Business Report for Fiscal Year 2010
(From April 1, 2009 to March 31, 2010)

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 2010
(from April 1, 2009 to March 31, 2010) andreport on the challenges and opportunities
ahead.

Yuzo Ushiyama

Kiyoshi Kinoshita

President

Chairman of the Board

1

In financial results for the year under review, net sales
decreased 6,403 million yen from the previous year to
331,014 million yen. Despite appreciation of the yen andother adverse factors, ongoing rationalization ofoperations led to higher profits. Ordinary income
increased 19,352 million yen to 20,372 million yen and net
income increased 11,540 million yen to 12,603 million yen.
The Company paid out an interim dividend of 8 yen per
share in November 2009. The year-end dividend was 24
yen per share. As a result, total dividends for the year
under review, including the interim dividend, amounted to
32 yen per share, unchanged from the previous year.

Challenges and Opportunities

Review of Operations
In the fiscal year under review, the global recession
bottomed out thanks to the economic stimulus measures
implemented by various countries and a moderate
recovery took hold. In the automotive industry, althoughsales volumes decreased in the U.S. from the previous
year’s level, measures implemented by governments
contributed to rising sales volumes in Europe, China,
India, and Brazil. In Japan, despite sluggish sales at the
beginning of the year owing to a deep recession, thegovernment’s incentives in the form of tax cuts andsubsidies for purchases of environmentally friendly carsof manufacturing and also worked to raise the efficiency
of indirect operations. In order to ensure high productquality to satisfy customer expectations, despite thechallenging operating environment, we put into practicejikotei kanketsu—a concept of defect-free processcompletion to ensure that no defective product leaves
any production process. While accelerating developmentof new products for next-generation automobiles inparallel with development of the key technologies theyembody, we enhanced the supply system in emerging
economies by expanding a factor y in China andprepared for the start of operations at a new factory inIndia.

boosted sales volumes to slightly above the previous
year’s level.
In these circumstances, through emergency measures tosecure profits and a structural reform project launched at
the end of 2008, Tokai Rika Group endeavored tostrengthen product cost competitiveness and thefundamentals of subsidiaries in Japan and overseas,
w h i l e d e v e l o p i n g p ro d u c t s a t t u n e d t o s u p e r i o renvironmental performance and the needs of compact
cars. We executed SE activities to enhance the efficiency

In view of the uncertain business environment, Tokai Rika
Group forecasts sluggish automobile sales. Costs ofvehicles and parts will come under increasing pressure
as the center of gravity of the global automotive market
continues to shift toward the emerging economies,
making it more difficult to secure profits. In thesecircumstances, we intend to pursue structural reform. We
will strive to strengthen advanced development of nextg e n e r a t i o n m a i n s t re a m p ro d u c t s , e n h a n c e t h ecompetitiveness of low-cost products, and configure theoptimum production and supply chain alliance (SCA)
worldwide. Ensuring high product quality to satisfy
c u s t o m e r e x p e c t a t i o n s re m a i n s o u r k e y p o l i c y,unchanged from the previous fiscal year. For thispurpose, we intend to reinforce the quality infrastructure
by vigorously implementing initiatives to prevent quality

problems, establish a framework for global quality
assurance, and rapidly deal with any field failures thatarise.
We are resolved to make a Group-wide effort to tackle
these challenges and achieve good results with “speed,”“execution” and “follow-up” as our watchwords. At thesame time, we will strive to enhance corporate value by
fulfilling our social responsibility, including legal
compliance and social contribution.
In these endeavors devoted to the development of Tokai
Rika, we ask our shareholders for their continued
understanding and support.
June 20102

Consolidated Financial Highlights

Business Performance by Geographic Region

Ordinary Income and
Net Income

Net Sales(100 million yen)

Ordinary Income
Net Income(100 million yen)

4,400

4,500
3,634

344

350

4,051
3,374 3,310

3,000

300
250

265
216

200
148

126

100
50

0

203

179

150
1,500

212

2006

2007

2008

2009

2010

0

Net Income per Share

2006

2007

2008

2009

2010

Return on Equity (ROE)

(yen)

250

1010

(%)

20

236.26150

139.54
10

100

11.77
0

3

2006

2007

2008

2009

2010

0

Net sales increased 1,883 million yen(3.4%) year on year to 57,507 million yen.
Despite the impact of appreciation of theyen, operating income of 1,496 million yen
was recorded, an improvement of 4,339
million yen from the operating loss for theprevious year, owing to higher sales andthe impact of rationalization.

