Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Overall
Sales	238,888	283,302	(15.7)	-
Operating income	24,336	23,392	4.0	-
Ordinary income	26,045	25,398	2.5	-
Net income	17,128	12,128	41.2	-
Automotive products
Sales	178,840	208,497	(14.2)	-
Operating income	21,178	18,339	15.5	- Operating income increased due to an improvement in productivity as a result of the Company's Production Innovation Initiative.

New Subsidiary Established

-The Company has set up a subsidiary for manufacture and sale of electronic and other products in Brazil as of October 1, 2009 in a bid to launch local production in a rapidly growing market of cars and electronic products. The new company Stanley Electric do Brasil Ltda. will build a plant in the suburbs of Sao Paulo. It is capitalized at 70 million reals, invested 70 percent by Stanley Electric and 30 percent by its U.S. subsidiary. The operation is expected to generate sales of 800 million yen in fiscal 2011 and 1.9 billion yen in 2012 by delivering products to customers including electronic and automotive makers. (From an article in the Nikkan Jidosha Shimbun on Nov. 11, 2009)

Acquisitions

-The Company has acquired a 5 percent share in SL Corporation. SL is a Korean lamp manufacturer. (From a press release on Oct. 29, 2009)

Highlights by Region

<Japan>
-Even though the market was on the way to recovery, the Company's sales decreased compared to those of the previous fiscal year. However, operating income was almost at the same level as that of the previous year, thanks to an improvement in productivity as a result of the Company's Production Innovation Initiative.

<Asia Pacific>
-Operating income increased, thanks to an improvement in productivity as a result of the Company's Production Innovation Initiative.

<China>
-Sales increased, supported by a recovery in orders for mainly automotive devices.
- Operating income also increased, thanks to an improvement in productivity as a result of the Company's Production Innovation Initiative.

<Other regions>
-In Europe, while economic conditions were on a track to a modest recovery (mainly in the area of exports), local demand generated by personal consumption and capital investment still remained at a low level. Sales and income decreased for automotive devices, electronic devices, and applied electronics products.

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

The Fourth Medium-term Three Year Business Plan (April 2010 through March 2013)

1. Enhancing cash flow management

-While further evolving the Production Innovation Initiative, the Company is making a Group-wide effort to innovate processes through reducing costs and lead time in all the business processes. -The Company operates under the Three-dimensional Matrix Management style, a type of management style in which three pivotal sectors work together. The three are the headquarters, functions, and facilities.

2. Establishing the foundation to increase new business

-The Company aims to improve the value provided to the customers. -The Company cultivates a corporate culture that encourages innovation, so that every employee feels the will to create new products and business opportunities and actively work to maintain and achieve the highest level of optical technologies in the world.

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	3,586	4,087	4,731
Automotive products	1,092	1,635	1,981
Electronics products	2,494	2,452	2,749

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 lighting 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

5. Products utilizing above devices and technology

Technological Cooperation Licensing-in

(As of Mar. 31, 2010)

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 Mar. 31, 2010)

Partner	Content	Term
Thai Stanley electric Public Co., Ltd. (Thailand)	Technology related to automotive lamps	31 March, 2012
SL Lighting Corporation (Korea)	Technology related to automotive lamps	31 March, 2014
Kenmos Technology Co., Ltd. (Taiwan)	Technology related to area light source	31 March, 2011
Lumax Industries Ltd. (India)	Technology related to automotive lamps	31 March, 2011

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	18,826	25,864	28,577
Automotive products	15,701	14,542	18,957

-The Company announced that the Hatano Factory in Kanagawa Prefecture - one of its main automotive lamp manufacturing facilities - has completed the construction of new No.1 Building and started production in August 2009. (From a press release on September 29, 2009)

 

Plans for New Production Facilities (Automotive products)

Name (Location)	Type of facility	Total amount (in million JPY)	Start	Completion
Hatano Factory, etc. (Hadano City, Kanagawa Pref.)	Automotive business facilities	15,974	April 2009	March 2011
Hamamatsu Factory, etc. (Hamamatsu City, Shizuoka Pref.)	Automotive and motorcycle facilities	1,822	April 2009	March 2011
Guangzhou Stanley Electric Co., Ltd. (Guangzhou, China)	Automotive business facilities	7,934	Jan. 2008	March 2013
Stanley Electric do Brasil Ltda. (Sao Paulo, Brasil)	Automotive business facilities	5,450	Nov. 2009	Jan, 2012