Investors Guide Year ended March 31, 2013

P A C I F I C R E P O R T Investors Guide Year ended March 31, 2013 Contents 01 Profile 03 Review from President & CEO 05 Review of Operations 07 M...
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P A C I F I C R E P O R T Investors Guide

Year ended March 31, 2013

Contents 01 Profile 03 Review from President & CEO 05 Review of Operations 07 Management 09 Performance Highlight Back Cover Company and Stock Information

Profile

PACIFIC GLOCAL VISION 2020

VISION and MISSION

Five meanings of “SHINKA”

As a Global Manufacturer of Technology Components

1 2 3

We will endeavor to develop and enhance technologies and to supply high quality

Deepening

Developing

(Shinka)

products in response to the needs of customers.

Triangle of CSR

(Shinka)

Corporate Brand

Stronger trust

Corporate ethics fulfills CSR

(Shinka)

We value our employees as our essential family members and pledge to provide a place where they enjoy working and creating

Evolution

We will continue to contribute to society, confirming our role in the world as an excellent company as well as an environmentally conscious company.

“Deepening”

(Shinka) Strength to improve

“Evolution”

(Shinka) Strength to innovate

“Developing”

(Shinka) Strength to launch

We Continue to Pursue a Truly Glocal Management

True worth

(Shinka)

new technologies and businesses “True worth”

(Shinka) Strength to enhance

corporate value “Stronger trust” (Shinka) Strength to win stakeholders’ confidence

The Pacific Industrial Group is an automotive parts supplier consisting of 10 companies in different countries. The Group continues to pursue truly “glocal management” in harmony with local communities and the environment. We have two primary core businesses. The first is our tire valve products business, on which Pacific Industrial was founded and which now holds the dominant share of the market. Secondly is our stamping and molding product business, which is highly-reputed as a specialized manufacturer with advanced processing techniques.

T P MS: Contr i b u ti ng to Au tomob i le Safe ty, Secu r i ty, a nd Gl ob a l Wa r mi ng Preve n tio n Va l ve core

Th e Crown e q u i p p e d w i t h t h e Gro u p’s en g in e c ove r, ba tte r y c a s e , e t c . A comprehensive manufacturer of a u t o m o t i v e p re s s e d re s i n p ro d u c t s , including battery cases for hybrid cars, oil pans, wheel caps, and engine covers. With our market leading technology we promote manufacturing that contributes to the realization of a low-carbon society.

The Group has captured 100 percent of the tire valve market in Japan, and over 20 percent of the market globally. We are proud of our ability to produce products known throughout the world as being of the highest quality and technological capacity. We are the only manufacturer in Japan supplying, on an OEM basis, the next generation valve “TPMS” that has become compulsory by law in the United States, Europe, and South Korea.

Currently in place, our Medium-Term Management Plan, known as “OCEAN-15” serves as our concrete action plan. It establishes FY2015 as the pivotal year for accomplishments that will propel us toward our long-term vision “PACIFIC GLOCAL VISION 2020”. OCEAN-15 identifies 3 strategies; 2011 Result

11%

Tire Valve Business

17% 35%

12%

Tire Valve Business

Net sales 795 billion yen

Overseas

1999

PACIFIC INDUSTRIAL CO. (unlimited partnership) was founded to manufacture valve cores for automobiles.

Listed in the TOKYO and NAGOYA STOCK EXCHANGES, 1st Sections. Received TOYOTA SUPERIOR QUALITY CONTROL AWARD from Toyota Motor Corp.

Developed TPMS (T ire Pressure Monitoring System) transmitter.

1946 Started production of metal stamped parts for automobiles as a supplier to Toyota Motor Corp.

01

1984-1989 Expanded the valve business overseas (Taiwan, Korea, USA, Thailand).

1999-2012 Expanded the stamping and molding business overseas (USA and China).

