Financial Overview

(in millions of JPY)

	FY 2008	FY 2007	Rate of Change (%)	Factors
Sales	159,649	184,731	(13.6)	-Sales decreased due to foreign exchange losses and a substantial decrease in automobile production volume in almost all markets. The Company is promoting cost structure improvement aiming at early earnings recovery in the next fiscal year onward.
Operating income	(6,289)	15,158	-	-Income decreased due mainly to soaring material prices in the first half and substantially lower orders in the second half.
Ordinary income	(7,900)	12,619	-
Current net income	(16,277)	6,637	-	-Net income decreased as a result of asset impairment, restructuring costs, losses posted from write-down of securities, and revaluation of deferred tax assets.

Recent Developments in Japan
-In January 2009, the Company is set to accelerate reorganization of its domestic production facilities. While stepping up concentration of production now in progress in the eastern Japan, the supplier has embarked on the study of consolidating from a three-plant operation to one-plant operation at its manufacturing subsidiary, Akebono Brake Sanyo Manufacturing Co., Ltd. located in Soja, Okayama in the western Japan. Even after the decline in demand due to the simultaneous downturn in the global economy has hit the bottom, the Company foresees the trend of shrinking production will continue in the long run, and is accelerating steps to optimize its production capacity commensurate with dwindling demand. (From an article in the Nikkan Jidosha Shimbun on Jan. 16, 2009)


Recent Developments outside Japan
-In November 2008, the Company announced that the Company will dissolve Akebono Corporation Asia Pte. Ltd., its wholly owned subsidiary in Singapore. This move is in line with the Group's plan to make Akebono Brake (Thailand) Co., Ltd. its regional headquarters in Southeast Asia. Liquidation procedures are expected to be completed by June 2009 and operations of the Singaporean subsidiary were already transferred to Akebono Brake (Thailand) by July 2008. The integration is intended to enhance the Group's business efficiency in the region. (From an article in the Nikkan Jidosha Shimbun on Nov. 20, 2008)

R&D Expenditure

(in millions of JPY)

	FY 2008	FY 2007	FY 2006
Total	2,638	2,439	1,271

R&D Structure
-R&D activities are conducted in Japan, the U.S., Europe, as well as in China. The Company leverages the combined strength stemming from each of its facilities to develop products.


<Japan>
(Friction materials)
-Mainly manufactures high performance brake pads and low-cost pads.
-In developing environmental friendly friction material products, the Company procures samples and evaluates them from the perspective of environmental safety by taking into account the MSDSs (Material Safety Data Sheets), which the Company acquires from the material makers. The Company investigates how the makers respond to environmental safety and legal regulations. Further, the Company established its own guidelines in analyzing materials.
 (Brakes)
-Its opposed brakes using aluminum alloy were mounted on high-performance vehicles.

<North America>
(Friction material)
-The Company continues its initiatives on developing friction materials, taking environmental protection into consideration (green materials). These materials are equipped in a wide range of vehicle applications, from passenger cars to pickup trucks.
(Brakes)
-The company develops disc brakes mainly for passenger cars, SUVs, and pickup trucks.
-The Company, which completed the development of new disc brakes that use lightweight aluminum alloy, started commercialization of them. 
-The company developed disc brakes, with next-generation rear parking mechanisms; and new disc brakes.  The new disc brakes are currently being developed for various vehicle models.
-The company is developing new products including a newly designed lower-cost, smaller, and lighter brake and a disc brake with improved heat-capacity performance by collaborating with Japan.

<Europe>
(Friction materials)
-The Company focused its development activities on creating friction materials for use in a wide rage of products, from high-performance materials compliant with stringent emission regulations in Europe, up to European cars exported to Japan and the U.S., putting a strong focus on the idea of peaceful and calm driving.   
-The Company developed hybrid materials targeting them in the Japanese, American, and European markets.
-Apart from its own development facility in France, the Company established an R&D subsidiary in Germany, which enables it to develop products that better meet the needs of local customers.

