Business Report for Fiscal Year 2014
(From April 1, 2013 to March 31, 2014)
Stock code: 6995

To Our Shareholders
Review of Operations
Tokai Rika is grateful to its shareholders fortheir continued support.
In this business report, we present theCompany's business results for fiscal year
2014 (from April 1, 2013 to March 31, 2014)
and report on the challenges and opportunities
ahead.

Yuzo Ushiyama
President
1

In the fiscal year under review, although growth ofcertain emerging economies, such as India and Thailand
slowed, in the U.S., personal consumption andresidential investment were both robust, while in Europe,a recovery trend became apparent. In Japan, domestic
demand was boosted by rush demand before theconsumption tax hike and the economic recovery
continued. Thus, the world economy grew at a modest
pace, continued from the previous year.
In the automotive industry, while auto sales volumes incertain emerging economies such as India and Thailand
were lower than the previous year, auto sales volumes
increased in the U.S. where replacement demand issolid, in China where motorization is fueled by risingincomes, in Japan thanks to rush demand before theconsumption tax hike, and in Europe where economic
recovery gained traction. As a result, worldwide auto
sales volumes increased from the previous year.
In these circumstances, we accorded priority tostrengthening product competitiveness including quality
and reinforcing the competitiveness of each of ouroperations. Specifically, regarding quality, we promoted
initiatives to prevent recurrence of major trouble bysharing the root causes and communicating them, andalso established guidelines for integrating our quality
assurance systems throughout the world. Regarding new
products, we developed new products such as a static
heater control switch, which is installed in the Toyota
Lexus IS series, and a touchpad automotive interface,which was exhibited as a concept model at the 43rd
Tokyo Motor Show. Moreover, in view of further evolutionof automotive components, we expanded ourengineering base in the Tohoku region in order tostrengthen next-generation core technology development
focusing on the field of display consoles. Also, toreinforce the competitiveness of our operations, we
worked to establish production systems of our mainstay
product fields, namely switches, security, and safety, inIndonesia, etc., where expansion of the automotive
markets is expected.
Regarding financial results for the year under review,
net sales increased 65,875 million yen or 17.7% year on
year to 437,807 million yen. Thanks to weaker yen, in
addition to gains from high utilization due to increased
net sales and the impact of initiatives to reduce costs,
ordinary income increased 7,818 million yen or 31.9% to32,323 million yen and net income increased 12,071
million yen or 232.7% to 17,258 million yen.
The Company paid out an interim dividend of 20 yen
per share in November 2013. The year-end dividend was
26 yen per share. As a result, total dividends for the year
under review, including the interim dividend, amounted to
46 yen per share, 14 yen higher than for the previous
year.

Challenges and Opportunities
With regard to the world economy, growth of theJapanese economy is expected to slow as a result of theconsumption tax hike and in the aftermath of the rush
demand, and the pace of growth in emerging economies
will likely slow as the Chinese government is
implementing measures to control investment andhousing prices, while India and Brazil are applying tightfiscal and monetary policies. In contrast, in the U.S., both
personal consumption and residential investment are
expected to remain robust, while the recovery ofEuropean economies is expected to continue along with
export increase as the principal driver. Therefore, theworld economy is expected to continue growing at amodest pace.
In the automotive industry, auto sales volumes are
expected to be below the previous year’s level in Japanas a result of the consumption tax hike and in theaftermath of the rush demand. However, a moderateincrease in worldwide auto sales volumes is expected
because of robust sales in the U.S. and China, and risingsales in Europe.
The business environment for the Group is expected toremain challenging in view of intensifying competition in
the global automotive industry as well as the shrinking of
the Japanese automotive market, automotive
manufacturers’ strategies to adopt more module

products, and severe price competition. In thesecircumstances, the Group will pursue consistently
excellent quality, reinforcement of manufacturing globally,
development of next-generation products, strengtheningof fundamental initiatives to establish a stronger earnings
base, and strengthening of global sites. Concretemeasures include strengthening of quality improvement
activities through product design and evaluation from
customer viewpoints, creation of next-generation
products in step with the evolution of automotive
vehicles, creation of more secure, safer, cheaper anda t t r a c t i v e p ro d u c t s , a n d s t re n g t h e n i n g o f c o s tcompetitiveness through cost reduction. We will also
implement a strategy attuned to the market environmentof each site in the Group’s global network. Through thesemeasures, we intend to secure competitiveness in theyears to come and establish a stable foundation forgrowth.
In these endeavors, we request our shareholders tofavor us with their continued support and guidance.

