Financial overview

(in million JPY)	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	593,454	498,427	19.1%	The Company actively invested in facilities and increased capital in North America, Asia and Europe; and reinforced production. In Japan, the Company's production structure was improved at Seto City, Aichi Prefecture, and at Iwate, Kanagawa and Fukuoka Prefectures, close to customers' sites to enhance the supply structure and efficiency in delivering products.
Operating income	31,550	19,676	60.3%	In spite of negative factors such as a drop in product prices, coupled with a rise in materials prices, profit improved, thanks to increased sales and  rationalization initiatives such as improving the cost structure in Japan and Australasia.
Ordinary income	31,347	20,023	56.6%
Net income	15,943	10,787	47.8%
Automotive component business
Sales	560,114	469,742	19.2%	Vehicle production of major customers increased in Japan, North America and Asia. New product development activities and active marketing efforts contributed to greater sales as well.
Operating income	35,420	26,473	33.8%	Negative factors included a hike in materials prices caused by high prices of crude oil. These were offset by increased sales and rationalization initiatives.

Sales by region

(in million JPY)	FY2006	FY2005	Rate of Change (%)	Factors
Japan
Sales	374,191	330,842	13.1	Increased sales of customers including Toyota Motor, active marketing of interior/exterior parts and safety systems contributed to greater sales.
Operating income	18,975	9,920	91.3	Increased sales and rationalization activities contributed to higher income
North America
Sales	141,404	126,588	11.7	Increased production by major customers and active marketing efforts contributed to greater sales
Operating income	6,367	6,485	(1.8)	Increased costs in connection with a launch of a new series negatively impacted income
Australasia
Sales	91,183	52,795	72.7	Brisk demand mainly in China and Thailand contributed to greater sales
Operating income	6,648	5,168	28.6	Increased sales in China and Thailand, along with successful launches of new sites, contributed to increasing income
Others
Sales	26,626	18,759	41.9	Business expansion in the Czech republic contributed to increasing sales
Operating income	(1,001)	(1,036)	-	Increased costs in connection with a launch of a new series negatively impacted income

R&D Expenditure

(in million JPY)	FY2006	FY2005	FY2004
Automotive Parts Business	19,900	19,000	18,900
Non-Automotive Parts Business	5,300	5,400	3,700

R&D Structure
Each division's development department cooperated on global R&D activities in collaboration with the Technology Department, Production Technology Department, Technology Management Department, Development Department, Production Technology Development Department, Material Technology Department, and TG North America's technology headquarters and TG Europe, which are currently consolidated subsidiaries. By conducting these activities the Company aims to have eight of its products lead in market share in the world in 2010.

New Product-Development Activities;
and Recent Developments
- Advanced omni-support concept airbag with improved performance in mitigating collisions
- Low-cost millimeter wave radar garnish that uses less indium, which is a rare metal used as metal film
- Overhead consoles in which high intensity LEDs are incorporated
- Plastic In-board CVJ boots

Items Currently Under Development
- All-composite, high-pressure hydrogen tanks for fuel cell vehicles

The Company will introduce light-emitting diodes (LEDs) in automotive lighting applications, by which it aims to significantly cut down the size of automotive lamps. The Company expects that the use of LEDs will contribute to producing headlamps and rear combination lamps, that are 90 percent smaller than existing products. The number of applications of LEDs, which are here to stay in the mobile phone industry and other electronics businesses, are now expected to increase into the automotive and general lighting sectors too. By integrating new LED technology into the Company's already existing expertise in making auto components, the Company intends to develop LED lighting technology into a new high value-added business for the automotive industry. (From an article in the Nikkan Jidosha Shimbun on Jan. 22, 2007)

Technological Alliance
The Company announced that it entered an agreement with Philips Lumileds Lighting Company (PLLC) based in the U.S. (PLLC is headquartered in San Jose, California.) The agreement deals with patents for their technology on extremely luminescent light-emitting diode (LEDs). The agreement allows both companies to use each other's patents for blue LEDs and red LEDs in developing their products without worrying about patent violations. The two companies agreed to construct an environment wherein they will respect and mutually utilize each other's technologies. (From a story in the Nikkan Jidosha Shimbun on Apr. 6, 2006)

Patent License Contracts for Innovations in Technology (as of Mar. 2007)

Company	Country	Contract	Period
Eaton Corporation	USA	A patent license agreement for fuel valves.	1999.02.10- 2013.02.18
Autoliv Development AB	Sweden	A patent license agreement for curtain airbags.	2001.02.05- 2016.02.20
Stant Manufacturing, Inc.	USA	A patent license agreement for quick turn fuel caps.	2001.04.02- 2014.10.18
Visteon Global Technologies, Inc.	USA	A patent license agreement for fuel valves.	2001.11.20- 2010.08.24
Tridonik Optoelectronics	Austria	A patent license agreement for white LED	2002.02.04- 2021.11.19
Intier Automotive Interiors of America	USA	A patent and expertise license agreement for urethane spray surfaces	2002.11.18- 2014.05.10

Technical Assistance Contracts (as of Mar, 2007)

Company	Country	Contract	Period
Premium Moldings & Pressings Pvt. Ltd.	India	An expertise license agreement for steering wheels	1998.08.07- 2008.08.06
Stant Manufacturing, Inc.	USA	An expertise license agreement for conductive fuel caps	1998.11.17- 2018.12.21
TI Automotive Ltd.	UK	A patent license agreement for fuel cut-off valves	2002.09.12- 2009.10.16
Magna Steyr Fuel Systems	Germany	A patent license agreement for conductive fuel caps.	2004.02.26- 2018.12.21
Orbitronics Co., Ltd.	Pakistan	An expertise license agreement for steering wheels	2006.12.29- 2014.12.28

Capital Expenditure

(in million JPY)	FY2006	FY2005	FY2004
Automotive Parts Business	52,000	44,400	35,100
Non-Automotive Parts Business	2,900	1,200	7,100
Group	54,900	45,600	42,200

Domestic Investment
The Company announced that it will establish a new plant for interior and exterior parts in Seto city, Aichi prefecture. The new plant will start operation in April 2007, manufacturing instrument panels, console boxes, glove boxes, etc. The investment in the first stage will amount to 2.8 billion yen. When the third-stage construction is completed at the end of 2009, the Company expects the sales of 14 billion yen. The new plant has a site area of 45,000 square meters and a floor area of 7,000 square meters in the first stage. The number of employees working there will be 100 when the operation starts, and will increase to 270 by the end of 2009.(From an article in the Nikkan Jidosha Shimbun on Nov. 29, 2006)