Business report for Fiscal Year 2012
(From April 1, 2011 to March 31, 2012)

Turn the delight into reality

To Our Shareholders

Tokai Rika is grateful to its shareholders fortheir continued support.
In this business report, we present theCompany’s business results for fiscal year 2012
(from April 1, 2011 to March 31, 2012) andreport on the challenges and opportunities
ahead.

Kiyoshi Kinoshita

Yuzo Ushiyama

Chairman of the Board

President

1

Regarding financial results for the year under review, net
sales decreased 8,045 million yen or 2.5% year on year to319,577 million yen. Despite the Group-wide cost
reduction initiatives, ordinary income decreased 5,081
million yen or 25.3% to 14,977 million yen owing to thestrong yen. Net income increased 2,889 million yen or
55.2% to 8,123 million yen, partly because the Company
recorded provision for product warrants as an
extraordinary loss in the previous year whereas no suchloss was recorded for the year under review.
The Company paid out an interim dividend of 14 yen per
share in November 2011. The year-end dividend was 16
yen per share. As a result, total dividends for the year
under review, including the interim dividend, amounted to
30 yen per share, unchanged from the previous year.

Challenges and Opportunities

Review of Operations
In the fiscal year under review, overall growth of theemerging economies slowed somewhat. However, China
and India continued to achieve high growth rates
supported by robust domestic demand and led the world
economy. Meanwhile, the performance of the advanced
economies was undermined, albeit temporarily, by theEuropean sovereign debt crisis, the Great East Japan
Earthquake, and the flooding in Thailand, etc. However,
economies returned to a moderate recovery track after themidterm once concerns about the sovereign debt crisis
abated somewhat and the demand for reconstruction in
the aftermath of the earthquake took off. The performanceof the world economy improved overall despite thesevarious setbacks.

Under such circumstances and in response to the
expansion of the compact car market, a shift to emerging
economies, the strong yen, the earthquake in Japan, andthe flooding in Thailand, while endeavoring to overcomechanges in the operating environment, intensifying
competition, and climate unconducive to profit-making, andachieve further growth, the Tokai Rika Group focused onfour key themes: quality, new product development,
prevailing in Asia, and reinforcing the management
constitution. With regard to quality, we strengthened
initiatives to prevent major trouble including efforts toeliminate the quality risk at upstream departments. In new
product development, we sought to anticipate future needs.
Measures to prevail in Asia included establishment of a newcompany in Indonesia and a new plant in Brazil to capture
vigorous demand in emerging economies centering on Asia.
To reinforce the management constitution, we pursued the
optimum allocation of resources for growth and continued
initiatives to reduce fixed costs by thoroughly eliminating“waste,” “inconsistency,” and “unreasonableness.”

In the automotive industry, auto sales volumes in the U.S.
showed year-on-year growth in line with signs of economic
recovery, and continued to grow strongly in China andIndia whose economic growth rates, although lessvigorous than in the previous year, remained high. In Asia,
sales volumes soared as markets expanded, with floodaffected Thailand being a notable exception. On the other
hand, sales volumes decreased slightly in Europe, where
the economic situation is unstable, and in earthquakestricken Japan. Worldwide sales volumes slightly
exceeded the previous year’s level as sales declines in
Europe and Japan were offset by rising sales in the U.S.
and in emerging economies.

In view of the shift of the center of gravity of the global
automotive market to the emerging economies as well as
the uncertainty over the scale of automobile sales given thesluggish European economies and the possibility of sharp
increases in oil prices, the Group expects fierce pricecompetition to continue and profits to remain hard tosecure. In order to overcome this adverse situation andachieve further growth, the Group is determined tocomplete the initiatives corresponding to the four key
themes of the growth strategy—quality, new productdevelopment, prevailing in Asia, and reinforcing themanagement constitution—and position them as theGroup’s strengths through further development. For quality,
we are strengthening our initiatives to prevent major trouble
and will inculcate them in our operations worldwide throughhorizontal deployment. In new product development, weare concentrating on next-generation products optimized
for mass production and capable of driving sales upward.
To prevail in Asia, we are determined to capture demand in
the rapidly growing markets of the emerging economies byresolving regional issues and developing operations suited
to the region. To reinforce the management constitution, we
aim to establish a robust foundation by allocating resources
made available through ongoing improvements and humanresources development to high-value added processes
and key measures.
With “speed,” “execution,” and “follow-up” as ourwatchwords, everyone in the Group is making a concerted
effort to enhance quality and expertise so as to create
products that anticipate emerging needs and are capableof ensuring that Tokai Rika Group flourishes far into the
future. At the same time, we will strive to enhance
corporate value by fulfilling our social responsibility,
including legal compliance and social contribution.
In these endeavors, we request our shareholders to favor
us with their continued support and guidance.
June 20122