2Consolidated Financial Highlights
Net Sales(100 million yen)

Business Performance by Geographic Region
Ordinary Income and Net Income

Ordinary Income

4,378

4,500
3,719
3,310 3,276

350

3,000

210
140

1,500

Net Sales (100 million yen)

Japan
245
203

Composition of Net Sales

200
172

149

126

2010

2011

2012

2013

Net Income per Share

2014

(Yen)

200

190.77

0

2010

2011

51

2012

2013

Return on Equity (ROE)

2014

9.3

150
2,000

income increased 598 million yen (3.6%) to

58.3%
Asia

Net sales increased 21,259 million yen (29.6%)

Composition of Net Sales

100
1,000
50

vigorous rationalization.
0

5.1

89.95
57.95

3.3

4

57.44

50

18.8%

North America

Net sales rose 19,464 million yen (28.8%) year

0

2012

2013

2014

2011

2012

2013

2014

2010

2011

1,000

100

750

75

500

50

250

25

0

on year to 86,946 million yen. Operating income

2012

2013

2014

2012

2013

2014

2012

2013

2014

2012

2013

2014

17.6%

Europe andelsewhere

Net sales surged 9,400 million yen (56.0%) year

5.3%

2012

2013

2014

0

2012

2013

2014

900

30

600

20

300

10

nearly doubled, having increased 1,296 million
yen (94.7%) to 2,664 million yen owing toComposition of Net Sales

2010

income soared 3,336 million yen (57.5%) to 9,139

increased sales.
0

0

2012

3.1

2
0

year on year to 93,028 million yen. Operating
million yen owing to increased sales.

Composition of Net Sales

8

139.54

100

3

200

3,000

(%)

10

6

0

year on year to 288,497 million yen. Operating
17,230 million yen thanks to a weaker yen and

8.2
150

Net sales increased 24,837 million yen (9.4%)

Operating Income (100 million yen)

81
52

70
0

Net Income

323

280

3,195

Results by Geographical Region(100 million yen)

2013

2014

300

12

250

11

on year to 26,183 million yen. Operating income200

of 1,141 million yen was recorded compared with

150

an operating loss of 42 million yen for the previ-

100

ous year.

50

10
1
0

0

-1

2012

2013

2014

*Net sales include intersegment sales.

4Topics

Tokai Rika’s Product Fields

Indonesian Subsidiaries TRI and TRSI Take Action to
Boost Production Capacity

Exhibiting the Latest Technologies at the 43rd Tokyo
Motor Show

In October 2013, PT. Tokai Rika Safety Indonesia (TRSI), a new subsidiary manufacturing automotive seat belts in Tangerang, Indonesia, having acquired land in
Karawang, held a ground-breaking ceremony there for construction of a new factory.

We participated in the 43rd Tokyo Motor Show held at Tokyo Big Sight in November
2013. Under the concept “The evolution of human machine interface—Easier use,safer and more secure” we introduced our latest technologies, including a presentation of the next-generation cockpit on the stage, and exhibited as a concept model,
the interface to be installed in the forthcoming Toyota Lexus cars.

In February 2014, PT. Tokai Rika Indonesia (TRI), a subsidiary in an industrial park in
Bekasi, Indonesia, held an opening ceremony at its new factory.
Plans call for the total number of employees of TRI and TRSI to exceed 500 by theend of 2015.

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. Wherever 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 the drivers' 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.

Smart Key Portable Device
and Emergency Key

Electro Shiftmatic

Vigorously and swiftly responding to customer needs, we will boost production
capacity to serve the Indonesian market that is expected to further expand.

Multi-Function Switch

Engineering Base in the Tohoku Region Expanded
In December 2013, Tokai Rika announced a plan to change the name of the Tohoku
Technical Center in Yamagata City, Yamagata Prefecture, to the Tohoku Engineering
Center, and to expand and strengthen the Company’s engineering development systems in the Tohoku region.
As automotive parts grow in sophistication and complexity, computerization andmechatronics (i.e., technology that integrates mechanical and electronic elements)
will play an increasingly important role in vehicle development. The Tohoku
Engineering Center will work on the development of next-generation core technologies, focusing on the field of display consoles, centering on image recognition technologies and Organic Electro-Luminescence (OEL) application technologies.

Push Start Switch

Immobilizer

SafetyElectronics & Others

Safety Systems

Electronics & Others
Housing Facilities and Equipment

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.

Seatbelt for Pre-Crash
Safety System

Automotive Accessories

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

Automotive Electronics
Products

Applying technologies originallyemployed in automotive
applications, we offer convenient
products meeting today's
housing-security needs.
La Lock Hallway Immobilizer Key System

Door Mirror with Side-Turn Lamp and Foot Illumination
5

Remote Key and Receiver

We are a source of vehicle
décor with design flair.
These products allow
owners to enhance theappeal of their vehicles
through customization.