Consolidated ordinary income Rate

Target of 2015

Other 1%

TPMS Business

Other 1%

TPMS Business

“Technology & Overseas”, “Manufacturing is About Developing People” and “CSR & Environment Preservation”. Based on these key themes and by emphasizing the five meanings of SHINKA, we will put into practice a variety of measures to achieve our long-term vision.

2015 Goal

17%

Consolidated sales

Overseas

40% Net sales 950 billion yen

Japan 65%

95

Japan 60%

Stamping and Molding Business

71%

billion yen

Stamping and Molding Business

Oversea sales

Total assets turnover ratio

6

%

40 1.05 Above

%

70%

Net sales

Ordinary income

( ¥ million )

( ¥ million )

100,000

6,000

83,700

80,000

1970

The business environment surrounding the Pacific Industrial Group has been changing dramatically and at an unexpectedly rapid pace. Examples of these changes include: the sudden global structural switch within the automobile industry, global environmental and energy problems, corporate social responsibility, globalization, and technological innovation. Recognizing these changes as a great opportunity, we have decided to make clear our dreams and mission by drawing up our longterm vision known as “PACIFIC GLOCAL VISION 2020”. This plan will serve as a milestone as we approach the 100th anniversary of our foundation in 2030. This “long-term vision”, emphasizes CSR as a most vital management issue as well as ongoing innovation within our business structure. We will practice the “five meanings of ‘SHINKA’” as we shift to “Amalgamated Business Management” in pursuit of improved corporate value.

OCEAN-15

History 1930

Human Resources Development

Manufacturing

(Shinka)

EBITDA

5,372

5,000

( ¥ million )

15,000

11,520

12,000

4,000 60,000

3,000

40,000

2,000

9,000 6,000

1,000 20,000 0

3,000

0 2009

2010

2011

2012

2013

(1,000)

2009

2010

2011

2012

2013

0

2009

2010

2011

2012

2013

Forward-Looking Statements This Report contains information about forward-looking statements related to such matters as the Company’s plans, strategies, and business results. These forward looking statements represent judgments made by the Company based on information available at present and are inherently subject to a variety of risks and uncertainties. The Company’s actual activities and business results could differ materially from those anticipated in these statements.

Pacific Industrial Co.,Ltd. PACIFIC REPORT 2013

02

Review from President & CEO Our President & CEO talks about the Medium-Term Management Plan and its progress

Seeking to be a truly management that

glocal company, we are dedicated to combines quality with “robust energy”.

I would like to express my sincere appreciation for your constant understanding and support for our Group. At this time, we have decided to issue an Investor’s Guide to serve as a reference for investment and to allow investors from other countries to deepen their understanding of the Group. We will continue to actively disclose information, and welcome your frank comments.

Shinya Ogawa President and Chief Executive Officer

Technology & Overseas

The manufacturing SHINKA that create global quality In order to build an automobile society that can sustain both people and the earth, we will continue to manufacture high quality products based on safety, environmental soundness, and comfort. We will press ahead with technological developments to respond to the diverse needs of our customers, while striving for manufacturing and service improvements to achieve the world’s highest quality.

World’s first engine cover utilizing chemical-foam molding and coating-free technology

Pop-up hood hinge designed for collision safety

Dual tub oil pan contributes to improved fuel costs Received “TOYOTA TECHNOLOGY & DEVELOPMENT AWARD” and the “Automotive Component Award” of the “CHO” MONOZUKURI Innovative Parts and Components Award

With these initiatives, we are accelerating the reorganization

on matters including internal control, the business continuity plan

Specific measures for expansion of overseas business include

and expansion of business bases in Japan and overseas while

(BCP), reduction of the environmental load, and emphasis on

commencing production of wheel caps and other resin products

stepping up selection and concentration of various efficient

diversity.

for automobiles at Pacific Industries (Thailand) Co., Ltd. in

business enterprises.