Consolidated Financial Highlights

Ordinary Income and
Net Income

Net Sales(100 million yen)

4,500

Business Performance by Geographic Region

Net Income(100 million yen)

4,400

350
3,374 3,310

3,276

3,195

250

212

200

203

150
1,500

200
149

126

100

81
52

50
2008

2009

2010

2011

2012

0

1010
2008

2009

2010

2011

Japan
Net sales decreased 3,540 million yen(1.5%) year on year to 229,833 million yen.
Operating income increased 349 million
yen (4.9%) to 7,462 million yen owing toaggressive rationalization despite theimpact of the appreciation of the yen.

344

300

3,000

0

Ordinary Income

2012

Composition of Net Sales by Geographical Region• Europe and Others• Asia

4.6%

16.2%

• North America

14.9%• Japan

64.3%

North America
Net sales decreased 4,364 million yen(7.6%) year on year to 53,429 million yen.
Operating income declined 1,542 million
yen (85.1%) to 270 million yen mainly
owing to lower sales.

Net Sales by Geographical Region (100 million yen)
• Japan• North America• Asia• Europe and Others

3,000

750

750

200

2,000

500

500

150

Net Income per Share

Return on Equity (ROE)

(yen)

250

Asia

(%)

Net sales decreased 2,481 million yen(4.1%) year on year to 57,733 million yen.
Operating income decreased 4,182 million
yen (44.2%) to 5,270 million yen owing tolower sales and the impact of flooding in
Thailand.

20

236.26

200

15

150

139.54
10

Europe and elsewhere

89.95

100
57.95

50

Net sales increased 1,173 million yen(7.7%) year on year to 16,370 million yen.
Operating income dropped 249 million yen(82.7%) to 52 million yen.

5

11.77
0

2008

2009

2010

2011

2012

0

2008

2009

2010

2011

100
1,000

50

0

0

2010

2011

0

2010

2012

2011

2012

0

2010

2011

2012

2010

2011

2012

*Net sales include intersegment sales.

Operating Income by Geographical Region (100 million yen)
• Japan• North America

100• Europe and Others• Asia
100

30

10

75

50

5

50

15

25

2012
0

0

2010

3

250

250

2011

2012

0

0

2010

2011

2012

2010

2011

2012

2010

2011

2012

4

Tokai Rika’s Product Fields

TopicsNew Plating Equipment at TRBR,
a Subsidiary in Brazil
New plating equipment introduced at TRBR INDUSTRIA E
COMERCIO LTDA. (TRBR), our subsidiary in Brazil, which relocatedto a new site in 2011, started operation in February 2012.
Various switches such as Multi-Function Switches and Shift
Levers have been produced at the subsidiary. With the addition ofa plating process, TRBR now offers products with higher added
value to customers.

Participation in the 42nd Tokyo Motor Show,
where many visitors came to our boothTokai Rika participated in the 42nd Tokyo Motor Show held at
Tokyo Big Sight in December 2011. With “watching,” “touching,”and “connecting” as our key words, we introduced products invarious fields that connect people and automobiles, including
steering switch simulators that gave visitors the opportunity toexperience the pleasure and convenience of accessing driving
information. Products showcased included the Bamboo Steering
Wheel in the new Lexus GS and the Four-Directional SteeringWheel-Mounted Controls in the Camry.

Human Machine Interface Systems, notably switches to accurately relay human commands, security systems to prevent
unauthorized access to automobiles, and safety systems to protect human lives. In these domains where people and automobiles
intersect, we deliver comfort, safety and security by fully utilizing the underlying electronics technologies.

Switch/Interface

Security

Switches/Human Machine Interface Systems

Security Systems

Precise operability accurately conveying thedrivers’ commands, simplicity, and functional
elegance are the hallmarks of our products.

