Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	33,356	34,466	(3.2)	-
Operating income	1,228	2,285	(46.3)	-
Ordinary income	1,262	2,072	(39.1)
Net income	2,138	1,061	101.5
Powder metallurgy product business
Sales	31,386	32,548	(3.6)	-Financial performance was lower year-on-year because the Company received fewer orders for automotive parts during the first half of the year due to the huge impact that the Great East Japan Earthquake had on the industry.
Operating profit	2,281	3,399	(32.9)	-

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

Outlook for FY ending Mar. 31, 2013

(in millions of JPY)

	FY ending Mar. 31, 2013 (Estimate)	FY ended Mar. 31, 2012 (Result)	Rate of Change (%)
Sales	35,400	33,356	6.1
Operating income	2,200	1,228	79.2
Ordinary income	2,100	1,262	66.4
Net income	1,200	2,138	(43.9)

R&D Expenditures

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	241	240	248

R&D Structure

Powder metallurgy product business
-The Company used to have a Technology Development Center and a  Production Technology Department, which were in charge of R&D for automotive parts. But the Company streamlined its organization in January 2010, integrating these two functions into the new Development, Production and Engineering Department.

-The Company and Toyota Motor launched a technical liaison team, which is setting the direction for developing sintered products and clarifying the individual roles and responsibilities in starting R&D activities.

R&D Activities

Materials
-In achieving its aim to reduce costs, the Company completed developing rare-earth metal materials incorporating high-strength sintered materials. In addition, in terms of crisis management, so as to mitigate risks to its supply chain, the Company at its worldwide operations is working to ensure that it can procure materials from no less than two suppliers.  

Valve seat materials
-The Company completed switching over to using these valve-seat materials in mid-sized engines and is planning to further develop them over time.

New Developments
-The Company is conducting fundamental studies and surveys into the properties of cold-sintering and magnetic materials.

Equipment
-The Company started mass-producing absorbers on an innovative production line that is leaner and makes seamless and integrated production possible. The Company plans to gradually install this latest type of production line at its plants outside Japan.

Investment Expenditures

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	2,297	1,986	1,146
Powder metallurgy product business	2,229	1,963	1,142

-The company made the following capital investments in its powder metallurgy business: plant buildings (159 million yen); structures (4 million yen) machinery (811 million), transport vehicles (1 million yen), tools and fixtures (822 million), and Other (430 million yen).

Planned Capital Investments

(As of Mar. 31, 2012)

Company Name	Location	Business	Planned investment (million THB)	Start	Completion	Production capacity increase on completion
Thai Fine Sinter Co., Ltd.	Rayong, Thailand	Facilities and equipment, and also plant buildings, to produce powder metallurgy products	700	July 2011	Dec. 2013	20%