In light of the major earthquake experienced in the Nankai Trough,

Thailand. In addition, by unifying production and strengthening capacity for tire valve products, we intend to expand this base as our No. 2 valve production center after Japan. With the start of local production of TPMS (Tire Pressure

About the Medium to Long-term Management Plan

03

we drew up a business continuity plan (BCP) in FY2012, putting

Manufacturing is About Developing People

in place measures at each base with the goal of being able to restore production within 30 days of sustaining damage in a disaster. Response measures being implemented include back-

Monitoring System) transmitters at Pacific Manufacturing Ohio Inc.

As globalization of our business picks up speed, and in order to

up systems and multiple supply chains at companies overseas.

in the United States, in combination with our Japan operations,

pursue further growth, it is essential to enhance manufacturing

The Group has long been striving to preserve the global

we established a two-base production system. This makes it

capability and to develop the human resources that can make that

environment through efforts to reduce the volume of CO2 and

possible to avoid risks related to exchange rates, natural disasters,

happen.

VOC emissions. As a new initiative, we invested in natural energy

or fluctuations in production. A sales subsidiary was established

With the stimulation of quality control group activities, the

by installing a solar power generation system at the Higashi Ogaki

in Belgium in response to legislation making TPMS compulsory

Group seeks to create a mechanism whereby people develop

Plant in March 2013.

in Europe, and the export and delivery of TPMS produced in the

by exercising their ingenuity at the workplace, thus leading to

With the acceleration of overseas development, pursuit of diversity

Under “OCEAN-15”, we have set targets of consolidated net

United States will begin in 2014.

continuous quality improvement and increased production. In

and an environment in which it is easy to work have become

sales of 95,000 million yen, a ratio of ordinary profit in the 6%

We are also pressing ahead with overseas localization and

the future, we will shift from entry-level “education” to “training”

important elements of employee management. We are engaged

range, and overseas net sales ratio of over 40%, as we seek to be

customer diversification as a means of enhancing our global

in which the contents of the education will be learned through

in workplace activities that emphasize work-life balance and

a “leading parts manufacturer, both globally and locally”. Based on

competitiveness. At Tianjin Pacific Auto Parts Co., Ltd. in China,

experiential methods.

human rights, and are making efforts to create an open company

the keywords “Technology & Overseas”, “Manufacturing is About

the Group sought to improve cost competitiveness through the

Furthermore, as the overseas business expands, development

culture.

Developing People”, and “CSR & Environmental Preservation”,

local procurement of dies and facilities, and this company has

of global human resources is becoming an urgent task. We will

we will put into practice a variety of measures to achieve the long-

started to do business with a local Chinese manufacturer, Great

develop entry level employees by implementing a curriculum

Amid accelerating globalization, and in keeping with our

term vision. We will emphasize the “five meanings of SHINKA:

Wall Motor Company Limited. Furthermore, Changsha Pacific

specifically targeted for global perspectives, including selective

longer term vision, we will dedicate ourselves to “high impact”

Deepening, Evolution, Updating, True Worth, Stronger Trust”.

Hanya Auto Parts Co., Ltd., which was established in Hunan

education and strategic rotation. Meanwhile, by bringing human

management combined with quality, with an emphasis on human

In order to win out against intensifying global competition amid the

Province as our second base in China, has commenced deliveries

resources from overseas companies to Japan, we will cultivate the

resources development and CSR. We would like to ask for your

rise of emerging nations, rapidly declining domestic production,

to GAC Mitsubishi Motors Co., Ltd., and its own plant will be

local leaders of the future.

continuing guidance and support in that endeavor.

and an accelerated trend toward local production for local

completed in January 2014.

consumption, the Group is enacting key action steps. We are

We will further expand the plant and enhance the production

enhancing and expanding overseas operating bases, promoting

infrastructure at Pacific Air Control Co., Ltd. in South Korea, which

customer diversification and localization, and shifting from

developed the first aluminum die casting business within the

In our medium to long-term vision, CSR is positioned as the most

“defensive to offensive” management.

