Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of change (%)	Factors
Sales	92,032	72,839	26.3	-
Operating income	7,022	5,264	33.4	-
Ordinary income	7,007	4,618	51.7	-
Current net income	4,507	2,740	64.5	-

New Company

-The Company announced that it will set up a new company, tentatively named "Hitachi Storage Battery (Thailand) Co., Ltd.", in Thailand. The unit will produce and supply automotive storage batteries for environmentally-friendly, fuel-efficient gasoline-powered cars and the vehicles intended for emerging markets. The new subsidiary is due to be established in August 2010 with a capital of approximately one billion yen to be invested entirely by Shin-Kobe Electric. Manufacturing operations will start in April 2012. (From a press release on May 27, 2010)

Sales by Segment （in millions of JPY）

	FY2010
	Sales	Operating income
Batteries and electrical equipment	57,177	4,645
Capacitor	15,244	775
Synthetic resin products	19,611	1,584

1.Battery and Electric Equipment Division
Automotive Batteries Division
-Aftermarket: The Company experienced strong sales of batteries with high value-added features, selling its Tuflong ECO model designed for power-controlled cars; and its Tuflong Mini, which was launched in the 3rd quarter and designed for compact cars.
-OEM: The Company experienced strong sales due to the greater volume of new cars produced as a result of eco-car sales incentives and tax reductions; greater sales of eco-cars equipped with idling stop function; and more product installations on alternator regeneration vehicles.

2.Capacitor Division
Others
-While sales of film condensers for automotive use increased and sales of new types of capacitors designed for construction equipment and alternative/new-energy cars grew, there was a drop in sales of evaporated products because of lower demand in the food packaging sector.   

3.Synthetic Resin Products Division
Mold
-Sales of both thermoplastic and thermosetting resin products increased year-on-year because of the strong production volume of new cars in the first half of the year, even though demand dropped after the sales incentives for new eco-cars ended in September.  
 
Seat products
-Sales of automotive seats increased as a result of winning program business from new customers.

Laminates and shielded board
-Sales were lower year-on-year because of the shrinking semi-conductor market and the waning demand for new cars after the eco-car sales incentives ended.

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

Performance Forecast

(in millions of JPY)）

	FY2011 Forecast	FY2010 Result	Rate of Change (%)
Sales	92,000	92,032	(0.0)
Operating income	7,000	7,022	(0.3)
Ordinary income	6,700	7,007	(4.4)
Net income	4,200	4,507	(6.8)

R&D Expenditure

( in millions of JPY )

	FY2010	FY2009	FY2008
R&D expenses (in millions of Yen)	2,893	2,525	1,819
Numbers of researchers (persons)	223	218	185
Industrial property rights (items)	809	751	769

R&D Structure

-The Company promoted the development of cutting-edge high technologies, which were essential to developing new advanced products, in close cooperation with R&D divisions of the Hitachi Group companies such as Hitachi, Ltd. and Hitachi Chemical Co., Ltd.

R&D Activities

Batteries and Electrical Equipment
-The Company's research and development expenditure for products such as batteries and electrical equipment was 1 billion, 667 million yen.
-Focusing on lead-acid batteries and lithium-ion batteries, the Company developed new products that are capable of meeting needs in automotive battery aftermarket as well as responding to the next new systems for automobiles and new industrial uses at its Batteries Research and Development Center, Industrial Lithium-ion Batteries Development Center, and Hitachi Vehicle Energy, Ltd.  
-The Company developed the following new products: batteries (Tuflong Eco IS) for vehicles equipped with idling-stop systems, batteries (Tuflong Mini) designed for compact cars, and large-sized cylindrical lithium ion capacitors.

-The Company has developed a large-size cylindrical lithium-ion capacitor, which provides an optimal power storage device for a wide variety of applications ranging from hybrid construction machinery to power source in case of an instantaneous voltage sag, automatic conveyor vehicle, auxiliary power source for automatic stop-start mechanism and power regeneration. Conventional lithium-ion capacitors have been limited to a laminated type made of plates or a small-size cylindrical type. More sturdy, higher durability, large-size cylindrical products that can be used under severer operating conditions have been wanted. The Company is going to launch such products with output increased by 50 percent and with energy heightened by more than 70 percent during the second quarter of 2011. Furthermore, the company is planning to boost monthly production capacity from several thousand cells to tens of thousand cells by fiscal 2012. (From a press release on February 3, 2011)

<Capacitor>
-The Company's research and development expenditure for capacitor was 245 million yen. 
-At its Haga and Shinmachi plants, Hitachi AIC conducted R&D activities on power electronics products, making use of features designed to respond to high voltage and high current. It also worked to design products that are smaller in size but larger in terms of capacity.
-New products developed were a large-size, snap-in, aluminum electrolyte condenser, and a metal-case-shaped film condenser.

<Synthetic Resin Products>
-The Company's research and development expenditure for synthetic resin was 979 million yen.
-The plastic R&D center and the development center at Hikone Works lead R&D activities to develop products which are aimed to launch in the near future, further toward market launch where technological innovation proceeds very rapidly in short period. Examples of these products are laminates, molds and seat products.

Technology Licensing-in Agreement

(As of Mar. 31, 2011)

Partner	Country	Content of contract	Contract Period
Panasonic Storage Battery Co., Ltd.	Japan	Obtained the rights for both the patent and the execution of  technological expertise in the field of lead-acid batteries	July 1, 2004 through June 30, 2014

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	6,057	2,975	3,908

-The Company invested 4,026 million yen in its Battery and Battery Equipment business. The money was spent to increase production volume of both commercial-use lithium ion batteries and commercial-use lead-acid batteries for new energy sources, and to augment the facilities and equipment at its Thai subsidiary.

-The Company invested 324 million yen in its Condenser business to increase production of aluminum electrolyte condensers.

-The Company spent 1,522 million yen to increase production of next-generation compound electric molded products.

New Equipment Installations

Company name Site name	Equipment to be introduced	Estimated amount of investment (million JPY)	Start	Planned completion
Hikone Works And Nabari Works （Shiga Pref., Japan and  Mie Pref., Japan）	Facilities for producing industrial-use lithium ion batteries	1,342	Apr. 2010	Jun. 2011
Saitama Works （Tochigi Pref., Japan）*	Facilities for producing lithium ion capacitors.	635	Mar. 2011	Jan. 2012
Hitachi Storage Battery (Thailand) Co., Ltd. （Chachoengsao, Thailand）	Facilities for producing batteries	1,980	Aug. 2010	Aug. 2011

*The Company plans to set up a plant in Haga at Hitach AIC located in Moka, Tochigi Prefecture, which will be administered by the Saitama Offices.