Sophisticated mechanical and electronic
anti-theft functions ensure both security
and ease of use.
Electro Shiftmatic

Multi-Function Switch

New Sled Tester Started Operations at the
Safety Experiment Facility

Balloon Release Charity Event to Support the
Tohoku Region

The new sled tester installed at the safety experiment facility of
the head office and plant has been in operation since April 2011.
Capable of ultra-high-response tuning of waveforms of actual
automobiles, this sled tester can flexibly respond to various evaluation tests. Simplified operation of the tester has resulted in
improved operating efficiency.

On March 11, a year after the Great East Japan Earthquake, we
held a charity event to support the Tohoku region, which was hit
hard by the disaster. After the annual clean-up along a river,
employees and their families wrote messages of encouragement
on 100 white balloons that were released to raise the spirits ofthe people affected by the disaster, expressing the wish for reconstruction to be completed as soon as possible. The balloons,made of natural rubber, are biodegradable.

Remote Key and Receiver

SafetyElectronics & Others

Safety Systems

Electronics & Others

Our safety devices include seatbelts to protect drivers and passengers in the event ofcollision, stylish steering wheels optimized
for excellent handling, and mirrors thatenhance visibility.

Door Mirror with Side-Turn
Lamp and Foot Illumination
5

Push Start Switch

Smart Key Portable Device
and Emergency Key

Immobilizer◆ Automotive Electronics
Products◆ Housing Facilities and Equipment

Seatbelt for Pre-Crash
Safety System

Real Wood Steering Wheel**The steering wheel business is co-operated with Toyoda Gosei Co., Ltd.

Applying technologies originally employed in automotive
applications, we offer conve- Power Supply ECU
nient products meeting today’s We offer products forhousing-security needs.
function control and status
La Lock Hallway Immobilizer Key System
detection as well as vari◆ Automotive Accessories We are a source of vehicle décor ous types of connectors incharacterized by design flair. These response to the continued
products allow owners to enhance computerization of conthe appeal of their vehicles trols in automobiles.
through customization.
6

Consolidated Financial Statements

Non-consolidated Financial Highlights

Consolidated Balance Sheets (Millions of yen)
As of March
31, 2012

As of March
31, 2011

ASSETS
Current assets

156,598

150,976

Cash and deposits

21,74927,156

Notes and accounts receivable

54,954

41,643Marketable securities

40,24345,479Inventories

23,004

22,460Other

16,645

14,235

Fixed assets

116,619

108,727

72,87069,932

Buildings and structures

25,617

26,173

Other

47,25243,758

1,601

2,024

Tangible fixed assets

Intangible fixed assets
Investments and other assets
Total assets

42,147

36,771

273,217259,704

Consolidated Statements of Income (Millions of yen)

As of March
31, 2012
LIABILITIESCurrent liabilities
Notes and accounts payable
Accrued expenses
Other
Long-term liabilities
Long-term borrowings
Liability for retirement benefits
Other
Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Less: Treasury stock, at cost
Accumulated other comprehensive income
Net unrealized loss on available-for-sale securities
Foreign currency translation adjustments
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

7

319,577
280,552
39,02525,86813,1562,364
543
14,977103524
14,556
2,734
3,587
8,234
110
8,123

327,622
279,82047,802
28,895
18,9061,582
430
20,05867
12,7197,405
3,303(1,819)
5,922
688
5,234

84,34050,24012,52821,571
23,678
5,956
16,752969
108,018

72,95438,716
10,77523,462
25,625
7,878
16,748998
98,579171,375
22,85625,134130,434(7,049)(10,293)(278)(10,015)777
3,339
165,198
273,217

165,778
22,85625,134
124,833(7,045)(9,117)(42)(9,074)662
3,801
161,125
259,704

Consolidated Cash Flow Statements (Millions of yen)

Year ended
Year ended
March 31, 2012 March 31, 2011
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary gains
Extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Income before minority interests
Minority interests in income
Net income

As of March
31, 2011

Year ended
Year ended
March 31, 2012 March 31, 2011
Cash flows from operating activities

13,83330,956

Cash flows from investing activities(22,341)(11,428)

Cash flows from financing activities(1,827)(4,795)

Effect of foreign currency translation
adjustments on cash and cash equivalents(545)(1,598)Net increase in cash and cash equivalents(10,881)