Pacific Industrial Group.

vital management issue, and the Group is promoting initiatives

CSR & Environment Preservation

Shinya Ogawa President and Chief Executive Officer

Pacific Industrial Co.,Ltd. PACIFIC REPORT 2013

04

Review of Operations

Analysis of Financial Results

(663 million yen) as an extraordinary loss.

During the fiscal year under review, despite a temporary trend

The year-end dividend initially had been set at 5 yen per

toward economic recovery following the Great East Japan

share. However, in light of the business results for the fiscal

Earthquake, the business environment remained harsh.

year and other factors, we have decided to make a 1 yen

This is due to factors such as prolonged fiscal uncertainty in

increase in the dividend to 6 yen per share for a full-year

Europe and a slowdown in economic growth in China and

dividend of 11 yen.

Stamping and Molding product business segment Stamping products

71.3%

Molding products

other emerging nations. Relatively positive signs began to appear towards the end of the fiscal year as expectations of the new government’s economic measures led to progress

Outlook for FY 2013

such as correction of the strong yen and recovery of stock

Regarding the economic outlook, although positive signs

prices.

towards a mild recovery began to appear, the situation is

Although the automotive business, the Group’s core business

expected to remain uncertain amid concerns that include the

field, was affected by the elimination of the subsidies for eco-

European debt issue, the trend toward a slowdown in the

friendly cars in Japan, production grew for fuel-efficient cars.

world economy, rising costs for materials such as crude oil,

Sales in the United States rose steadily as the economy

and fluctuations in the exchange rate.

recovered. In China, however, automobile production, by

In the automobile-related industry to which the Group

our main customers, fell compared to the previous fiscal

belongs, although sales can be expected to increase in

year due to the influence of boycotts of Japanese brand

emerging markets, significant growth cannot be anticipated

products. This had considerable impact, as we were forced

in the Japanese market. In addition, competition among

45,000

to temporarily suspend operations and adjust production at

companies is predicted to intensify in the future amid rising

30,000

both subsidiaries in China, in addition to reducing production

levels of quality and safety demands while sales prices

15,000

in Japan.

decline steadily.

In such circumstances, the Group endeavored to improve

In these circumstances, the Group will take all possible

profits by working on technological developments that

measures to ensure safety and quality, and strive to develop

improve quality and cost. New products and new technology

new products and new technology. We will seek to improve

was developed to match customer needs, and to support

our cost structure, raise productivity, and innovate a

our “Cost Innovation 30” activities aimed at bringing down

corporate structure that enhances profitability. Our prime

overall costs.

directive is the realization of the Medium-Term Management

As a result of these efforts, the Group reported net sales of

Plan “OCEAN-15”.

83,700 million yen (up 5.2% year on year), operating income

As a result of the above, we forecast net sales of 85,000

of 4,340 million yen (up 17.3% year on year), and ordinary

million yen (up 1.6% year on year), operating income of 5,000

income of 5,372 million yen (up 29.5% year on year). The

million yen (up 15.2% year on year), ordinary income of 5,500

Group posted an increase in revenue and profit for the first

million yen (up 2.4% year on year), and net income of 3,600

time in two years, and marked a record high for ordinary

million (up 28.2% year on year).

income. Net income amounted to 2,807 million (down 14.8%

An exchange rate of 90 yen to the U.S. dollar is assumed.

Although the boycott of Japanese brand products in China had an impact, automobile

Net sales and operating income Net sales

(¥ million)

75,000

production by our main customers in, our major Japan market, as well as the United

Operating income

59,614 1,449

60,000

(¥ million)

0 2009

2010

2011

2012

States market, recovered after the substantial slump in production caused by the Great East Japan Earthquake. Net sales for the entire business segment surpassed those of the previous fiscal year. As a result, net sales for the segment increased 4.9%

3,000

from the previous fiscal year to 59,614 million yen.