Europe and Others

550

North America

Net sales increased 77 million yen (0.2%)
year on year to 50,453 million yen.
Operating income increased 49 million yen(0.7%) year on year to 7,189 million yen
thanks to the impact of rationalization.

15

165.98Net sales decreased 1,714 million yen(0.7%) year on year to 244,399 million yen.
Despite lower sales and the impact of theappreciation of the yen, operating incomeof 7,840 million yen was recorded, an
improvement of 12,570 million yen from theoperating loss for the previous year, owing
to thorough rationalization.

Asia

197.45

200

Japan

2006

2007

2008

2009

2010

Net sales decreased 2,693 million yen(14.3%) year on year to 16,100 million yen.
D e s p i t e t h e d e c re a s e i n n e t s a l e s ,operating income increased 795 million
yen (567.4%) to 935 million yen thanks to
the impact of rationalization.

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

13.7%

4.4%

• North America

15.6%• Japan

66.3%

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

4,000

1,000

1,000

400

3,000

750

750

300

2,000

500

500

200

1,000

250

250

100

0

0

2008

2009

0

0

2008

2010

2009

2010

2008

2009

2008

2010

2009

2010

*Net sales include intersegment sales.

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

300

40

100

200

20

75

100

0

0

△20

• Europe and Others
15

10
50
5
25

△40

△100

2008

2009

2010

2008

2009

2010

0

0

2008

2009

2010

2008

2009

2010

4

Topics

Tokai Rika’s Product Fields

Technology Development Award from Toyota Motor

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 three domains where people andautomobiles intersect, we deliver comfort, safety and security by fully utilizing the underpinning electronics technologies.

At Toyota Motor Corporation’s global supplier convention held in February this year, Tokai
Rika’s Hydrogen Leak Tester received the Technology Development Award in recognitionof its unique advanced technology. Use of this Hydrogen Leak Tester on production lines
for plug-in hybrid vehicles will contribute to improvement of productivity.

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 antitheft functions ensure both security and ease ofuse.
Electro Shiftmatic

Construction completed of TRMN, a new factory in India
TOKAIRIKA MINDA INDIA Private Limited(TRMN), established in August 2008, is
our second production base in India.
Following completion of the constructionof TRMN’s plant, a handover ceremony
was held on February 27. Facilities andequipment will be installed in preparation
for trial mass production in the run-up to
the start of full-scale operation of thefactory scheduled for November 2010.

We are now expanding the facilities of Foshan Tokairika Automotive Parts Co.,
Ltd. (TRCF), our manufacturing subsidiary in Guangdong province, China, following postponement of the project in response to the drastic deterioration of
the operating environment inautumn 2008. We aim to increase
the plant's production capacity by
50% to strengthen our ability tosatisfy the needs of the rapidly
evolving market in China. The
work is scheduled for completionin September 2010.

Second semiconductor plant up and running
Following the completion of our second semiconductor plant, we have been expanding production output of intelligent sensors (for highly reliable non-contact switches applied in hybrid vehicles and electric vehicles, for shifters,
and for paddle switches) and custom ICs (for immobilizers etc.). As production has switched to two shifts (day andnight), the capacity utilization rate has reached the initial level anticipated in the plan. The factory is scheduled to be
operating at full capacity by 2012. By leveraging advances in ICs and sensor technologies for automotive applications, we intend to continue to offer our customers compact, sophisticated, highly reliable products for automobiles
that are increasingly reliant on computerized controls.
5

Smart Key Portable Device
and Emergency Key

Expansion of TRCF, a subsidiary in Guangzhou

Multi-Function Switch

Push Start Switch

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 forexcellent handling, and mirrors that enable toenhance visibility.

Door Mirror with Side-Turn
Lamp and Foot Illumination

Immobilizer◆ Automotive Electronics
Products◆ Housing Facilities and Equipment

Seatbelt Equipped with
Pre-Tensioner

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

Applying technologies originallyemployed in automotive applications, we offer convenient Power Supply ECU
products meeting today’s We offer products forhousing-security needs.
function control and status detection as well as
La Lock, Hallway Immobilizer Key Systemvarious types of connec◆A utomotive Accessories We are a source of vehicle tors in response to thedecor characterized by continued computerization
design flair. These prod- of controls in automobiles.
ucts allow owners toenhance the appeal of
their vehicles through customization.
6

Consolidated Financial Statements

Non-consolidated Financial Highlights

Consolidated Balance Sheets (Millions of yen)

