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Tokai Rika Co.,Ltd Business Report for Fiscal Year 2006 (From April 1, 2005 to March 31, 2006) Turn the delight into reality 010_0493302981807.indd 1 2006/07/20 17:14:13 To Our Shareholders Tokai Rika is grateful to its shareholders for their continued support. Business Philosophy In this business report, we present the Company’s business results for fiscal year 2006 (from April 1, 2005 to 1. To create products that satisfy customers and to contribute to a higher quality of life. March 31, 2006) and report on the challenges and opportunities ahead. 2. To build an energetic and promising business organization by nurturing the spirit of originality, enthusiasm and innovative challenges. 3. To honor the language and spirit of the law and the ethics of every nation, and to work in harmony with nature and local communities. Review of Operations Challenges and Opportunities During the year under review, the world economy In collaboration with Toyota Motor Corporation, Tokai Tokai Rika Group is reinforcing its management remained generally robust largely due to strong Rika developed a Key Integrated Watch—the world’s infrastructure and enhancing its comprehensive growth in China and in other emerging economies, first watch incorporating an integrated Smart Key capabilities in order to offer products satisfying despite mounting uncertainties such as the feature, which allows the user to lock and unlock the customers around the world. To secure stable growth economic impact of major hurricanes that struck the door, as well as start the engine, simply by wearing and seize opportunities for further growth and Gulf Coast of the U.S. and the softening of domestic it. prosperity of Tokai Rika Group, we intend to tackle demand in Europe. four principal issues: Financial results on a consolidated basis for the year 1. To ensure quality and propose attractive In Japan as personal consumption and capital ended March 31, 2006, were as follows: products fulfilling customer expectations investment rose led by vigorous corporate earnings, 2. To strengthen measures for improving Year-on-year Year-on-year Amount the Japanese economy continued to enjoy a change % change profitability moderate recovery underpinned by strong domestic 363,423 An increase of 3. To enhance infrastructure in order to lay a solid Net sales Up 12.9% and foreign demand. million yen 41,561 million yen foundation for growth Operating 19,795 An increase of Up 19.2% 4. To engage in vigorous corporate citizenship Kiyoshi Kinoshita Yoshihei Iida income million yen 3,195 million yen In the automotive industry, sales of automobiles in Ordinary 21,671 An increase of activities President Chairman of the Board Up 18.8% emerging economies, notably China and the ASEAN income million yen 3,423 million yen In these endeavors, we request your continued 14,846 An increase of countries, surged while sales in the U.S. and other Net income Up 32.5% support and guidance. advanced counties remained upbeat. Led by brisk million yen 3,644 million yen sales of light vehicles, sales of automobiles in Japan Cash dividends for the full year amounted to 26 yen June 2006 were higher than the previous year’s level, despite per share, an increase of 6 yen compared with the sluggish growth in sales of passenger cars. previous year, consisting of the interim dividend of 12 Additionally, exports to North America were buoyant. yen per share paid in November 2005 and the year- As a result, automobile output in Japan surpassed end dividend of 14 yen per share. the previous year’s level. In these circumstances, Tokai Rika Group began reshaping the production and logistics systems of the Head Plant. Overseas, improvement of production systems progressed, such as establishment of Foshan Tokairika Automotive Parts Co., Ltd., the Company’s third plant in China, which started operation in May 2006, and expansion of subsidiaries’ factories in Thailand. 1 2 010_0493302981807.indd 1-2 2006/07/27 3:29:36 Tokai Rika’s Product Fields New Product Development Leads Innovation in Automotive Technologies With a sharp focus on comfort, safety and security, we are working in the three domains where people and Tokai Rika has long been a source of innovative products contributing to comfort, safety and security of automobiles intersect: human/machine interface to accurately relay human commands, security devices to automobiles. We harness the tremendous potential of electronics and other sophisticated technologies to fulfill our prevent unauthorized access to automobiles and safety systems to protect human lives. mission, namely, to “Turn the delight into reality.” Switch Security Safety Others Human-machine interface Security systems Safety systems Others Easy-to-use parts that accurately convey Sophisticated mechanical and Our safety systems protect drivers and Switch drivers’ commands offer precise operability electronic antitheft functions ensure passengers in the event of collision. Fully utilizing dynamic collision testers, a high From technology that compels people to adapt and functional elegance. security and ease of use. level of safety is guaranteed. We also to