2,000

On the profit front, despite the increase in net sales, the effect of an improved cost

1,000

structure, and a decrease in depreciation expense, the segment posted operating

0

income of 1,449 million yen. This is a decrease of 13.2% year on year, due to the

(1,000)

impact of the rising cost of materials, and initial expenses accompanying the launch of

2013 (Fiscal year)

business in China.

Valve product business segment Tire Valve products

TPMS products

28.4% Control Devices products

year on year), due to the posting of loss on change in equity

Sales of TPMS (Direct-style Tire Pressure Monitoring System) products in the United

Net sales and operating income Net sales by region Japan

North America

Asia

53,436

( ¥ million )

60,000

40,000

17,726 12,537

20,000

0

05

2010

2011

2012

2013

(Fiscal year)

Japan

North America

Asia

3,582

( ¥ million )

4,000

50 40

2,000

30

773

0 (1,000)

2010

2011

2012

2013

(258)

(Fiscal year)

30,000

37.3

(¥ million)

20,000

3,000 2,000

10,000

20

1,000

10 0

States, the major market, increased along with the recovery of sales by Japanese

Operating income

23,747 2,928

(%)

3,000

1,000

Net sales

(¥ million)

Rate of oversea sales

Operating income by region

2010

2011

2012

2013

(Fiscal year)

0

2009

2010

2011

2012

automobile manufacturers. Tire valve and valve core products, and valve-related products also performed strongly. As a result, net sales for the entire business segment were up 6.2% compared to the previous fiscal year to 23,747 million yen. In terms of profit, operating income rose 43.6% from the previous fiscal year to 2,928 million yen, reflecting the growth in net sales and the effect of correction of the strong yen since December.

0 2013 (Fiscal year)

Pacific Industrial Co.,Ltd. PACIFIC REPORT 2013

06

Management

Corporate Governance In order to strengthen our supervision capability and plan for quick response in management operations, Pacific Industrial clearly divides management supervision and management operations into separate functions. The institution of corporate auditors is set up to supervise management. A total of four auditors, including two from outside the company, work closely with the internal auditing department to supervise all business. To speed up decision making and clarify management roles/responsibilities an operations committee system has been introduced. Overall business management is determined by the shareholders’ meeting, board of directors, board of auditors, and accounting auditors. In addition, necessary management requirements and strategies are reviewed and approved at the strategy and management meetings. The board of directors decides the basic direction of management and supervises the business operations. To make this institution most swift and effective, there are a total of 7 board members, each with an appointment term of 1 year. Since June 2010, an external director has been selected to preserve clear and objective management, and provide a third party opinion to decision making.

Stakeholder Management Front Row : Left Side … Board of Directors, Right Side … Corporate Auditors Back Row : Officers

Corporate Directors, Auditors and Officers (as of June 15, 2013) Board of Directors

Officers

Shinya Ogawa Chikashi Suzuki Masaharu Oba Takayuki Ishizuka Katsuya Suzuki Tsunenaga Moshino Hiroshi Kurokawa

President & CEO Vice President Senior Managing Officer Senior Managing Officer Managing Officer Managing Officer Director (outside)

Toshiteru Ando Hisashi Kayukawa Tetsushi Ogawa Kunihiro Yanagihara Terumi Noda Yoshio Mori Harunori Asano Kazuya Hayashi Masataka Kurita

Corporate Auditors

Managing Officer Managing Officer Managing Officer

CSR Policy

Hiroshi Nagata Satoshi Kawai Yukio Manita (outside) Katsuhiro Takahashi (outside)

Customers

Stockholders

Glocalization (Communities)

Placing the utmost importance on “Customer First”, we will work to provide environmentally friendly, high-quality, and safe products and services that are trusted by, and satisfy, our customers.

In order to obtain trust and meet expectations of our stockholders, we will place importance on twoway communication and continuously strive to improve our corporate value by taking a long-term view.

