The TOPCON Group saw significant improvements during the second half of the fiscal year. Looking at our full-year results, however, the impact of a stagnating market in Japan, as well as in the United States and Europe, combined with a drop in the projector business in China, made for an extremely difficult operating environment. As a result consolidated net sales for the fiscal year under review amounted to ¥94.862 billion, representing a 15.8% year-on-year decline.

Operating income amounted to 1.405 billion yen (8.349 billion yen year-on-year increase). This improvement was mainly due to Company-wide efforts in reducing fixed expenses, as well as costs that were incurred during the prior year in connection with the revaluation of inventories.

The Positioning business segment experienced steady growth in China and other emerging markets. However, the economic downturn in Japan, in the United States and in Europe resulted in the Group recording consolidated net sales of ¥49.35 billion, representing a 15.0% year-on-year drop for the segment. Consolidated operating income amounted to ¥6 million (a ¥5.281 billion year-on-year increase), as fixed cost reduction measures improved the bottom line, despite the drop in net sales.

( Million yen)

Our Eye Care business segment accounted for ¥31.561 billion in consolidated net sales (5.8% year-on-year decrease), impacted heavily by the market stagnation in the United States and Europe. Consolidated operating income amounted to ¥1.963 billion (21.2% year-on-year increase), improved due to the success of our fixed expense reduction initiatives.

( Million yen)

*In of April 1, 2007, we integrated the Industrial Instruments Business and the Optical Devices Business and established the Finetech Business. Figures before fiscal 2006 were indicated after making an adjustment according to the business integration.

The Finetech business segment recorded consolidated net sales of ¥13.95 billion, representing a 34.0% year-on-year decrease. Despite a strong performance during the prior fiscal year, projector-related products in China experienced a decline during the current fiscal year. While net sales dropped considerably, initiatives to reduce fixed costs and the recording of expenses related to inventory revaluation during the prior fiscal year combined to result in a consolidated operating loss of ¥564 million (a ¥2.724 billion year-on-year improvement) in the segment.

( Million yen)