technology attuned to human needs provide functional products that enhance visibility. • Ergonomics (human- machine interface) • Electrical contact/ mechanical technology Wheel cover • New operational/ Shift levers display devices Key-integrated watch Multi-modal & Next-generation customized cockpit input device Seatbelt with motorized retractor Multi-function switches Hallway smart key Electronics Steering lock Enhancement of product competitiveness by capitalizing Security on prowess in electronics technology Push start switch Safety From a mechanical key to owner authentication Airbag steering wheel From collision safety to preventive safety achieving superb security and convenience Window lock monitoring system • Encryption/authentication • Passenger/vehicle status technology Police stations, fire stations, hospitals detection technology Smart entry & start system • Radio-based ID Vehicle exteriors Security center Exteriors with unique design, including authentication • Vehicle surroundings Center cluster wheel covers, half caps, center caps and • Person authentication Mobile phones monitoring technology emblems, enhance the attractiveness of and biometrics vehicles. • Road-to-vehicle and vehicle- • Remote monitoring Interior mirror with an integrated electronic Vehicle electronic devices to-vehicle communication toll collection (ETC) terminal Our products to control functions and to detect vehicle status are at the forefront of the shift toward greater electronics content in vehicles. 2 Housing equipment and systems Hallway smart keys and window lock monitoring systems are examples of applications of Tokai Rika’s electronic and Alarm for obstacles ahead Power window switches Immobilizer system Door mirror with an integrated turn-signal indicator radio technologies to security and comfort in the housing field. 3 4 010_0493302981807.indd 3-4 2006/07/27 3:30:07 Overseas Business Development Ever since we established our first manufacturing subsidiary in North America in 1986, Tokai Rika has been expanding China its network of facilities from a global perspective. As well as deploying product development systems attuned to the needs of major markets, we are working to optimize our production and quality assurance systems worldwide. B u s i n e s s 1 Tianjin Tokairika Automotive Parts Co., Ltd. Production and sales of automotive switches, key locks 2 Wuxi Risho Technology Co., Ltd. Production and sales of automotive seatbelts Sales by Geographical Sales in Japan Sales in North America Sales elsewhere 1 Region 3 Suzhou Huachang Mechanical and Electrical Co., Ltd. Production and sales of automotive switches and key locks 2 (100 million yen) (100 million yen) (100 million yen) 3 4 Foshan Tokairika Automotive Parts Co., Ltd. Production and sales of automotive switches and key locks 3,000 900 600 4 Consolidated subsidiary 2,000 600 400 Affiliate 1,000 300 200 0 0 0 Asia 2004 2005 2006 2004 2005 2006 2004 2005 2006 B u s i n e s s 1 2 1 Shinchang Electrics Co., Ltd. Production and sales of automotive switches and key locks Foshan Tokairika Automotive Parts Co., Ltd. Starts Operation 2 STF Co., Ltd. Development and production of electronic units for automotive parts Topics 3 Foshan Tokairika Automotive Parts Co., Ltd., a 4 3 Mindarika Private Limited Production and sales of automotive switches manufacturer of security systems, switches and 5 4 Rica Auto Parts Co., Ltd. Production and sales of automotive switches and key locks 6 electronics products in China, started operation in 7 5 TRP, Inc. Production and sales of automotive switches May 2006. 6 Tokai Rika (Thailand) Co., Ltd. Production and sales of automotive switches and key locks Consolidated subsidiary 7 Thai Seat Belt Co., Ltd. Production and sales of automotive seatbelts Affiliate Foshan Tokairika Automotive Parts Co., Ltd. Subsidiaries and Affiliates North America and South America Europe 5 1 2 6 B u s i n e s s 3 4 1 TRAM, Inc. North American headquarters, sales of products of subsidiaries in North America, technology development 2 TRMI, Inc. Production of automotive switches B u s i n e s s 1 TRB Limited Production and sales of automotive switches 3 TAC Manufacturing, Inc. Production of automobile steering wheels, airbags and shift levers 1 2 Tokai Rika Belgium N.V. Sales of automotive parts 4 Production of automotive switches 2 TRIN, Inc. 3 3 TRCZ s.r.o. Production and sales of automotive switches, key locks, seatbelts and other parts 5 Quality Safety Systems Company Production and sales of automotive seatbelts 6 TGR Technical Center, LLC Testing and evaluation of safety products Consolidated subsidiary 7 TRBR Industria e Comercio Ltda. Production and sales of automotive switches Consolidated subsidiary Affiliate Affiliate 7 5 6 010_0493302981807.indd 5-6 2006/07/27 3:30:25 Consolidated Financial Statements Consolidated Balance Sheets Assets Liabilities (Millions of yen) (Millions of yen) As of March As of March As of March As of March Current assets ( 31, 2006 ) ( 31, 2005 ) ( 31, 2006 ) ( 31, 2005 ) Total liabilities were 104.9 billion yen at the year-end, having increased 3.9 billion yen from the previous year-end.
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