Financial overview

in million JPY	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	80,520	87,801	(8.3)	-
Operating Income	1,476	152	868.6	<Operating income> Operating income increased due to the following factors: -The Company withdrawing from its unprofitable subsidiary in North America, H.A. Parts Products of Indiana Company,  -Productivity improvements achieved at its plants in Japan resulting from its second term "HPS Activities" which are aimed at achieving synchronized production  -Benefits gained from the recovery in earnings at its Group companies in Japan and overseas  <Non-operating profit and loss> -Though the Company reported interest expenses in the amount of 251 million JPY as a major non-operating expense, it reported a 190 million JPY year-on-year decrease in non-operating losses mainly due to paying off debts.  <Extraordinary profit and loss> -The Company posted an extraordinary profit of 853 million JPY that included a gain of 382 million JPY realized from the sale of fixed assets. It reported an extraordinary loss of 1, 316 million JPY. Among this reported loss is 316 million JPY that the Company paid as a special incentive severance pay to employees who voluntarily retired, which was based on a plan designed by Altia Hashimoto Co., Ltd. and other companies, asking for early-retirement volunteers. Also, this included a 343 million JPY loss resulting from the sale and disposal of fixed assets.
Ordinary income	1,583	259	510.4
Current net income	891	317	180.6
Automotive parts division
Sales	39,853	45,447	(12.3)	Sales decreased because the Company withdrew from its unprofitable auto parts business in North America. They also decreased because of sluggish automobile sales in Japan; and other factors.
Operating Income	1,085	(607)	-	1) The Company worked on rationalizing its operations by implementing the HPS activities in Japan and launching new plating facilities at the Tatebayashi plant, which started operating in in April 2006.  2) The Company recorded its first-ever operating income as a result of the significant financial improvements seen at in parts businesses overseas.  These improvements were the result of the Company withdrawing from the unprofitable business it operated in North America, H.A. Parts Products of Indiana Company; providing technical support to Hashimoto Limited in the UK; and reducing losses by working on rationalization activities.

Domestic business in Japan

Merger by absorption
The Company and  Technomoul merged to form Altia Hashimoto Co., Ltd. in February 2007. Altia Co., Ltd. is the surviving company. 

Overseas business

Joint venture
The Company entered into an agreement with Forecast Industries Limited in the British Virgin Islands in June 2006 to establish and operate a joint venture, Jiaxing Minqiao Automotive Parts Co., Ltd., which manufactures and sells automobile exterior plastic parts. 


<New mid-term business plan>
Faltec Challenge 830 (Term: FY2007 to FY2009)

(1) Expanding its global business operations:
The Company will work on increasing the volume of sales at its existing facilities overseas as well establishing a global supply structure that mainly will center around operations in China, the ASEAN countries, India, and the U.S.A. 

(2) Increasing the number of customers:
The Company will increase the number of customers it has by implementing the following activities.
Carrying out product development activities by utilizing its core technologies
Enhancing synergies that exist at its automotive parts and supplies business. This involves its design and product planning capabilities, production engineering capability, cost advantages, and other capabilities.
Utilizing opportunities that exist in the Kyushu Car Island Concept

(3) Enhancing product and technology development capabilities:
In April 2007, the Company established a new product/technology development division at Altia Hashimoto Co., Ltd. This new division will cover both the automobile parts business and automobile supply business working under the philosophy of creating "one-of-a-kind products and technology".
The division will enhance the Company's product and technological capabilities by conducting cross-business activities.
 
(4) Enhancing its cost advantages and improving efficiencies:

(5) Developing internal controls:

(6) Enhancing the function of the risk management committee:

-R&D expenses for FY2006 were 2,133 million yen.
-With "Challenge" and "Creativity" as the two key words, the Company is pursuing the twin goals of further shrinking development time and strengthening environmental protection.

R&D Activities on Automotive Parts 
- Responding to global developments
- Developing high-value-added surface treatment technology
- Developing multi-injection technology, variable compatible technology, and low-cost production technology
- Integrating the design and development divisions working in the area of exterior supplies
-Develop the capability to produce in small or medium-size lots.
-Develop technology that protects the environment.

The Company invested  3,476 million yen at Altia-Hashimoto in FY 2006, mainly for dies and tools to cope with model changes; and for streamlining and labor saving activities involving production facilities.
New Equipment Installations 

Company	Plant  (Location)	Equipment to be introduced	Estimated amount of investment (million yen)	Project Period
				From	To
Altia Hashimoto Co., Ltd.	Tatebayashi Plant	Manufacturing dies for new vehicle models, Other equipment	5,000	Apr. 2007	Mar. 2008