in China as the next target. It believes that dealing with one of the world's largest car manufacturers in major markets will help the Company strengthen its business structure and improve profitability. (From an article in the Nikkan Jidosha Shimbun on July. 28, 2010)

Business Restructuring

-The Company is stepping up a policy of supplying components from its most competitive global production source. It will seek optimal allocation of production volume and types of components at each production site by fully utilizing its global production network covering Japan, the U.S., Europe and Asia, with the aim of winning a firm competitive edge in cost. For this purpose, the Company is set to establish a complementary global production scheme that allows a flexible transfer of a production item from one plant to another in accordance with fluctuations of the currency and other factors so that a component or a unit produced at emerging countries can be supplied in a timely manner to developed markets like Europe, the U.S. and Japan. This global complementary supply policy will commence with production of the whole volume of key sets at the Thai plant for supply to the new U.S. plant of Volkswagen starting 2011. (From an article in the Nikkan Jidosha Shimbun on Apr. 9, 2010)

Recent Developments Outside Japan

-The Company is stepping up efforts to win business contracts with new customers in North America. The new car demand in the local market, which has plummeted since the financial crisis, is beginning to turnaround and showing a sign of sustainable recovery in the midterm perspective. With the aim of meeting reviving demand all carmakers are turning aggressively to new car development activities that have been temporarily frozen. The Company is poised to take advantage of this opportunity to make technological presentations in an attempt to expand its customer base, targeting such carmakers as GM, Fiat-group Chrysler and Nissan that have plants in North America. (From an article in the Nikkan Jidosha Shimbun on June. 4, 2010)

Outlook

-Building on the success of its winning programs from BMW, Volkswagen and Audi, the Company’s Hungarian operation will work on expanding business with European automakers.

-In China, the Company will move ahead with its plan to build a second plant to boost its local production capacity.

-The Company’s Thai subsidiary functions as an important supply hub for key sets and heater control panels to both the ASEAN market and Japan. The subsidiary has started constructing its second production facility to support Suzuki Motor’s planned new assembly plant in the country. In addition to expanding the Company’s production capacity, the second plant will expand the facility’s product lineup by making door latches on its new stamping line. The Company will thereafter proceed with is plan to transfer production from Japan to Thailand, accelerating its initiatives to further cut down on its production cost.

-In the year ended in November 2010, the U.S. operation continued to post a deficit, although it had been profitable until 2008. The Company is anticipating a tough situation until after the beginning of 2011, when it will start producing key sets for Volkswagen. Having positioned North America as one of its most important markets, the Company intends to further increase business with Japanese, European and U.S. automakers operating in the country.

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall (million yen)	1,624	1,414	1,591
Ratio to sales (%)	2.6	2.8%	2.0
Personnel	203	208	165

R&D Structure

-The Company has established an R&D division at U-shin Manufacturing (Zhongshan) Co., Ltd. in Guangdong Province, China in a bid to win more orders from local Chinese automakers. With an initial workforce of 14 people, the new unit already started part of its operations at the beginning of 2010. The R&D division has become the Group's first development hub outside Japan, and the Company plans to increase the headcount of the operation in steps. In order to engineer and manufacture vehicle components that meet strict cost requirements from Chinese car OEMs, the Company decided it was crucial to localize its development function for the market. The R&D team is also responsible for the procurement of parts and materials. This is in line with the Company's strategy to optimize product specifications targeting the Chinese market and procure all parts and materials from locally based suppliers. (From an article in the Nikkan Jidosha Shimbun on March. 30, 2010)

-In April 2010, the Company established three new R&D centers in China, Germany and the U.S.A. Engineers at these facilities are working closely with the Company’s development division in Japan to enhance support for production and sales operations.

Product Development

Electric steering lock systems
-The Company developed the world’s smallest, electric steering lock system in response to increased requirements for compact and lightweight products. The new technology, which combines electronic technology with the company’s proprietary steering lock systems, offers high levels of safety and security as well as low noise operation. 

Heater control units
-The Company continues to develop and propose more advanced mechanical heater control units, demand for which is increasing in line with the auto industry’s shifting to smaller vehicles.

Door latches
-The Company is presenting comprehensive door opening and closing devices, which include door handles and latches, while working on making them more compact, lightweight and cost efficient.

Licensing of Technology from Other Companies

(As of Nov. 30, 2010)

To	Country	Contents	Period of Contract
Elitech Technology Co., Ltd.	Taiwan	Consent to execute industrial property rights and know-how related to automotive key sets.	June 13, 2003 to end of production and sales
Magna Donnelly Corporation	USA	Manufacturing technology and information related to exterior handles for automobiles.	Feb. 1, 2002 to end of production and sales
San Long Industrial Co., Ltd.	Taiwan	Manufacturing technology and information related to outer handles for automobiles.	Oct. 31, 2003 to end of production and sales
San Long Industrial Co., Ltd.	Taiwan	Manufacturing technology and information related to outer handles and inner handles for automobiles.	Feb.1, 2005 to end of production and sales
Xinchang Machinery Co., Ltd.	Taiwan	Manufacturing technology and information related to latch for automobiles.	Jun. 30, 2006 to end of production and sales

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	1,759	1,572	3,065
Automotive Components Div.	1,590	1,333	2,861

-The Automotive Components Division focused its investment activities on installing new production equipment including dies and machinery.

New Investment Plan (Automotive Components Division)

(As of Nov. 30, 2010)

Name of Company/Plant	Location	Equipment	Estimated amount of Investment (in million yen)	Project Period
				From	To
Technical Center	Aki-gun, Hiroshima Pref.	Testing equipment for R&D divisions	276	2010.11	2011.11
Hiroshima Production	Aki-gun, Hiroshima Pref.	Preparing new dies and equipment to manufacture products for new vehicle models, and constructing a new factory	6,186	2010.11	2011.11
Hamamatsu Production	Hamamatsu City, Shizuoka Pref.	Dies and assembly lines to handle changes being made to vehicle models; and machining equipment	455	2010.11	2011.11
Yamato Seiko Co., Ltd.	Higashihiroshima City, Hiroshima Pref.	Dies and assembly lines to handle changes being made to vehicle models; and machining equipment	316	2010.11	2011.11
U-Shin Manufacturing (Zhongshan) Co., Ltd.	Guangdong, China	Preparing new dies and equipment to manufacture products for new vehicle models, and constructing a new factory	1,956	2010.11	2011.11
U-Shin (Thailand) Co., Ltd.	Rayong, Thailand	Preparing new dies and equipment to manufacture products for new vehicle models, and constructing a new factory	1,507	2010.11	2011.11
U-Shin Europe Ltd.	Kisber, Hungary	Dies and assembly lines to handle changes being made to vehicle models; and machining equipment	171	2010.11	2011.11