Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Overall
Sales	43,990	51,922	(15.3)	-
Operating income	1,974	1,818	8.6	-
Ordinary income	2,842	2,245	26.6	-
Current net income	1,682	1,103	52.4	-
Automotive related product business
Sales	35,370	38,422	(7.9)	-In the first half of the fiscal year, same-period sales compared with the first half of FY2008 dropped by more than 30%. In the latter half, auto manufacturers were able to reduce their inventories due to a recovery in exports to emerging countries, leading to an increase in orders for the Company's products to almost 80% of what they were at their peak. But on the whole, the Company’s yearly sales declined because the impact of the slump in the first half was too big to offset the growth experienced during the second half.
Operating income	2,051	1,059	93.7	-

Recent Developments Outside Japan

<China>
-The Company said that it will turn Anqing TP Goetze Liner Co., Ltd. that produces cylinder liners in Anhui Province in China into a consolidated subsidiary. At the initiative of the Company, the subsidiary will strengthen its capabilities in technologies and operations to expand the scope of its business. (From an article in the Nikkan Jidosha Shimbun on Aug. 5, 2009)

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

Outlook for FY2010

(in millions of JPY)

	FY2010 (forecast)	FY2009 (actual)	Year-on-year Fluctuation
Sales	50,700	43,990	6,710
Operating income	4,400	1,974	2,426
Ordinary income	5,100	2,842	2,258
Net income	2,700	1,682	1,018

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	1,841	1,871	1,771

R&D Activities

Automotive product business
<Powertrain components>
Piston rings
-Development of super low friction rings (to improve power output and fuel economy)
-Development of thin, highly-functional oil rings (to improve durability)
-Creation of a production line that reduces the production costs of piston rings (to reduce costs)

Cylinder liners
-The market launch of liners for small engines. These liners are smaller in diameter, have supper thin walls, are lightweight, and have superior heat-conducting properties, enabling them to respond to the needs for greater output and improved fuel consumption.

Valve seats
-The market launch of valve seat materials which are capable of responding to the need for alternative fuels. These materials are highly resistant to abrasion.

<Other than powertrain components>
Sintered mechanical parts
-Development of processing method that improves the accuracy and enhance the strength of shock absorber, and coupling components

Improvement in R&D infrastructure
-Improvement and expansion of facilities for evaluating the function of each part as well as the performance of each part when mounted on engines
-Building a simulation system
-Develop a support system to assist in developing designs (Piston rings)

Capital Investment

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	2,003	5,429	4,892
Automotive related product business	1,973	5,191	4,099

-For the automotive product business, the Company made a capital investment focusing on increasing its production capacity for piston rings and cylinder liners in overseas emerging markets, and rationalizing operations to achieve cost reductions.

Planned Capital Investments (automotive components)

(As of Mar. 31, 2010)

Name/ Name of the business	Location	Type of facility and purpose	Planned investment (millions of JPY)	Planned construction start date	Planned completion	Increased capacity upon completion
Nagano factory	Okaya City, Nagano Pref.	Facilities for producing piston rings, conducting R&D activities, etc.	774	2010.4	2011.3	No impact on production capacity
Gifu factory	Kani City, Gifu Pref.	Facilities for producing sintered valve seats, conducting R&D activities, etc.	86	2010.4	2011.3	No impact on production capacity
Teipi Industries Co., Ltd.	Sagae City, Yamagata Pref.	Facilities for producing cylinder liners	506	2010.4	2011.3	No impact on production capacity