Financial Overview

(in million JPY)	FY2007	FY2006	Rate of Change (%)	Factors
Overall
Sales	41,887	37,602	11.4	Sales rose due to increasing sales in the powder metallurgy products business, despite decreased sales in the hydraulic machinery products business.
Operating income	2,049	1,271	61.2	Profit declined for the Company as the sales increase did not cover price hikes for materials. Operating income, ordinary income, and net income  increased due to increased earnings at its overseas operations.
Ordinary income	1,641	1,196	37.2
Net income	1,097	793	38.4
Powder metallurgy product business
Sales	39,890	35,564	12.2	The sales in this segment increased due to an increase in orders the Company won from its major customers.
Operating profit	3,330	2,531	31.6	-

Recent developments in Japan

-Sales for FY2007 ended March, 2008 were 36,582 million yen, a 6.7% increase year-on-year, supported by strong sales in the automotive industry.
-Operating income increased by 0.1% to 1,186 million yen due to higher raw-material prices and reduced sales prices.

Relocation of the headquarters

-The Company constructed a new headquarters building in Kasugai city, Aichi prefecture, in January 2008, and moved its headquarters and technology departments there.

Recent developments in markets outside Japan

Asia

-Sales for this region increased by 82.6% year-on-year to 4,506 million yen, as the Company started commercial production in China.
-Operating income increased by 2,591.8% year-on-year to 799 million yen due to steady production in Thailand and China.

North America

-The sales in this region rose by 8.7% year-on-year to 1,724 million yen. The increase in orders for the Company's automotive parts in the U.S. contributed to the increased sales.
-Operating income increased by 76.5% year-on-year to 92 million yen as a result of the Company's efforts to improve its production structure and reduce manufacturing costs

Challenges for the future

While the Company achieved a surplus in operating income at all its facilities in Thailand, North America and China, the revenue loss continued to exceed the revenue gain in North America. As a top priority, it will work to restore profitability at all its facilities, and to clear the cumulative losses as soon as possible.

R&D Structure

The Company established headquarters in Kasugai city, Aichi prefecture, in January 2008, and integrated its technical departments such as Technical Development Center, the Production Technology department, and the die mold making department there.

R&D Expenditures

(in millions of JPY)	FY2007	FY2006	FY2005
Overall	327	363	370
Powder metallurgy product business	327	363	370

Powder metallurgy product business (FY2007)

-In the area of materials, the Company developed an inexpensive material for valve seats, which has equivalent wear resistance to existing materials . This material was adapted for use in intake the system, and commercial production will start in FY2008 (ending March 2009).

-The Company completed the basic evaluation of high-strength materials which it had developed over a long period. It will start the evaluation of commercially produced products and replacement of conventional products with the new ones as soon as possible.  

-In terms of its process and facilities, the Company successfully developed a press machine for exclusive use in producing valve seats.  The Company's DE department (die development department) and the product technology department have succesfully and jointly engaged in developing a compact die set for shock absorber components. The new compact die set is expected to contribute to prolonged life of die and reduced die cost.  

Investment Expenditures

(in million JPY)	FY2007	FY2006	FY2005
Overall	4,843	5,317	4,544
Powder metallurgy product business	4,806	5,302	4,539

In the powder metallurgy product business, the Company invested 3,351million yen in acquiring machinery and equipment and 914 million yen in upgrading dies.

Capital investment currently underway

Plant (Location)	Details	Planned investment (in million JPY)	Start	Completion	Enhanced production capacity after completion
Shiga plant (Shiga, Japan)	Manufacturing facility for powder metallurgy products	555	Jun. 2008 .	Oct. 2008	Slight increase in production capacity