Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of Change(%)	Factors
Overall
Sales	427,191	595,463	(28.3)	1)
Operating income	(27,031)	27,993	-	2)
Ordinary income	(30,310)	41,780	-
Net income	(67,256)	7,830	-	-
Parts Manufacturing & Assembly Division
Sales	119,535	153,821	(22.3)	3)
Operating income	(4,019)	73	-	-

Factors
1)
-Sharp falls in the prices of zinc, copper and other metals; and further appreciation of the yen, were major factors for lower sales in the metal and environment segments.

-The slowdown in global demand was a major factor for lower sales in the electronic materials and automotive functional components segments.

2)
-The Company consolidated production facilities making semi-conductor assembly materials such as TAB tapes and COF tapes, and decided to lay off approximately 4,000 workers group-wide and globally by the end of September 2009. Despite such efforts to restructure its business and cut costs, income declined.

3)
Highlights of the assembly and processing division
<Functional components for automobiles>
-Production volume for the fiscal year that ended March 2009 amounted to 80,000 million  yen.

-Sluggish sales of automobiles worldwide severely impacted sales of functional components for automobiles. Particularly the contracted North American market and the slowdown in demand for SUVs and minivans had a huge impact.

<Die-casting products>
-Production volume for the fiscal  year that ended March 2009 amounted to 8,500 million yen.

-Sales of automotive aluminum die-casting products dropped because the Company's customers took measures to adjust their inventories and started to purchase products locally.

<Automotive catalysts>
-Sales decreased because of a sudden decline in the prices of precious metals, which account for the major part of the Company's product prices.


Business Partnership with Gentech
-The Company announced that it will partner with UK-based Gentech International Ltd. in the business of urea sensors. The two companies will work together to develop and sell products that integrate Senfoa(R), the Company's urea sensors designed for diesel engine exhaust gas cleaning systems, into Gentech's level sensor modules. Sample shipments are scheduled to begin in January 2009. These sensor modules will initially be marketed in the commercial vehicle segment, but the Company plans to expand their application to passenger cars in years to come. Both parties expect to achieve annual sales of more than 500,000 units by 2015. (From a press release on Nov 20, 2008)

Outlook for FY2009

(in millions of JPY)

	FY2008 (actual)	FY2009 (forecast)	Rate of change(%)
Sales	427,191	320,000	(25.1)
-Parts Manufacturing & Assembly Division	119,535	93,000	(22.2)
Capital investment	32,400	16,600	(48.8)
-Parts Manufacturing & Assembly Division	7,600	6,000	(21.1)

-Real recovery in demand is expected to take place in or after 2010. The Company intends to return to profitability by reorganizing its business and initiating cost reduction activities, which will include lay-offs.

--Assembly business: The Company undertook thorough efforts to consolidate facilities and rationalize its business operations in order to lower its operating deficit.

Status of business rationalization scheme
-The Company laid off 4,000 workers group-wide in the first half of FY2009, as planned.
-The Company consolidated its door lock production facilities into nine facilities worldwide, from 13. It aims to become profitable even if sales were to decline by 30%.

R&D Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Corporate	8,011	8,314	7,359
Parts Manufacturing & Assembly Division	2,847	2,380	1,956
As a % of total R&D expenses	35.5%	28.6%	26.6%

R&D Structure
-The Company mainly conducted R&D activities at its main laboratory and worked on its Chief Technology Officer (CTO) project. 


R&D Activities
Parts Manufacturing & Assembly Division
-The Company is conducting R&D activities mainly in the machining of automotive functional components and die casting products.

-Specific outcomes are:
1. The Company developed functional parts such as door locks; it also systemized and modularized functional products and other items.
2. The Company developed new, high-performance automotive catalysts
3. The Company developed environmentally friendly surface treatment technology for aluminum die-casting products.


-The Company announced that it developed a new silicon-based negative electrode called SILX, that has an energy density 50% higher than that of conventional products. The SILX, which will be used in lithium-ion batteries, is capable of producing higher capacity and output. In the past, making a longer life electrode based on silicon was considered to be something rather difficult to achieve. The Company is planning to commercialize the SILX with its partners, which includes battery, home appliance, and car manufacturers by 2010. When SILX is used in lithium-ion batteries, the energy density of the battery becomes 30 to 50% higher than current products based on carbon. SILX will also provide a longer-use, much higher electric current. (From an article in the Nikkan Jidosha Shimbun on Apr. 11, 2008)

-The Company announced that it developed new catalysts, which use silver instead of  platinum, for diesel engine vehicles. Silver is a much cheaper metal, so according to the Company, switching to silver from platinum will reduce the cost of precious metals the Company uses by more than 90 percent, without compromising on the high level of performance in the catalyst itself in terms of purifying particulate matters (PMs). In addition, silver-based catalysts offer greater efficiency when it comes to burning diesel soot since they have a higher ability to both take in and release oxygen compared with conventional platinum catalysts. Having conducted a series of evaluation tests on the new silver catalysts installed on actual vehicles, the Company plans to initially market the catalysts designed for diesel engines used in industrial machineries. In the future, the Company plans to launch these types of catalysts for installation on trucks and passenger vehicles also. (From an article in the Nikkan Jidosha Shimbun on Apr. 24, 2008)

Capital Investment

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	32,400	39,200	40,300
Parts Manufacturing & Assembly Division	7,600	6,800	5,400
As a % of total investment	23.5%	17.3%	13.4%

Parts Manufacturing & Assembly Division
-The Company made investments to enhance the productivity of manufacturing automotive parts such as door locks; and to save labor.

Plans for Capital Investment

(in millions of JPY)

	Planned amount of investment	Details and objectives
Overall	16,600	-
Parts Manufacturing & Assembly Division	4,800	To enhance the productivity of automotive parts manufacturing operations and to save on labor
as a % of total investment	28.9%	-