Capital Expenditure

( in millions of JPY )

	FY 2008	FY 2007	FY 2006
Total	17,800	14,900	8,900

Planned Amount of Capital Investment by Region
-Japan: 10,100 million yen (New Head Office building and casting equipment)
-North America: 4,000 million yen (Production base)
-Europe: 300 million yen (Development base)
-Asia: 3,400 million yen (Taking measures to respond to production increase in Indonesia and constructing a plant for pads in Thailand)


Changes in Capital Investment Plan
-In January 2009, the Company will cut down capital investments for fiscal year 2009 by more than 20 percent from this year's forecast. Apart from expenses in preparations for manufacturing products for new vehicle models, the Company will spend the majority of the investments for reorganizing and integrating its domestic operations. In order to improve its profitability as quickly as possible, the Company will put a high priority on projects to enhance production efficiency, while rescheduling expansion plans at home and abroad to FY2010 or later. In FY2008, which ends in March 2009, Akebono Brake initially planned to invest 17 billion yen. The Company, however, has trimmed down investments since the fall of 2008, the Company has cut back on spending by 5 billion in the second half of FY2008 alone, which is likely to bring the full year investments down to 12 billion yen. Based on the projection that the major automotive market in Japan, the U.S., and Europe will continue to suffer from sluggish demand during the next fiscal year, the Company has decided to further reduce its capital spending. It will be the first time for the Company to hold down the amount to less than 10 billion yen since the 1990's. (From an article in the Nikkan Jidosha Shimbun on Jan. 22, 2009)


Plan for New Facilities

Company/plant (Location)	Facilities & Activities	Total investment (millions of yen)	Start date	Completion
Headquarters and and other facilities (Tokyo, Japan)	Casting production facilities, equipment for new production methods, information equipment	970	Apr. 2009	Mar. 2010
Development division (Saitama Pref., Japan)	Testing and R&D facilities, high-performance brake development facilities	290	Apr. 2009	Mar. 2010
Akebono Brake Iwatsuki Manufacturing Co., Ltd. (Saitama Pref., Japan)	Production facilities manufacturing disc brakes and drum brakes	1,140	Apr. 2009	Mar. 2010
Akebono Brake Fukushima Manufacturing Co., Ltd. (Fukushima Pref., Japan)	Production facilities  manufacturing brake linings, industrial machinery, and railway products	410	Apr. 2009	Mar. 2010
Akebono Brake Yamagata Manufacturing Co., Ltd. (Yamagata Pref., Japan)	Production facilities  manufacturing disc brake pads	180	Apr. 2009	Mar. 2010
Akebono Brake Sanyo Manufacturing Co., Ltd. (Okayama Pref., Japan)	Production facilities  manufacturing disc brakes and drum brakes	300	Apr. 2009	Mar. 2010
Akebono Research & Development Center Ltd. (Saitama Pref., Japan)	Testing and R&D facilities	80	Apr. 2009	Mar. 2010
Akebono Corporation (North America) (Kentucky, USA)	R&D facilities	80	Jan. 2009	Dec. 2009
Ambrake Corporation (Kentucky, USA)	Production facilities  manufacturing disc brakes, drum brakes and disc brake pads	730	Jan. 2009	Dec. 2009
Amak Brake L.L.C. (Kentucky, USA)	Production facilities manufacturing disc brakes	230	Jan. 2009	Dec. 2009
Akebono Europe S.A.S. (Gonesse, France)	R&D facilities, production facilities  manufacturing disc brake pads	70	Apr. 2009	Mar. 2010
Akebono Corporation (Suzhou) (Suzhou, China)	Production facilities  manufacturing disc brake pads	30	Jan. 2009	Dec. 2009
Akebono Corporation (Guangzhou) (Guangzhou, China)	Production facilities  manufacturing disc brakes and drum brakes	50	Jan. 2009	Dec. 2009
PT. TriDharma Wisesa (Jakarta, Indonesia)	Facilities to produce disc brakes and disc brake parts	350	Jan. 2009	Dec. 2009
Akebono Brake Thailand Co., Ltd. (Chonburi , Thailand)	Production facilities  manufacturing disc brakes	110	Jan. 2009	Dec. 2009