Stanley Electric Co., Ltd. Business report FY2006

Business Highlights

Financial overview

In million JPY	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	338,680	311,785	8.6	-
Operating income	40,649	32,039	26.9	-
Ordinary income	43,612	34,769	25.4	-
Net income	26,283	20,619	27.5	-
Car Electronics Division
Sales	231,138	213,993	8.0	(1)
Operating income	21,778	16,448	32.4	-

(1): As vehicle production volume remained strong in the global market, sales of high value-added products such as adaptive front lighting systems (AFSs), discharge head lamps (HIDs) and LED rear combination lamps increased and pushed up the sales figures. The Company's sales in the motorcycle business also grew, thanks to strong sales in Japan and Asia.

R&D

Total R&D expenses for the FY2006 (FY ended Mar. 2007) was follows.
-Total R&D expenses were 4,476 million yen.
-Automotive products 1,835 million yen
-Electronic products 1,343 million yen
-Company-wide (shared) 1,297 million yen

Main fields of R&D
1.Optoelectronics area
-High power white LEDs
-High power red/infrared LEDs
-High speed sensitive image sensors
2.Display area
-Super-high contras LCDs
-Optical micro-scanners
-Display drive circuits
3.Source of light and illumination area
-Automotive lamps
-Cold Cathode Fluorescent Lamps (CCFLs)
-LED street lightings, indoor lightings and power supply units for drive systems
-Light source unit for LCDs

4.Software area
-Distribution light simulation systems
-Optical device optimal design tools
-Human interfaces
-Products utilizing above devices and technology

Technological Cooperation Licensing-in (as of March 2007)

Partner	Technology	Period
Hitachi Ltd.	Patent on LCD	Validity period of the patent
Nichia Corporation	Patent on White LED	Validity period of the patent

Technical Tie-up for Automotive Lights (as of March 2007)

Partner	Content	Term
Thai Stanley electric Public Co., Ltd. (Thailand)	Technology related to automotive lamps	31 Mar., 2009
SL Lighting Corporation (Korea)	Technology related to automotive lamps	31 Mar., 2009
Prokia Technology Co., Ltd. (Taiwan)	Technology related to area light source	31 Mar., 2008
Lumax Industries Ltd. (India)	Technology related to automotive lamps	31 Mar., 2007*

*The contract will be extended

Investment Activities

Total capital investment was 34,955 million yen in FY2006.
Out of the total amount, the Company invested 19,987 million JPY into manufacturing facilities for the automotive business.

Plans for new production facilities (Automotive components)

Name	Facility	Planned total investment (million yen)	Start month and year	Planned completion
Stanley Electric Co., Ltd. (Hatano Factory, etc. )	Production facility for the vehicle business	26,802	Apr., 2006	Mar., 2008
Tian Jin Stanley Electric Co., Ltd.	Production facility for the vehicle business	2,090	Dec., 2005	Mar., 2008
Stanley Electric U.S. Co., Inc.	Production facility for the vehicle business	2,194	Jul., 2006	Mar., 2008

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