Financial Overview

(in million JPY)

	FY2008	FY2007	Rate of change (%)	Factors
Overall
Sales	60,572	68,062	(11.0)	Sales decreased as a result of the decline in production volume in the automotive industry worldwide, the main business sector for the company. This was due to poor sales and the need for automakers to adjust their inventory levels. There were also substantial decreases in the volume of automobiles exported and in the production volume of medium-duty trucks in Japan, which impacted sales.
Operating income	(380)	868	-	In addition to decreased sales in the automotive business, there were also significant price increases for the main raw materials the company uses;increases in depreciation cost, and temporary expenses incurred as a result of the company consolidating its production facilities, which all  adversely affected the Company's income.
Ordinary income	(1,963)	340	-
Current net income	(4,764)	(2,063)	-	Current net income decreased because the Company recorded an extraordinary loss incurred from liquidating US production facility, Daido Metal Bellefontaine LLC.
Bearing metal for automobiles
Sales	45,674	53,968	(15.4)	Sales decreased as a result of decreased vehicle production due to poor sales and automakers' worldwide adjusting their inventory levels.

Restructuring of business

-Japan

Since July 2006, the Company was engaged in consolidating its production operations (for bearings) into the Seki Plant of Daido Plane Bearing Co., Ltd, located in Gifu Prefecture. The Company undertook this initiative in order to improve its production efficiency and achieve the maximum benefits possible from consolidating its operations. Subsequently, it closed its Tokyo Plant in March and its Saitama Plant in September 2008, and completed the consolidation project as planned.  

-USA

The Company announced plans to liquidate its wholly-owned US subsidiary Daido Metal Bellefontaine L.L.C.(DMB) due to the drastic plunge in US auto sales. DMB engages in the manufacturing and sale of bearings and bearing metal for automobiles. The production at DMB will be halted around June 2009 and the liquidation procedures will be completed by the end of December 2009. Daido Metal America Corp.(DMAC), US holding company that oversees DMB operations, will also be dissolved. (From a press release on Feb 6, 2009)

R&D Structure

-R&D activities are carried out by the following four divisions: Central Laboratory, Production Promotion Office, Company No.1 Development Office, Company No.3 Development Office.

-As of March 31, 2009, the Company has 79 researchers.

R&D Expense

(in million JPY)

	FY2008	FY2007	FY2006
Amount	1,275	1,306	1,314

R&D Results (for FY2008, which ended March 31, 2009)

-Development of low-friction bearings, being conducted by the automotive bearing metal business.

The Company reduced the level of friction in bearings by treating their surfaces with a solid, lubricated material using a special technology. In addition, the Company developed products capable of improving fuel efficiency, launching mass production and supplying them to customers.

Technology Assistance Contract (As of Mar. 2009)

Partner (Country)	Technology	Contract	Contract Period
Bimetal Bearings Limited (India)	Manufacturing technology for bearing metal	1.Provision of technological information and know-how 2.Licensing of industrial property rights	Feb. 7, 2008 - Feb. 6, 2011

Capital Expenditure

(in million JPY)

-	FY2008	FY2007	FY2006
Bearing metal for automobiles	8,660	7,163	9,231
-Facilities specialized in processing	6,032	4,451	3,749
-Production facilities producing bimetal	401	509	901

Investments (FY2008)

Facility	Outlines
Bearing metal for automobiles
-Facilities specialized in processing	-The Company invested to reorganize its domestic production structure, mainly at its subsidiary, Daido Plain Bearing (DPB). -At its consolidated subsidiaries outside Japan, the Company made capital investments to enhance their production capacity, focusing on its American and European facilities.
-Production facilities producing bimetal	-The Company supplies most of the bimetal used at its production facilities in Japan and overseas. To meet the growing needs for bimetal, the Company invested in facilities of its own to expand its production capacity as quickly as possible.

New equipment installations (Bearing metal for automobiles business)

Name (Location)	Purpose of Equipment Installation	Estimated amount (in million JPY)	From	To	Capacity increase on completion
The Company
Company No.1 Inuyama Plant (Aichi Pref., Japan)	To add manufacturing equipment to produce half metal	194	Oct. 2008	Sep. 2009	About 5% increase in half metal production capacity
	To add manufacturing equipment to produce half metal	290	Apr. 2008	Dec. 2009	About 5% increase in half metal production capacity
Bi-metal production plant (Aichi Pref., Japan)	To add a bearing material production line	2,300	Oct. 2008	Nov. 2009	About 8% increase in bearing material production capacity
	To add a bearing material production line	1,500	Jan. 2008	Dec. 2009	About 5% increase in bearing material production capacity
	To add a bearing material production line	295	Oct. 2008	Nov. 2009	About 5% increase in bearing material production capacity
Daido Plane Bearing Co., Ltd.
Seki Plant (Gifu Pref., Japan)	Plant building	1,079	Jun. 2008	Jun. 2009	No change