Highlights in FY2007 (ended Mar. 2008)

(in million JPY )	FY2007	FY2006	Rate of change	Factors
Overall
Sales	4,049,818	3,855,745	5.0%	Sales increased in its business areas of Energy and Electric Systems; Industrial Automation Systems; Electronic Devices; Home Appliances; and Other Products.
Operating income	267,205	233,002	14.7%	-
Net income	157,977	123,080	28.4%	-
Industrial automation systems division
Sales	1,017,503	956,930	6.3%	Thanks to strong performance by Japanese automakers in terms of global production volume, both orders and sales increased.
Operating income	129,257	126,227	2.4%	-

Business Strategy (announced in May, 2008)

-The Automotive Equipment Group will enhance its business in the areas of car multimedia, ETC, and other products.

-It will strengthen production operations in North America, Middle and Eastern Europe, Russia, Brazil and Asia (Thailand, Indonesia, the Philippines and India).

-Especially in Japan, it plans to strengthen production operations that manufacture alternators, starters, and other products.

-In Thailand, it will strengthen its eco-car business.

Financial targets

-The Company targets building a strong combination of electric and electronic businesses, making the best use of the synergy effects created.
-In the fiscal year that ended in March 2008, the Company achieved all its business goals.

-	Target	FY2007	Remarks
Operating profit ratio	More than 5%	6.6% (the target was met)	FY2004 : 3.5% FY2005 : F4.4% FY2006 : 6.0% (the target was met)
ROE (Return on equity)	More than 10%	15.1% (the target was met)	FY2004 : 10.8% (the target was met) FY2005 : 11.5% (the target was met) FY2006 : 12.3% (the target was met)
Ratio of debts payable	Less than 15%(*)	15.8% (the target was met)	FY2004 : 23.9% FY2005 : 20.9% FY2006 : 18.6% (the target was met)

* In April 2007, the target was raised from "less than 20%."

R&D Structure

- The Company conducts its development activities, which include areas from basic research, application research, product planning, up to production engineering at its research centers in Japan, the U.S., and Europe, and in addition, at the development divisions at its plants and consolidated subsidiaries. It also carries out joint development activities with universities and research organizations at home and abroad.

- The Industrial Automation Systems Division focuses its development activities in the areas of automotive electric equipment, electric power steering systems and related products, and car multimedia products. 

R&D facilities in Japan (Automotive business)

Facility	Location	Remarks
Automotive Electronics Development Center	Himeji, Hyogo Pref.	Application research
Himeji works	Himeji, Hyogo Pref.	Product development
Sanda works	Sanda, Hyogo Pref.	Product development
Fukuyama works	Fukuyama, Hiroshima Pref.	Product development

R&D expenses

(in billion JPY)	FY2007	FY2006
Overall	148.7	132.7
Industrial automation systems	37.0	28.2
%	24.9%	21.3%

R&D Activities (FY2007)

-The Company developed new-generation (9G) alternators, EPS systems with high-output brushes, and technology for on-board receivers capable of receiving digital broadcasts.

Capital Expenditure

(in million JPY)	FY2007	FY2006
Overall	159,370	153,423
Industrial automation systems	50,230	43,358
%	31.5%	28.3%

The Industrial Automation Systems Division focused its investment activities on increasing production of automotive equipment, and on factory automation systems.

Capital investment projects for FY2008

(in million JPY)	FY2008
Overall	170,000
Industrial automation systems	50,500
%	29.7%

The Industrial Automation Systems Division will continue its investment focus on expanding production at the Automotive Equipment Group and the Factory Automation Systems Group.