Ordinary Income and
Net Income

Net Sales
As of March
31, 2010

As of March
31, 2009

ASSETS
Current assets

151,620

97,523

Cash and cash equivalents

23,484

16,060Notes and accounts receivable

59,79635,766

Marketable securities

34,811

12,564Inventories

21,64020,349Other

11,887

12,782

Fixed assets

118,117129,061

74,11380,057

Buildings and structures

27,933

27,689Other

46,17952,367

2,518

3,136

Tangible fixed assets

Intangible fixed assets
Investments and other assets
Total assets

41,48545,867

269,737

226,584

Consolidated Statements of Income (Millions of yen)

As of March
31, 2010
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
Valuation and translation adjustments
Net unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

7

331,014283,60747,406
29,374
18,032
2,847
506
20,372
14
54
20,331
5,605
1,409
713
12,60379,78946,25010,34923,18926,397
8,286
17,094
1,014
106,187

56,63028,928
7,741
19,95919,574
1,308
17,360905
76,204

164,189
22,85625,134
123,234(7,035)(4,908)507(5,415)524
3,744
163,550
269,737

153,069
22,85625,142
112,118(7,047)(6,246)(1,322)(4,923)360
3,196
150,379
226,584

337,417
302,710
34,70633,895
811
1,795
1,586
1,020
1
118
902
132
(1,034)741
1,063(100 million yen)(100 million yen)

3,500
3,000

2,809

3,023

250

3,226

2,500

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Effect of foreign currency translation
adjustments on cash and cash equivalents
Net increase in cash and cash equivalents

32,650(9,213)
5,612

20,066(25,253)(3,720)271(1,667)

29,320(10,574)

Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents fromnewly consolidated subsidiary
Decrease in cash and cash equivalents resulting
from exclusion of subsidiaries from consolidation
Increase in cash and cash equivalents
resulting from merger
Cash and cash equivalents at end of year

25,00835,419

−

80

−

(12)

−

94

54,32925,008

190

2,482
150

2,000

127

100

1,500

129

124

117

87

78

50

1,000
500

0

0

-50

2006

2007

2008

2009

Cash Dividends

50

Year ended
Year ended
March 31, 2010 March 31, 2009

235

200
2,481

2010

-23 -29
2006

2007

2008

2009

2010

Year-end Cash Dividend

Full year
Interim(yen)

Consolidated Cash Flow Statements (Millions of yen)

Year ended
Year ended
March 31, 2010 March 31, 2009
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
Minority interests in income
Net income

As of March
31, 2009

Ordinary Income
Net Income

At the 63rd annual general48

meeting of shareholders held on
June 22, 2010, the Company’s

40
34
30

26

32
23

proposal to pay the year-end

32

dividend to shareholders on therecord date of March 31, 2010,24

was approved.

20
12

14

10
0

1

Year-end cash
dividend

24 yen per share

2

Effective date (Dateon which payment ofyear-end dividends
starts)June 23, 2010

8

2006

2007

2008

2009

2010

8

Stock Information

Corporate Profile(as of March 31, 2010)

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

10,324(as of June 22, 2010)

Paid-in capital:

22.8 billion yen

Number of employees:

15,028 (consolidated)
6,054 (non-consolidated)

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

Main plants and offices:

Head Plant, Nishibiwajima Plant, Toyota Plant, Otowa Plant,
Hagi Plant (These 5 plants are in Aichi prefecture)
Tokyo Office (Yokohama), Osaka Office (Osaka), Hiroshima Office (Hiroshima prefecture)
Tohoku Technical Center (Yamagata prefecture)

Major shareholders (Top 10)
Number of shares

Shareholder

Equity(thousands of shares) participation (%)

Toyota Motor Corporation
Denso Corporation
Japan Trustee Services Bank, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Dai-ichi Mutual Life Insurance Company
Japan Trustee Services Bank, Ltd. (Trust Account 9)
Tokai Rika Employee Stock Ownership Plan
Trust & Custody Services Bank, Ltd. (Securities
Investment Trust Account)
CB London RE Fund 116
Aioi Insurance Co., Ltd.

29,367
8,839
8,637
4,722
2,375
1,014
834

31.16
9.38
9.16
5.01
2.52
1.07
0.88

805

0.85

799
730

0.84
0.77

Consolidated subsidiaries:

Corporations in Japan 45.2%
Financial institutions 27.2%
Individuals
11.5%
Foreign entities
11.4%
Treasury stock
4.1%
Securities firms
0.6%

Stock Price and Trading Volume

3,000
1,000

18,00012,000
6,000

9

5

6

7

8

•M
 ain Overseas Consolidated Subsidiaries andAssociated Companies

Stock price (right scale)
Trading volume
(yen)
5,000

(thousands of shares)2008
4

28 (8 in Japan, 6 in North America, 10 in Asia, 4 in Europe and elsewhere)

Affiliates accounted for by the equity method: 6 (3 in Japan, 1 in North America, 2 in Asia)

Notes: 1. T he Company holds 3,910 thousand shares of treasury stock but is excluded from the major
shareholders listed above.
2. The Dai-ichi Mutual Life Insurance Company changed its trade name to The Dai-ichi Life Insurance
Company, Limited as of April 1, 2010.

