Recent Years

Contracts

- In August 2004, the Company announced that it will receive an order for the power window switches from Shanghai GM, a Chinese production site of GM of the USA. The Company will start production and delivery at its Chinese factory summer in 2005. The annual sales amount will be one billion Yen. This will be the first time for its Chinese factory to supply parts for Chinese-made vehicles manufactured by automakers other than Japanese manufacturers. The Company expects this opportunity will help the Company activate marketing in the growing Chinese market and strengthen its operating base in China. The Company, having established the joint venture Niles (Fujian) Co., Ltd. in Fujian Province, China with 51% capital participation, began the production of switches to be supplied to Japanese automakers. Supply to Shanghai GM, which will begin summer in 2005, will boost the annual sales of its Chinese factory to 2.7 billion Yen in fiscal 2006 from 2004 estimate of 400 million Yen.

- In December 2004, the Company announced that it will receive an order for the first time from GM Daewoo, a Korean automaker which belongs to the GM group. The Company will supply switches that detect the shift positions of automatic transmissions, starting summer in 2005. The Company has already received an order from Shanghai GM for the same parts, and plans to produce a monthly combined volume of 100 thousand sets for the two automakers, at its Ube plant in Yamaguchi prefecture. In future, the Company will review the parts supply and examine the possibility of shifting its production to China.

Developments Outside Japan

<USA>
- In August 2004, the Company announced that it will reorganize its production structure in the U.S.A. It plans to close the Component Production Division of its Michigan Plant and integrate its functions into the Georgia Plant in the near future. By doing this it will optimize production and raise efficiency, enhancing its cost competitiveness. The Michigan Plant and the Georgia Plant came under the control of Niles when the company acquired a local component manufacturer in February 2003

<Europe>
-In August 2004, the Company announced that it will strengthen their business activities in Europe. In conjunction with the new projects awarded by Suzuki Hungary, the Company decided to fully transfer from Japan to Thailand the production of switch products to be supplied to the European market around the middle of 2005. Concurrent with this, preparation will be made in stages from 2005 toward changing over to the full local production of these products in Europe by the end of 2006. The Company intends to achieve this through forming an alliance with a local supplier, and is now on the final stage of negotiations with a local parts manufacturer. Its Thai plant currently exports most of its products to Japan and North America. The plant No.2 of this plant was completed at the end of 2003, which doubled its production capacity, and its excess capacity will be utilized for manufacturing parts for Europe. With this move, the production volume of the Thai plant is expected to increase from the current 1.4 billion Yen to over 2 billion Yen in 2005.

<China>
-In 2004, Fuzhou Niles Electronic Co., Ltd. was established as a joint-venture company in China.

R&D Facilities

Name	Location
Tsukuba Techno Center	Ibaraki Pref., Japan

R&D Structure

- The Company conducts development activities mainly at its Design and Development Division, which consists of the design department to hande product designing and development, and the testing department to carry out testing and measurement in the area of durability and environmental friendliness.

R&D Activities

R&D focus set is on the following areas:
- Developing module products to integrate various product functions
- Developing systems components to enhance safety, comfort, and convenience levels
- Developing high-quality yet low cost products by introducing new product designs, materials, and production methods
- Developing environmentally friendly products