Power Supply ECU

We o f f e r p r o d u c t s f o r
function control and status
detection as well as various
types of connectors in
response to the ongoing
computerization of
automobile controls.
6

Consolidated Financial Statements

Stock Information/Dividends

Consolidated Balance Sheets (Millions of yen)

Stock Information (as of March 31, 2014)

As of March
31, 2014

As of March
31, 2013

189,121

178,585

Cash and deposits

25,84027,143ASSETS
Current assets

Notes and accounts receivable

58,44650,658

Electronically recorded monetary claims-operating

9,925

10,674Marketable securities

46,19147,089Inventories

31,106

26,844

Other current assets

17,61016,174

149,814

129,454

Tangible fixed assets

88,32282,279Intangible fixed assets

1,701

1,617

Inventories and other assets

59,79045,557

Investment securities

42,09730,877

Other

17,692

14,679Total assets

338,935

308,039

Fixed assets

As of March
31, 2013

110,666
39,01817,4809,319
44,84821,601
2,615
18,986132,268

99,67452,575—
5,867
41,231
24,4895,755
18,733
124,164

188,81422,85625,225
147,302(6,569)
7,273
3,158
1,054
3,060
530
10,048
206,667
338,935

174,43122,85625,135
133,479(7,039)(381)
1,865(2,246)—642
9,182
183,875
308,039

Consolidated Statements of Income (Millions of yen)

Consolidated Cash Flow Statements (Millions of yen)

Year ended
Year ended
March 31, 2014 March 31, 2013

Year ended
Year ended
March 31, 2014 March 31, 2013

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
7

LIABILITIESCurrent liabilities
Notes and accounts payable
Electronically recorded obligations-operating
Short-term borrowings
Other current liabilities
Long-term liabilities
Long-term borrowings
Other long-term liabilities
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
Remeasurements of defined benefit plans
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

As of March
31, 2014

437,807373,146
64,661
34,54630,1152,875
667
32,323861
5,830
27,3539,191(432)
18,594
1,336
17,258371,932
320,269
51,66328,42423,2381,704
438
24,505818
15,7009,622
6,729(2,822)
5,715
527
5,187

Cash flows from operating activities

31,312

32,767

Cash flows from investing activities(40,255)(18,487)

Cash flows from financing activities(3,200)(5,005)

419

2,366

(11,724)

11,640Effect of foreign currency translation
adjustments on cash and cash equivalents
Net increase (decrease) in cash andcash equivalents
Cash and cash equivalents at beginning of year

68,11056,581

Increase (decrease) in cash and cash
equivalents resulting from changes in fiscal
year-ends of consolidated subsidiaries

—

(112)

Cash and cash equivalents at end of year

56,385Composition of Shareholders by Shareholder Type

Total number of shares
Total number of shares authorized to be issued:
Number of shares issued and outstanding:

200,000,000
94,234,171
8,830

Number of shareholders:

Treasury stock

3.9%

Major shareholders (Top 10)

Toyota Motor Corporation
Denso Corporation
Northern Trust Co. (AVFC) Re 15PCT Treaty Account
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Dai-ichi Life Insurance Company, Limited
Japan Trustee Services Bank, Ltd. (Trust
Account)
Tokai Rika Employee Stock Ownership Plan
Tokai Rika Kyoeikai
JP Morgan Chase Bank 385632
Japan Trustee Services Bank, Ltd. (Trust
Account 1)

29,367
8,839
3,123
2,597
2,275

32.42
9.75
3.44
2.86
2.51

1,927

2.12

1,135
866
793

1.25
0.95
0.87

737

0.81

1.1%

Individuals

EquityNumber of shares(thousands of shares) participation (%)

Shareholder

Securities firms

11.5%

Foreign entities

21.5%

Total number of shares

94,234,171

Corporations in
Japan

45.1%

Financial institutions

16.9%

Note: The Company holds 3,653 thousand shares of treasury stock but is excluded
from the major shareholders stated above.

Cash Dividends(Yen)

Full year

50

InterimAt the 67th annual general meeting of46

shareholders held on June 12, 2014, the

40

32
30

0

30

Company's proposal to pay the year-end

32

dividend to shareholders on the record
date of March 31, 2014, was approved.

20
10

30
16

20
14

14

2012

2013

1

Year-end cash dividend

26 yen per share

2

Effective date for year-end dividend(payment commencement date)June 13, 2014

8
2010

2011

2014

68,1108Company Information (as of March 31, 2014)
Global Network

Corporate overview

Tokai Rika is establishing globally standardized business processes in a manufacturing system consistentfrom development through to production and quality assurance.

Company name:TOKAI RIKA CO., LTD.
Establishment:
August 30, 1948

Gifu Pref.
ENA TOKAI RIKA Co., Ltd.

NSK Co., Ltd.

Tohoku Engineering Center

Head Office &Plant

RIKASEIKI CO., LTD.
Tokai Rika Create Corporation

Osaka Office

Toyota Plant
TRMAC ENGINEERING Co., Ltd.