0

Directors and Corporate Auditors

Corporate Overview (as of March 31, 2010)

9

10

11

2009
12
1

2

3

4

5

6

7

8

9

10

11

2010
12
1

2

3

Chairman of the Board

Kiyoshi Kinoshita

President

Yuzo Ushiyama

Executive Vice President

Takaoki Tsuchiya

Executive Vice President

Shigeru Kato

Senior Managing Director

Yoshiteru Sasaki

Senior Managing Director

Takafumi Mizuno

Senior Managing Director

Kiyoshi Tsunekawa

Senior Managing Director

Makoto Goto

Senior Managing Director

Hitoshi Iwata

Managing Director

Mineo Hattori

Managing Director

Shoji Ishida

Managing Director

Tadanao Hamamoto

Managing Director

Hitoshi Hirano

Managing Director

Mikihiro MoriManaging Director

Kenji Kawaguchi

Director

Hiroyuki Nakamura

Director

Tadashi Wakiya

Director

Kouji Buma

Director

Yoshihiro Obayashi

TOKAI RIKA (THAILAND) CO., LTD.

Thailand

Director

Masaharu Tanino

TRAM, Inc.

U.S.A.

Thai Seat Belt Co., Ltd.

Thailand

TRMI, Inc.

U.S.A.

TOKAI RIKA MINDA INDIA Private Limited

India

Director

Masaki Matsuyama

TAC Manufacturing, Inc.

U.S.A.

TRB Limited

U.K.

Director

Kouki Sato

TRIN, Inc.

U.S.A.

TRCZ s.r.o.

Czech

Quality Safety Systems Company

CanadaTokai Rika Belgium N.V.

Belgium

Full-time Corporate Auditor

Kazuhisa Kubota

Full-time Corporate Auditor

Hiroshi Nishio

Corporate Auditor

Yoshio Uesaka

Corporate Auditor

Mitsuhisa Kato

Corporate Auditor

Shinji Shirasaki

Consolidated Subsidiaries

Tianjin Tokairika Automotive Parts Co., Ltd. China

TRBR INDUSTRIA E COMERCIO LTDA. Brazil

Wuxi Risho Technology Co., Ltd.

Associated Companies

China

Foshan Tokairika Automotive Parts Co., Ltd. China

TGR Technical Center, LLC

U.S.A.

Rica Auto Parts Co., Ltd.

TaiwanShinchang Electrics Co., Ltd.

Korea

TRP, Inc.

Philippines

STF Co., Ltd.

Korea

TOKAI RIKA ASIA CO., LTD.

ThailandMINDARIKA PRIVATE LIMITED

India

10

Shareholder Information
Business year:
Annual general meeting ofshareholders:Record date for distributionof surplus:
Number of shares constituting
one unit of stock:
Stock code:
Registration of transfer ofshares:Transfer agent:
Agency administration
office: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

The Chuo Mitsui Trust and Banking Co., Ltd.
3-33-1 Shiba, Minato-ku, Tokyo
Stock Transfer Agent Department, Nagoya Branch,
The Chuo Mitsui Trust and Banking Co., Ltd.
3-15-33 Sakae, Naka-ku, Nagoya 460-8685, Japan
Tel: 0120-78-2031 (Toll free in Japan)
Tokyo Stock Exchange, Nagoya Stock ExchangeElectronic public notice
If electronic public notice is unavailable, the Company
shall post a public notice in the Nihon Keizai Shimbun.
(Public notices will be posted on the following website)
http://www.tokai-rika.co.jp/

Notice:1. Receipt of uncollected dividends
Please contact the transfer agent indicated above.

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 The Chuo Mitsui Trust and Banking
Co., Ltd., which is the agent for managing special accounts.
•Toll-free number: 0120-87-2031 (24 hours, automated voice guidance)•Website: http://www.chuomitsui.co.jp/person/p_06.html

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 Measuresconcerning Taxation. It may be used as evidence when filing a final tax return. Starting
this year, the Company also sends a dividend statement upon payment of dividends
to shareholders who receive dividends with a dividend warrant.
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/