Financial overview

-	FY2007	FY2006	Rate of Change (%)	Factors
Overall
Sales	312,012	260,732	19.7	Although unit sales of automotive batteries for the Japanese aftermarket decreased, overall sales increased year-on-year, supported by the following factors: -strong sales of industrial batteries and power supply equipment; and  -the Company's having adjusted its product selling prices upward, on a global basis, in order to cope with high material prices.
Operating income	12,384	6,789	82.4	Operating income rose significantly from last year's result because of a decrease in labor costs and other expenses; and the effect of the Company's having adjusted its product selling prices upward in order to cope with soaring prices of lead and other major materials.
Ordinary income	9,946	5,517	80.3	Although the Company posted losses from exchange-rate translation, ordinary income largely increased from what it was last year. The rise was due to larger gains earned on investments the Company made in companies accounted for under the equity method due to a stronger yen.
Current net income	2,670	4,130	(35.3)	Net income dropped year-on-year as a result of the following factors: -the Company posted an extraordinary profit for a gain on the sale of its affiliated company;  -the Company posted an extraordinary loss for a loss on the disposal of fixed assets ; and  -the Company paid higher taxes, which included corporate tax adjustments.
Battery and power supply
Sales	277,004	220,582	25.6	-In Japan, unit sales of automotive batteries for the OEM market slightly decreased. Revenue from the business, however, increased as a result of the Company's having adjusted its product selling prices upward. Sales were weak at the aftermarket division, as higher selling prices having failed to offset a decrease in unit sales. -Sales of other automotive equipment were on a par with FY2006's result due to the Company's streamlining initiatives and price adjustments. As a result, its operating loss shrank largely year-on-year. Sales overseas showed a sharp increase, thanks to growth in the intermediary business for its batteries; and the Company's having adjusted its product selling prices upward. In terms of profit, soaring materials prices for the most part were offset by higher selling prices.
Operating income	12,458	7,594	64.1

Joint-ventures
-Lithium Energy Japan, which was jointly established by the Company and Mitsubishi Motors Corporation, and is starting operations in January 2009 in the Company headquarters in Minami-ku, Kyoto city, will have the world's largest production capacity of lithium ion secondary batteries for electric vehicles. Annual production will be 200,000 cells with 60 employees. The production model in the LEV50 series was newly developed based on its LIM series. (From an article in the Nikkan Jidosha Shimbun on Dec. 17, 2007)


First Medium-term business plan 
(1) Period: April 2006 through March 2009 

(2) Financial targets for FY2008
Sales: 340 billion yen
Operating income: 13 billion yen
Ordinary income: 12 billion yen

(3) Major Challenges 
-To streamline the headquarters and administrative divisions. 
-To improve profitability of its automotive battery business in Japan.
-To make a full-scale entry in the HEV and EV markets. 
-To expand its business in China and other Asian countries.
-To expand its business dealing in large lithium ion batteries

R&D expenses for FY2007 totaled 4,768 million yen, of which 4,341 million yen was spent for the battery and power supply equipment division.

R&D Structure
R&D activities for batteries and power supply equipment are conducted at the following facilities: 
-The Company's R&D Center;
-The automotive battery business division's technical development headquarters and industrial battery and power supply business division's power supply system production headquarters development section of GS Yuasa Power Supply Ltd.
-The large lithium ion engineering section of GS Yuasa Technology Ltd.
-The research group of Ztong Yee Industrial Co., Ltd.
-The development group of Yuasa Battery, Inc.
-The technical development division of Yuasa (Tianjin) Technology, Ltd.

Product Development
<Lead storage batteries>
-The Company announced that it has revamped ECO-R series, an environmentally friendly high performance battery for automobiles, by introducing innovative features which contribute to reducing CO2 emissions and improving fuel efficiency. The Company, as one of the first manufacturers engaged in the development of batteries for automobiles equipped with charging control technology, has shown its continued commitment since. This new generation ECO-R series delivers a great charging performance, which is roughly 10% higher than the company's existing products. This improvement was made possible by optimizing additive distribution on polar plates. Based on the data obtained by a test conducted by a third-party organization on a vehicle equipped with this technology in 10-15 mode, its new eco battery demonstrated an average 2 percent point reduction in CO2 emissions and fuel consumption compared with its conventional products. (From a press release on July 20, 2007)


<New automotive batteries>
-The Company is in the final phase of commercializing its lithium-ion batteries for electric vehicles (EVs). The Mitsubishi Motors' i-MiEVs that feature GS Yuasa's batteries are being test run mostly by electric companies. The Company, which will continue its activities to ensure these batteries provide high levels of performance, reliability, and safety, is preparing production lines on which to mass-produce them. 

-The Company is also working on developing lithium-ion batteries for hybrid electric vehicles (HEVs). It is already supplying two types of samples, namely 4Ah and 6Ah, for the newly developed EH series batteries, which offer high output and  long service life. The Company's joint studies with a leading automaker on battery installation are making progress, with the Company already having begun operating a model production line with the capacity to produce 10,000 cells a month. 

-The Company is making continued efforts In the area of nickel-metal-hydride batteries for HEVs so as to start mass-production of paste-type D-sized cylindrical batteries having an output of 1800W/kg or 6,100W/L. These batteries incorporate the Company's proprietary technologies that lower interior electrical resistance and control electrodes. In addition to automotive use, the Company is working to find applications for these batteries in other areas such as electric power tools and emergency light systems. The Company has also developed new products that capitalize on advantages of lithium ion batteries. These include the Toughion, a long-life battery for a use in high temperatures as a backup battery for electronic control devices.

In FY2007, the Company made a capital investment of 8,937 million yen in total.
Among this, the investment in the battery and power supply division was 7,506 million yen.

New Facilities (Selected)

Facilities	Locations	Equipment	Amount (in million yen)	Date of start	Scheduled date of completion	Purpose of the investment
GS Yuasa Corporation	Kyoto, Japan	R&D facilities	491	Mar. 2008	After March or April, 2009	Expand R&D facility
GS Yuasa Power Supply Ltd.	Kyoto, Japan	Manufacturing facilities for lead storage batteries for automotive use	1,065	Mar. 2008	After March or April, 2009	Reduce costs
		Manufacturing facilities for power supply devices and lead storage batteries for industrial use	1,632	Mar. 2008	After March or April, 2009	Reduce costs
Ztong Yee Industrial Co., Ltd.	Yungkang Tainan, Taiwan	Manufacturing facilities for lead storage batteries	759	Dec. 2007	After March or April, 2009	Increase production capacity
Yuasa Battery (Guangdong) Co., Ltd.	Guangdong, China	Manufacturing facilities for lead storage batteries	584	Dec. 2007	After March or April, 2008	Increase production capacity
Yuasa Battery (Thailand) Pub. Co., Ltd.	Bangkok, Thailand	Manufacturing facilities for lead storage batteries	298	Dec. 2007	After March or April, 2008	Increase production capacity
Yuasa Battery, Inc.	Pennsylvania, USA	Manufacturing facilities for lead storage batteries	684	Oct. 2007	After March or April, 2008	Increase production capacity