Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change(%)	Factors
Overall
Sales	58,241	218,806	(73.4)	-
Operating income	121	(3,145)	-	-
Ordinary income	(392)	(12,200)	-	-
Net income	(421)	(23,251)	-	-
Parts Business Segment
Sales	46,786	208,257	(77.5)	Sales significantly decreased year-on-year. Some of the sales-related highlights include the following: -vehicle production in Japan started to recover, buoyed by eco-car incentive programs; -the automotive markets in Thailand, China and other emerging markets gradually started to move again, showing signs of recovery; -the Company removed Metaldyne from its consolidated financial statements; and -demand for trucks, construction vehicles, and motorcycles slowed down in the first half of the year.
Operating income	(931)	(3,484)	-	-

Recent Developments Outside Japan

<USA>
-The Company announced that its wholly-owned U.S. subsidiaries, Metaldyne Corporation and its 30 subsidiaries, had filed for bankruptcy protection under Chapter 11 of the U.S. federal bankruptcy laws. Their total liabilities amount to 929 million dollars (approx. 89.6 billion yen). As a result of this filing, the U.S. subsidiary is removed from the consolidated financial statements of the Company. Metaldyne, which is expecting to sell its businesses and assets to new buyers, has already reached a basic agreement with new sponsors. While its corporate activities will continue, no new fund or capital will be provided by the Company. (From an article in the Nikkan Jidosha Shimbun on May 29, 2009)

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Group	315	1,646	3,390
Parts Business	286	1,596	3,217

R&D Structure

-The Company has 21 R&D engineers as of Mar. 2010.

Recent Developments

Parts business

Product	Details
Magnesium die casting	As sales of electric hybrid and fully electric passenger vehicles are expected to increase, the company is working to develop technology to manufacture new components for these vehicles, and in turn establish quality control technology to handle such products. It is also conducting development activities aimed at improving manufacturing methods for, and the quality of, its existing products.
Internal smoothing technology	-The Company has already launched mass-production of intake manifolds for use in passenger vehicles, and cylinder heads for use in motor cycles, using internal smoothing technology that enhances engine performance. It also successfully confirmed that the addition of internal residual stress drastically improves both the durability and strength of materials. The Company is now preparing to to actually apply its new findings in this area, further collecting detailed data.
New Aluminum casting and forging	Cast-aluminum parts are attracting attention as ways to reduce vehicle weight. On the other hand, cast-aluminum parts also have disadvantages in terms cost when compared with iron and in terms of quality when compared with sheet metals. Positioning these drawbacks as key issues, the company is working on developing more cost-efficient casting processes. It is developing technology to effectively control cooling and filling during the melting, forming, and freezing processes of special aluminum alloy. It is doing this so as to improve not only the property of the materials being used but also the molding performance and casting quality. With the aim of producing more high-strength products, the company is also using a deformation processing method to cast materials.
Iron casting	-In order to further expand the number of applications in which hyper ductile iron can be used, the Company designed lighter products. It also developed technology that makes it possible to improve the properties of the materials used, and reduce costs too, in response to its customers' requirements.

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Group	1,104	8,150	13,500
Parts Business	1,050	8,006	13,388

-The focus of the Company's investments in its parts business was on renewing and maintaining equipment to enhance its production efficiency when it comes to manufacturing general auto parts.

Planned Capital Investments

(As of Mar. 31, 2010)

Company Office	Location	Equipment to be installed	Estimated amount of investment (million JPY)	From	To
Techno-Metal Co., Ltd. Nihonmatsu Plant	Fukushima Pref., Japan	Machining equipment	142	Feb. 2010	Oct. 2010