Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change (%)	Factors
Overall
Sales	51,143	60,572	(15.6)	-Although the benefits of the Company’s survival plan (see blow) started to take effect, sales were down in FY2009.
Operating income	251	(380)	-	-Income improved by closing a plant in the U.S., consolidating production operations at Daido Plain Bearing, integrating sales offices at home and abroad, reducing capital investment, and making better use of idle facilities.
Ordinary income	(643)	(1,963)	-
Current net income	(1,922)	(4,764)	-	-The Company reported a special loss, which reduced net income.
Bearing metal for automobiles
Sales	39,091	45,674	-	-Income decreased on the whole during FY2009, in despite of a recovery in global demand for passenger cars in the latter half of the year and the Company's winning supply agreements outside Japan.

Survival Plan

1. The Company and its affiliated companies will reduce investment in plants and equipment, and loan financing and debt with interest in order to improve their financial positions.
2. The Company will revamp its global production network, ensuring that production remains consistent with actual demand. It will also integrate both sales offices and distribution centers, improve productivity and the use of facilities, and improve its cost structure by radically reducing fixed costs, for example.
3. The Company will escalate activities to win larger orders for lead-free bearings demonstrating high-tech performance in the automotive market outside Japan, mainly in Europe.

Highlights by Region

<Japan>
-Sales decreased 19.0% year-on-year to 44,286 million yen, but operating income increased 6.2% to 1,259 million yen, reflecting the recovery in global demand for passenger cars and the Company’s successful activities to win orders outside Japan.

<North America>

-Sales decreased 33.6% year-on-year to 3,512 million yen, with the Company posting an operating loss of 701 million yen, because Daido Metal Bellefontaine L.L.C. discontinued its production and sales activities.

<Asia>
-Sales decreased 1.6% to 6,096 million yen and operating income 26.2% to 339 million yen, although the Asian economy is recovering, thanks to the growing market in China and successful economic stimulus initiatives implemented in several countries in Asia.

<Europe>
-Sales decreased 4.7% to 4,465 million yen, with the Company posting an operating loss of 642 million yen, due to sluggish automotive demand.

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

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,069	1,275	1,306

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, 2010, the Company had 70 researchers.

R&D Results

-Development of lead-free aluminum alloy bearings with overlay.
-Research on new methods for making half metals.

Technology Assistance Contract

(As of Mar. 31, 2010)

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 millions of JPY)

	FY2009	FY2008	FY2007
Bearing metal for automobiles	2,943	8,660	7,163
-Facilities specialized in processing	1,076	6,032	4,451
-Production facilities producing bimetal	1,190	401	509

Investments

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.

-Daido Metal Bellefontaine L.L.C., which has already discontinued production activities, moved its manufacturing facilities to Daido Metal Czech s.r.o.

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
(Aichi Pref., Japan)Bi-metal production plant	To add a bearing material production line	268	Jul. 2010	Jul. 2012	About 8% increase in half metal production capacity