Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of change (%)	Factors
Sales	58,923	65,382	(9.9)	-
Operating income	2,207	3,205	(31.1)	-
Ordinary income	2,065	3,112	(33.6)	-
Net income	729	490	48.7	-

Recent Developments Overseas
-The Company will strengthen its operations in North America to win more orders from Japanese and Korean automakers' local plants. The Company has good prospects to win new orders this year from a Japanese or Korean manufacturer, in addition to Nissan Motor Co., Ltd, which is already one of the main users of its products. The Company is trying to make further developments with an aim to open a new plant in Mexico in 2010. The establishment of a new and cost-competitive plant in Mexico will allow the Company to meet needs for new rubber products at the time automakers' new models launch. (From an article in the Nikkan Jidosha Shimbun on Sep.3, 2008)

R&D Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	1,451	1,705	1,976
Body parts	918	1,296	1,531
Brake parts	250	160	176

The Company's R&D spending is focused on the following developments:
-The Company is working to develop products that meet the current and expected customer demand for high performance, high quality, and high value-added features, especially focusing on the development of environmentally friendly elastomer material and processing technology.

-The Company is working on conducting research and development activities through a collaboration of industry, government, and academia in cooperation with research institutions including universities, in preparation for entry into new business areas.


Major developments
1.Body parts
-Development of materials and a new cross section structure with an aim to reduce a number of attachments. Development of weather strip seals with higher price competitiveness.

-Expansion of application of lighter sealing parts made of low specific gravity rubber for auto bodies.

-Expansion of application of combining interior components with more attractive design.

-Expansion of application of TPV G/RUN made of high-function elastomer with higher recycling efficiency.


2.Brake parts
-Development of ultra-hard products that are aimed at improving the durability of brake cups exposed to high hydraulic pressure.

-Cost reduction based on newly-developed production methods.


Technological Licensing Agreements (As of March 2009)

Partner	Country	Purpose	Contract period
Faltec Co., Ltd.	Japan	Window moldings and their manufacturing methods	From 2000.04.01 until the production terminates.

Technical Assistance Contracts (As of March 2009)

Partner	Country	Purpose	Contract period
Metzeler	UK	Manufacturing technology for automotive weather-strips	From 1988.11.25, until production terminates.
Renault Samsung Mortors	Korea	Technical assistant agreement for sealing products for automobile bodies.	From 2003.03.01, until production terminates.

Investment Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	Approx. 2,200	Approx. 1,700	Approx. 2,300
Body parts	Approx. 1,100	Approx. 700	Approx. 1,600
Antivibration parts	Approx. 400	Approx. 400	Approx. 200
Brake parts	Approx. 300	Approx. 300	Approx. 300

-Investment was focused on streamlining operations and revamping production lines in order to respond to model changes made by its customers.


Plans for Construction of New Facilities

Company/Office Name	Location	Purpose	Planned amount of investment ( in millions of JPY )	Start	Complete	Remark
Kinugawa Koriyama Co., Ltd.	Fukushima Pref., Japan	Manufacturing facilities	62	Apr. 2009	Mar. 2010	*
Kinugawa Oita Co., Ltd.	Oita Pref., Japan	Manufacturing facilities	40	Apr. 2009	Mar. 2010	*
Kinugawa Antivibration Co., Ltd.	Tochigi Pref., Japan	Manufacturing facilities	64	Apr. 2009	Mar. 2010	*
Teito Rubber Ltd. Headquarter Plant	Saitama Pref., Japan	Manufacturing facilities	71	Apr. 2009	Mar. 2010	*
Kinugawa (Thailand) Co., Ltd.	Ayutthaya, Thailand	Manufacturing facilities	222	Jan. 2009	Dec. 2009	*

*No significant alteration as the investment is for rationalization and model changes