Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	63,451	51,143	24.1	-
Operating income	7,713	251	2,972.9	-Performance increased as a result of consolidating and reorganizing production operations, improving productivity, enhancing efficiencies at facilities, and reducing fixed costs, especially.
Ordinary income	6,714	(643)	-
Current net income	8,123	(1,922)	-
Automotive Bearings
Sales	51,418	39,418	30.4	-The reduction in production volume of automobiles in Japan was offset by the increase in export volume. -Performance improved year-on-year due to the increase in unit-production volume worldwide, spearheaded by the Asian region; the Company’s winning new program business in Europe; and the recovery in demand in the U.S. market.
Operation income	9,086	1,971	361.0

Restructuring

-The Company announced that it dissolved and liquidated two consolidated subsidiaries in the U.S.A. on September 30, 2010. The two companies are Daido Metal America Corp., a holding company; and Daido Metal Bellefontaine LLC, a manufacturer of automotive bearings. (From a press release on October 1, 2010)

Supply Agreements

-The Company won new program business from Volkswagen for bearings designed for lead-free engines, and began supplying them.

Outlook for FY2011

(in millions of JPY)

	FY2011 Forecast	FY2010 Result	Rate of Change(%)
Sales	68,000	63,451	7.2
Operating income	8,800	7,713	14.1
Ordinary income	8,300	6,714	23.6
Net income	4,450	8,123	(45.2)

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	1,128	1,069	1,275

R&D Structure

-R&D activities are conducted by three functions, namely the Central R&D Center, the Production Technology Department, and the Tribo Group's Main R&D Department.

-As of March 31, 2011, the Company had 75 researchers.

R&D Results

Developing copper-alloy bearings with lead-free overlays
-The Company developed bearings with bismuth-based overlays and copper alloys that perform even better than current lead-based or lead-containing copper alloys, meeting European lead regulations. The Company started producing some of these.

R&D on new production methods of half-bearings
-Aiming to reduce costs by one-third, the Company conducted R&D activities on machining and processing lines for new-type half-bearings to be produced under new production methods using new technology. The Company is creating a new production line based on the results.

Developing resin-based, heat-resistant bearing materials
-The Company developed dead-weight/static-load bearings, using PEEK resin. These bearings, which have improved performance in terms of lower friction and wear, are starting to be produced.

Developing sliding (slide) bearings with improved friction wear under dynamic loads
-The Company developed a program to analyze the friction wear of slide bearings spinning under dynamic loads.

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Automotive Bearings	2,763	2,943	8,660
-Facilities specialized in processing	1,832	1,076	6,032
-Production facilities producing bimetal	589	1,190	401

Investments

Facility	Outlines
Automotive Bearings
-Facilities specialized in processing	-The Company made capital investments to reorganize its production structure in Japan, mainly investing in Daido Plain Bearings Co., Ltd. and NDC Co., Ltd. -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
Inuyama Plant (Aichi Pref., Japan)	Facility to produce half-bearings	194	Oct. 2008	Jun. 2011	About 5% increase in half metal production capacity
		232	Apr. 2011	Nov. 2011	About 45% increase in half metal production capacity
Bi-metal production plant (Aichi Pref., Japan)	Facility to produce bi-metals (materials used for bearings)	1,500	Jan. 2008	Oct. 2012	About 5% increase in bi-metal (bearing material) production capacity
		295	Oct. 2008	Oct. 2011	About 8% increase in bi-metal (bearing material) production capacity
		268	July 2010	July 2012	About 2.5% increase in bi-metal (bearing material) production capacity
Daido Plain Bearings Co., Ltd. (Gifu Pref., Japan)	Facility to produce half-bearings	196	Sep. 2010	Apr. 2011	About 2.5% increase in half metal production capacity
		196	Sep. 2010	May 2011	About 2.5% increase in half metal production capacity
DYNA METAL CO., LTD. (Chachoengsao, Thailand)	Facility to produce half-bearings	270	May 2011	Mar. 2012	About 17% increase in half metal production capacity
	Plant facility	364	Jan. 2011	Dec. 2011	Build 6,955㎡ more of additional production space
Daido Metal Russia LLC	Facility to produce half-bearings	287	Oct. 2009	Apr. 2011	Migrate production operations (No production capacity increase)