Financial overview

(in million yen)	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	55,432	47,376	17.0	Engine parts business Sales to the construction industry continued to be strong in Japan. Sales also increased in the overseas market.   Automotive parts business Since demand to repurchase trucks weakened, following the enforcement of the NOx/ PM law, domestic business slightly decreased compared to what it was last year. Thanks to strong sales overseas, especially in North America, however, revenue at the automotive parts business rose 8.6 percent year-on-year to 25,229 million yen.  Other business Sales were 633 million yen, down 5.4 percent year-on-year.
Operating income	2,968	2,751	7.9	Automotive parts division Despite increased sales, operating income fell 13.5 percent from what it was last year to 1,616 million yen. The decrease was mainly due to greater investment costs incurred for maintaining and increasing sales, and due to soaring materials prices. Other business -Operating income at its other business sectors totaled 120 million yen, a rise of 36.1 percent year-on-year.
Ordinary income	3,012	2,664	13.1	-
Current net income	1,782	1,632	9.2	-

Challenges for FY2007
-To undertake activities that focus mainly on expanding sales of propeller shafts to diverse customer groups. 
-To retain its high level of product quality through further improving its R&D capabilities. 
-To make its products more competitive by implementing continuous cost reduction initiatives.
-To expand business overseas, with a primary focus on the Asian region. etc.

R&D expenses for FY2006 were 432 million yen.

Development structure
Under its partnership with JBK Services, which mainly involves R&D activities, the Company is jointly researching and developing automotive parts used in diverse powertrains.

Part of the activities in advanced technological products are being conducted jointly with Isuzu.

<Engine parts>
R&D expenses for FY2006: 43 million yen.
-Based on support provided by Isuzu to develop improvements in productivity and quality, the Company is operating as a manufacturing facility producing industrial engine assemblies for Isuzu, as well as conducting evaluations on engine performance based on an outsourcing agreement with Isuzu. In addition, due to its expertise in these areas, the Company is being assigned by automakers to conduct engine performance evaluations.
-The Company is carrying out development on valve parts, winning new supply agreements from automakers that are first-time customers for the Company.

<Automotive parts>
R&D expense for FY2006: 389 million yen
- Development was carried out both on various propeller shafts for pickup truck transmissions to increase higher torque output and on various power takeoffs designed to match the type of body, as well as cam gears, flywheels and flex plates.

- Because the Company has promoted their business to receive awards from automobile makers which with they never had business together in the past, it has been developing large and small propeller shafts to suit the needs of new customers.

Technology import (as of March 2007)

Licensed technology	Licenser	Contract term
Manufacturing technologies for no-spin differentials	Eaton Corporation (U.S.A.)	Apr.16, 2006-Apr.15, 2009

Capital investment for FY 2006 was 1,675 million JPY.

Engine parts business:
Investment at the engine parts business totaled 430 million yen, which was focused on increasing capacity to manufacture parts used in industrial machinery engines. 

Automotive parts division:
Investment at the automotive components division reached 1,244 million yen. Spending was focused on preparing production lines to support a new rocker arm contract for trucks, and improving the quality and efficiency of its production lines manufacturing propeller shafts. 

New facilities (Automotive parts business)

Name	Type of facility	Planned total  investment (in million yen)	Construction start month	Planned completion month
Head Office/ Ebina Plant (Kanagawa Pref., Japan)	Processing equipment for power transmission parts, etc.	1,658	Apr., 2007	Mar., 2008
	Processing equipment for power transmission parts, etc.	397	Apr., 2007	Mar., 2008
Mooka Plant (Tochigi Pref., Japan)	Processing equipment for engine parts, etc.	431	Apr., 2007	Mar., 2008
P.T. Jibuhin Bakrie Indonesia  (Karawan, Indonesia)	Processing equipment for engine parts, etc.	64	Apr., 2007	Mar., 2008
Jibuhin (Thailand) Co., Ltd. (Chonburi, Thailand)	Processing equipment for power transmission parts, etc.	404	Apr., 2007	Mar., 2008