To our stockholders,
Thank you for being our best partner.

Here is our report regarding our sales and financial results for the fiscal year starting from April 1, 2009 to March 31, 2010 (this being the 41st Pulstec Industrial Co., Ltd., fiscal year).

With regards to the economy of Japan, in this current business year, the severe employment environment has resulted in the continual lowering of personal income. However, due to the effects of the national economic policy, which is now demonstrating some economic recovery, plant and equipment investment, that had previously been frozen or temporarily postponed there has been a gradual sign of recovery.

The main industrial sector in which Pulstec Industrial Co., Ltd. Operates, improved, particularly with regard to Flat screen TVs and Blu-ray recorders, corresponding to the rise in digital terrestrial broadcasting, and the introduction of Eco Point (CO2 reduction by low electrical power consumption etc).

In this situation, our company concentrated on the sale of existing products, which was mainly for optical disc associated equipment and systems. In addition we entered new markets, such as the special recording of data, including images, text and other documents using optical disc media, also environment-friendly photovoltaic type LED panel lights, etc.
We expect the orders for these special devices and systems to grow, and we anticipate repeat orders. These business opportunities have been aggressively developed. At the same time, we have concentrated on reducing our costs, by actively cutting the costs of materials and labor.

The amount of orders accepted total 2,563 million yen, a decrease of 11.2% for the same term period in the previous year. Our optical disc related equipment and systems, the Nano fabrication device, and the special inspection device showed improved business, and moved into recovery. However, with regard to our new product, drive for special recording, we reviewed our sales strategy which is based on predicted customer demand and the sales prospects for the future have been reduced to reflect this. The 3-Dimensional Scanner market was influenced by the automobile manufacturing industry's investment in new plant and equipment.

With regards to the amount of total sales, this reached a total of 2,106 million yen, which represents a decrease of 33.8% for the same period in the previous year). This situation was influenced by the sales situation for the special recording drives project, additionally orders were a little lower than expected at the beginning of the fiscal period, and due to market conditions, it was not possible to match the order situation experienced in the same half year period as last year.

Regarding profit and loss. Profitability has improved with the reduction of material costs, outside order, and other expenses. However, the "drive for special recordings" resulted in a decrease in the sales inventory, and the valuation of losses added up to 197 million yen operating loss (the loss for the same term during the previous year was 406 million yen loss) and 175 million yen ordinary loss (the loss for the same term during the previous year was 414 million yen). A loss was attributed to the old Head Office building at Hamamatsu Kita-ku, was an idle asset, contributing a loss of 242 million yen current term net loss (the loss for the same term during the previous year was 517 million yen).

The main equipment investment in the current business year are; demonstration systems for sales promotions, such as the Disc evaluation system for Blu-ray discs, and the Stamper evaluation system for Blu-ray stamper, the amount of capital investment totals 28 million yen.

With regard to the financing aspect, there is no specific notice at this time.

Our company was able to achieve suitable success by implementation of the structural reform for turn profit, such as the management's reform, large-scale cost reduction, withdrawal from unprofitable operations, and liquidation of an ailing subsidiary.However, it did not result in the return to profitability, but the current term net loss of a continuous is added up for 5 years by the end of this year, and it has become the situation of inducing the important doubt about the premise of a going concern.

For the next term, in order to turn our performance into a positive figure, and set slogan "Strengthening of profits, and appropriation of continuous profits" for business policy, and the following measures are implemented.