Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change(%)	Factors
Overall
Sales	66,476	80,909	(17.8)	-
Operating income	2,009	245	720.0	-
Ordinary income	4,002	482	730.3	-
Current net income	2,322	(1,118)	-	-
Automotive/Industrial Machinery Component Division (excludes transactions among divisions)
Sales	54,801	67,627	(19.0)	-Orders declined because vehicle production had not yet been fully recovered.
Operating income	730	(1,377)	-	-

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

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Group	1,086	1,542	1,576
Automotive/Industrial Machinery Component	765	1,168	1,393

R&D Structure

-The R&D Division, Ring Technology Development Division, and Product Development and Engineering Technology sections under each manufacturing division, are in charge of the Company's R&D activities.

-The Next-Generation Product Planning Division inaugurated its planning activities with the aim of creating new products in areas with high growth potential such as hybrid and electric vehicles.

R&D Activities

-Automotive/Industrial Machinery Component
1. Low friction and long-lasting gasoline-engine piston rings that lower fuel consumption
2. Diesel engine piston rings to meet requirements for low fuel consumption and emission regulations.
3. Valve parts, transmission sealing rings
4. Various surface treatment technology that enables a high degree of high sliding performance
5. Light- weight and high-strength chassis parts

Licensing of technology to other companies

(As of Mar. 31, 2010)

Company name	Country	Contract	Contract date	Contract period
Taiwan Riken Ind. Co., Ltd.	Taiwan	Manufacturing methods for various forged steel engine components such as piston rings, cylinder liners, blocks and pistons	Aug. 22, 2005	Terms for extending the agreement are subject to negotiation
Siam Riken Ind. Co., Ltd.	Thailand	Manufacturing methods for piston rings and other forged steel engine components	Apr. 19, 2009	5 years
P. T. Pakarti Riken Indonesia	Indonesia	Manufacturing methods for joint and forged parts	Jan. 1, 2006	5 years
Shriram Pistons & Rings Ltd.	India	Manufacturing methods for piston rings	Mar. 1, 2007	7 years
Allied Ring Corp.	USA	Manufacturing methods for piston rings	Sep. 1, 1989	5 years
Grede Foundries, Inc.	USA	Manufacturing methods for ductile forged components	Jul. 17, 2005	by July 16, 2007
		Manufacturing methods for lower control arm	Jul. 23, 2001	8 years from the start of delivery of mass produced products
		Manufacturing methods for Sheet parts	Sep. 16, 2003	8 years from the start of delivery of mass produced products
Korea Piston Ring Inc.	Korea	Manufacturing methods for piston rings	Mar. 1, 2010	5 years
Xiamen Riken Ind. Co., Ltd.	China	Manufacturing methods for piston rings	Aug. 1, 1999	by July 31, 2010
		Manufacturing methods for camshafts	Oct. 1, 2004	by Sep. 30, 2010
Riken Automobile Parts (Wuhan) Co., Ltd.	China	Manufacturing methods for piston rings, seal rings, valves and other cast iron products.	Mar. 1, 2005	10 years

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Group	2,620	6,292	7,208
Automotive/Industrial Machinery Component	2,326	5,469	6,334

Automotive/Industrial Machinery Component Division
-Investments were made in equipment for research and development related to engine testing and for increasing production of valve lifters.

Planned Capital Investment

(As of Mar. 31, 2010)

Company Office (Location)	Purpose	Planned investment amount (in millions of JPY)	Starting	Estimated completion	Production capacity increase upon completion
New addition
Kashiwazaki Plant (Niigata Prefecture, Japan)	Installing production facilities for making piston rings	450	Apr. 2010	Oct. 2011	No effect on production capacity
P. T. Pakarti Riken Indonesia Head office plant (Surabaya, Indonesia)	Installing new equipment to produce auto parts	620	Apr. 2010	Oct. 2011	Production capacity increased by 25%
Refurbishment
Kashiwazaki Plant (Niigata Prefecture, Japan)	Installing production equipment to manufacture piston rings and other automotive components	250	Apr. 2010	Oct. 2011	No effect on production capacity
P. T. Pakarti Riken Indonesia Head office plant (Surabaya, Indonesia)	Installing new equipment to produce auto parts	300	Apr. 2010	Oct. 2011	No effect on production capacity