Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of Change(%)	Factors
Overall
Sales	78,224	66,476	17.7	-Sales increased year-on-year because sales at affiliated companies in Asia and North America grew.
Operating income	5,809	2,009	189.1	-Profit increased a result of continued improvements in the Company’s cost structure and as a result of reductions in fixed costs
Ordinary income	7,184	4,002	79.5	-
Current net income	3,859	2,322	66.2	-
Automotive/Industrial Machinery Component Division (excludes transactions among divisions)
Sales	64,415	54,048	19.2	-Sales increased, thanks to a significant increase in sales of mainstay products such as piston rings.
Operating income	4,619	732	531.0	-Profit grew a result of fixed costs being divided and spread over a greater volume of sales; and due to cost-cutting initiatives.

Performance Forecast

(in millions of JPY)

	FY2011 Forecast	FY2010 Result	Rate of Change(%)
Sales	78,000	78,224	(0.3)
Operating income	5,500	5,810	(5.3)
Ordinary income	6,900	7,184	(4.0)
Net income	3,900	3,859	1.1

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Group	1,286	1,086	1,542
Automotive/Industrial Machinery Component	928	765	1,168

R&D Structure

-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 in the Automotive/Industrial Machinery Component Business are conducted by the R&D Department, Piston-ring Technological Development Department, and the product development and production technology sections at each of the manufacturing divisions.

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, 2011)

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, cam shaft, and knuckles	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	10 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	Jan. 1, 2009	5 years
Grede Foundries, Inc.	USA	Manufacturing methods for knuckles and damper forks	Aug. 17, 2010	5 years
		Manufacturing methods for lower control arm	Aug. 17, 2010	5 years
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	12 years
		Manufacturing methods for camshafts	Oct. 1, 2004	7 years
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)

	FY2010	FY2009	FY2008
Group	2,305	2,620	6,292
Automotive/Industrial Machinery Component	1,773	2,326	5,469

Automotive/Industrial Machinery Component Division
-The Company invested in facilities and equipment for processing and surface treating  vane pumps.

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 and auto parts	1,212	Apr. 2011	Mar. 2012	No effect on production capacity
P. T. Pakarti Riken Indonesia Head office plant (Surabaya, Indonesia)	Installing new equipment to produce auto parts	2,298	Mar. 2011	Mar. 2016	Production capacity increased by 50%