13,133

Cash and cash equivalents at beginning of year

67,46254,329Cash and cash equivalents at end of year

56,581

67,462

Ordinary Income and
Net Income

Net Sales(100 million yen)

3,500

250

3,226

3,000

(100 million yen)

235

200
2,481

2,500

2,482

2,363

2,268

2,000

159

150

124

100

1,500

117

500

0

0

-50

2008

2009

2010

2011

Cash Dividends

2012

97
42

-23 -2920082009

Full year
Interim

(yen)

121

78

50

1,000

50

Ordinary Income
Net Income

2010

2011

2012

Year-end Cash Dividend

48
At the 65th annual general meeting of shareholders held on June

40
32

30
23

32

30

al to pay the year-end dividend to30

shareholders on the record date24

of March 31, 2012, was approved.

20

16

10
0

13, 2012, the Company’s propos-

14

1Year-end cash
dividend

16 yen per share

2

Effective date for
year-end dividend(payment commencement date)June 14, 2012

8

2008

2009

2010

2011

2012

8

Stock Information

Corporate Profile (as of March 31, 2012)(as of March 31, 2012)

Total number of shares
Total number of shares authorized to be issued:

200,000,000

Number of shares issued and outstanding:

94,234,171

Number of shareholders:Composition of Shareholders
by Shareholder Type

Corporate Overview

Executive Management (as of June 13, 2012)

Paid-in capital:
22.8 billion yen

8,950
Number of employees:
15,663 (consolidated)
6,055 (non-consolidated)

Major shareholders (Top 10)
Number of shares
Equity(thousands of shares) participation (%)

Shareholder

Toyota Motor Corporation

29,367

31.16

Denso Corporation

8,839

9.38

Japan Trustee Services Bank, Ltd. (Trust Account)

5,052

5.36

The Master Trust Bank of Japan, Ltd. (Trust Account)

4,352

4.61

The Dai-ichi Life Insurance Company, Limited

2,375

2.52

National Mutual Insurance Federation of Agricultural Cooperatives

2,367

2.51

Tokai Rika Employee Stock Ownership Plan

1,084

1.15

State Street Bank and Trust Company

902

0.95

Northern Trust Company AVFC Re Northern Trust Gandhi Irish Clients

818

0.86

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

797

0.84

Head office:3-260 Toyota, Oguchi-cho, Niwa-gun,
Aichi 480-0195, Japan
Tel: +81-587-95-5211

Corporations in Japan
Financial institutions
Foreign entities
Individuals
Treasury stock
Securities firms

45.2%
25.1%
12.9%
11.8%
4.2%
0.8%

Note: The Company holds 3,920 thousand shares of treasury stock but is excluded from the major
shareholders stated above.

Stock price (right scale)
Trading volume
(yen)
3,000

Stock Price and Trading Volume(thousands of shares)

Main plants and offices:
Head Plant, Toyota Plant, Otowa Plant, Hagi Plant(These 4 plants are in Aichi prefecture.)
Tokyo Office (Yokohama), Osaka Office (Osaka)
Hiroshima Office (Hiroshima prefecture)
Tohoku Technical Center (Yamagata prefecture)
Consolidated subsidiaries:
28 (8 in Japan, 5 in North America, 11 in Asia, 4 inEurope and elsewhere)
Affiliates accounted for by the equity method:
6 (3 in Japan, 1 in North America, 2 in Asia)*Chairman of the Board Kiyoshi Kinoshita

Managing Director Hitoshi Hirano*PresidentManaging Director Mikihiro Mori

Yuzo Ushiyama*Executive Vice President Kiyoshi Tsunekawa

Managing Director Hiroyuki Nakamura

Senior Managing Director Hitoshi Iwata

Managing Director Masaharu Tanino

Senior Managing Director Shoji Ishida

Managing Director Kouji Buma

Senior Managing Director Mineo Hattori

Managing Director Yoshihiro Obayashi

Senior Managing Director Tadanao Hamamoto

Director

Shinji Shirasaki

Corporate Auditor
Corporate Auditor
Corporate Auditor

Kyoji Sasazu
Mitsuhisa Kato
Masaki Horie

Corporate Officer
Corporate Officer
Corporate Officer

Masakazu Goto
Yoshihiro Tanaka
Toshimasa Yamamoto

Senior Managing Director Kenji Kawaguchi
Senior Managing Director Tadashi Wakiya
Standing Corporate Auditor
Standing Corporate Auditor

Hiroshi Nishio
Yuji Nishimura

Corporate Officer (withManaging Director status) Mikio Kato
Corporate Officer
Corporate Officer
Corporate Officer

Masaki Matsuyama
Koki Sato
Kazuhiko Noguchi

Note: Persons marked with an asterisk (*) are representative directors.