Kumagaya Office
Hachioji Office

Hiroshima OfficePaid-in capital:
22.8 billion yen

TOKAI RIKASERVICE Co., Ltd.

6,046 (non-consolidated)

Aichi Pref.
Hagi Plant

Otowa Plant

TOKAI RIKA
ELETEC CO., LTD.

MIROKU TECHNO WOOD Co., Ltd.

Number of employees:
16,721 (consolidated)

Head office:3-260 Toyota, Oguchi-cho, Niwa-gun, Aichi 480-0195, Japan

TRCZ s.r.o.

Wuxi Risho Technology Co., Ltd.

Sales of automotive parts

Production of automotive switches,seat belts, and push start systems

Production of seat belts and molds*President

Yuzo Ushiyama

Consolidated subsidiaries:
34
Affiliates accounted for by the equity method:
7*Executive Vice President Kenji Miura

Senior Managing Director Kouji Buma

*Executive Vice President Yoshihiro Obayashi

Senior Managing Director Mikihiro Mori

Senior Managing Director Shoji Ishida

Managing Director Koki Sato

Senior Managing Director Tadanao Hamamoto

Managing Director Yoshihiro Tanaka

Senior Managing Director Kenji Kawaguchi

Managing Director Kazuhiko Noguchi

Senior Managing Director Tadashi Wakiya

Managing Director Toshimasa Yamamoto

Senior Managing Director Hiroyuki Nakamura

Director

Shinji Shirasaki

Audit & Supervisory
Board Member

Hiroshi Nishio

Audit & Supervisory
Board Member

Kyoji Sasazu

Audit & Supervisory
Board Member

Masakazu Goto

Audit & Supervisory
Board Member

Kiyotaka Ise

Audit & Supervisory
Board Member

Masaki Horie

Corporate Officer (withMikio KatoManaging Director status)

Corporate Officer

Toshiki Nogami

Corporate Officer

Shigeru Hayashi

Corporate Officer

Toshiki Akita

Corporate Officer

Isaki Sugiura

Corporate Officer

Kiyomune Hayashi

Corporate Officer

Kazuhiro Ikai

Corporate Officer

Koki Imaeda

Tianjin Tokairika Automotive Parts Co., Ltd.
Production of automotive switches
Foshan Tokairika Automotive Parts Co., Ltd.
Production of keys, locks, shift levers,
and automotive switches

TRQSS,Inc.
DAEDONG CO., LTD.

TRMI,Inc.

Production of automotive
switches, keys and locks

Production of
automotive switches

Production of seat belts

TGR Technical Center,LLC
Testing and evaluation

TRB Limited
Production of
automotive switches

Senior Managing Director Masaharu Tanino

Tel: +81-587-95-5211

SANDENZAISHA CO., LTD.

Tokai Rika Belgium N.V.

Executive Management (as of June 12, 2014)

TOKAI RIKA (THAILAND) CO., LTD.
Production of automotive switches,
keys and locks

TRAM,Inc.

MINDARIKA PRIVATE LIMITED
Production of automotive switches

TAC Manufacturing,Inc.

Holding company in North America,
sales, technology development

Production of steering wheels,keys and locks, and shift levers
TOKAI RIKA MINDA INDIA Private Limited.

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

Production of seat belts, keys and locks

Rica Auto Parts Co., Ltd.
PT.TOKAI RIKA INDONESIA

Production of automotive switches

Production of automotive switches,
keys, locks and shift levers

Production of automotive switches, keys and locks
Thai Seat Belt Co., Ltd.
Production of seat belts

9

TOKAI RIKA ASIA CO.,LTD.

PT.TOKAI RIKA SAFETY INDONESIATRP,Inc.

TRBR INDUSTRIA E COMERCIO LTDA.

Holding company in ASEAN

Production of seat belts

Production of
automotive switches

Production of automotive switches
and shift levers

Major consolidated subsidiaries
Major affiliates
Other offices

10Shareholder Information
Business year
Annual general meetingof shareholders
Record date for
distribution of surplus
Number of sharesconstituting one unit of stock
Stock code
Transfer agent
Agency administration
officeFor inquiry/postal
address

Listing stock
exchanges
Method of public
noticeFrom April 1 to March 31 of the following year
June

Visit Our Website

Year-end dividend: March 31
Interim dividend: September 30
100 shares

The Tokai Rika Website provides a range of

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 Exchange

to visit us online.

information on the Company. Public notices arealso posted on the website. We encourage you

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

Electronic 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.

Notice1. 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 that are unclaimed forthree 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 lessthan 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 filing a final tax return.
*Please retain the dividend statement for your final tax return.
Vegetable oil ink and FSC-certified paper are used for the
purpose of protecting the environment.