2,000

Major Overseas Consolidated Subsidiaries and Affiliates
1,000

18,00012,000
6,000
0

9

2010
4
5

6

7

8

9

10

11

12

2011
1

2

3

4

5

6

7

8

9

10

11

12

2012
1
2

3

Consolidated Subsidiaries

Affiliates

TRAM, Inc.

U.S.A.

TRP, Inc.

Philippines

TGR Technical Center, LLC

U.S.A.

TRMI, Inc.

U.S.A.

TOKAI RIKA ASIA CO., LTD.

Thailand

Shinchang Electrics Co., Ltd.

South Korea

TAC Manufacturing, Inc.

U.S.A.

TOKAI RIKA (THAILAND) CO., LTD.

ThailandSTF Co., Ltd.

South Korea

TRIN, Inc.

U.S.A.

Thai Seat Belt Co., Ltd.

ThailandMINDARIKA PRIVATE LIMITED

India

TRQSS, Inc.

CanadaTOKAI RIKA MINDA INDIA Private Limited

India

Tianjin Tokairika Automotive Parts Co., Ltd. China

PT. TOKAI RIKA INDONESIA

Indonesia

Wuxi Risho Technology Co., Ltd.

China

TRB Limited

U.K.

Foshan Tokairika Automotive Parts Co., Ltd. China

TRCZ s.r.o.

Czech

Rica Auto Parts Co., Ltd.

Tokai Rika Belgium N.V.

Belgium

TaiwanTRBR INDUSTRIA E COMERCIO LTDA. Brazil
10

Shareholder Information
Business year:
Annual general meeting ofshareholders:Record date for distributionof surplus:
Number of shares constituting
one unit of stock:
Stock code:
Transfer agent:
Agency administration
office:For inquiry/postal
address:

Listing stock exchanges:
Method of public notice:

From April 1 to March 31 of the following year
June
Year-end dividend: March 31
Interim dividend: September 30
100 shares
6995
Sumitomo Mitsui Trust Bank, Ltd.
1-4-1 Marunouchi, Chiyoda-ku, Tokyo
Stock Transfer Agent Department, Sumitomo Mitsui
Trust Bank, Ltd.
3-15-33 Sakae, Naka-ku, Nagoya
Stock Transfer Agent Department, Sumitomo Mitsui
Trust Bank, Ltd.
2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Tel: 0120-782-031 (toll free in Japan)
Website:http://www.smtb.jp/personal/agency/index.html
Tokyo Stock Exchange, Nagoya stock ExchangeElectronic public notice at http://www.tokai-rika.co.jp/
If electronic public notice is unavailable, the Company
shall post a public notice in the Nihon Keizai Shimbun.

Notice:1. Receipt of uncollected dividends
Please contact the transfer agent Sumitomo Mitsui Trust Bank, Ltd.
Please note that under the Articles of Incorporation of the Company, the Company
is not obliged to pay dividends unclaimed for three full years from the date on which
they first became payable. You are requested to collect your dividends at your earliest convenience.

2.	Address change, purchase and sale of shares constituting less than
one trading unit, and specification of the method of receiving dividends
Please contact the securities firm with which you have your securities account. If
you have a special account, please contact Sumitomo Mitsui Trust Bank, Ltd.,
which is the agent for managing special accounts.

3. Dividend Statement
A dividend statement sent by the company to shareholders upon payment of dividends
also serves as the payment advice pursuant to the Act on Special Measures concerning
Taxation. It may be used as evidence when filling a final tax return.
*Please retain the dividend statement for your final tax return.

Visit Our Website
The Tokai Rika Website provides a range of
information on the Company. Public notices arealso posted on the website. We encourage you
to visit us online.

http://www.tokai-rika.co.jp/