We will strengthen the development of e n v iro nm e n t a ll y f r i e ndl y pro du c t s a nd technology and promote manufacturing that takes environmental conservation and reduction of burdens on the environment into account throughout the entire process.

Business Partners

Employees

Aiming at co-existence and coprosperity based on mutual trust, we will respect our business partners and establish strong positive relationships with them on an equitable and fair basis.

From the perspective of respect for human rights and dignity, we will provide a workplace where all employees can work at ease in an environment that allows them to find work they can be proud of, and encourages them to demonstrate their creativity and spirit of challenge.

Environment

Society

We will be compliant with national and international laws and regulations and social norms and respect culture and custom, while working to contribute to the international society and promoting regional development. Social Contribution

We will be actively engaged in various social contribution activities through close partnership and cooperation with communities to establish ourselves as a good corporate citizen.

General Environmental Policies

Corporate Social Responsibility (CSR) Management The Pacific Industrial Group believes that CSR is the keystone of management for honorable business operations that can be trusted and counted on by society. Through our activities in all regions and countries, we aim to become a “True Glocal Enterprise” that positively contributes to the continuous development of society. To preserve harmony between the economy,

Environmental Philosophy

We shall actively partake in protection of the global environment, and strive to be a “credible high quality company” that earns the respects from our societies.

environment, and society, we place great importance on open and fair communication as well as creating a win-win relationship with all of our stakeholders. Stoc kho lde r

mer sto Cu

CSR Promotion Organization

CSR Philosophy

Technology

Partner

CSR Headquarters CSR Council

Environment Human resources

Quality Cost

Internal control

Environment preservation

Corporate governance

Risk Management Committee

07

Compliance Committee

Disaster Control Committee

Environment Committee

Energy saving

Regional contribution

Information disclosure

Risk management

Compliance

E m pl o y e e

(Community) cal Glo

Safety

Amid many risks and dangers, we try to earn the trust and expectations of our stakeholders as a true global company. To this purpose, we have established the c o re e l e m e n t s o f c o m p l i a n c e , r i s k management, and corporate governance within all of our business activities.

We shall strive to contribute to our societies through the offering of more environment-friendly products, and the implementation of daily activities that consciously reduce the environmental pollutant loads.

We shall always observe the environmental laws, regulations, local ordinances, and industrial guidelines, and actively follow the voluntary protective rules with conviction.

We shall strive to enhance the environmental protection efforts by saving-resources, saving-energy,recycling and setting environmental goals and objectives that may be reflected in our various business activities and conditions.

We are resolved to enhance stability and effectiveness in our environmental management systems, and to strive towards continuous improvements in the environment and towards prevention of pollution. We shall actively propagate these environmental policies to all employees as well as to the public.

Pacific Industrial Co.,Ltd. PACIFIC REPORT 2013

08

Performance Highlights PACIFIC INDUSTRIAL CO., LTD. and Consolidated Subsidiaries, Year Ended March 31

For the year Capital Expenditures

Depreciation Expenses ( ¥ million )

( ¥ million )

1,000

10,000

12,000

7,820

9,000

Net sales

( ¥ million )

12,000

15,000

R&D expenses

6,564

8,000

Operating income

647

800 600 400

4,000

3,000 0

2009

2010

2011

2012

2013

0

Net income (loss) Ratio of net income to sales (%)

200

2,000

2009

2010

2011

2012

2013

Ordinary income Ratio of ordinary profit to sales (%)

6,000 6,000

Ratio of operating profit to sales (%)

0

2009

2010

2011

2012

2013

Net assets

Equity ratio

( ¥ million )

120,000

96,976

100,000

50,969

60,000 50,000

(¥)

900.89

(¥)

60 800

400

2011

2012

2013

11.00

12.00

2010

2011

2012

2013

2009

2010

2011

2012

2013

1.00 0.75

5.7

6.0 4.0

0.50

2.0

0.25

0

2009

2010

2011

2012

2013

(2.0)

2009

2010

2011

2012

2013

ROE/Return on equity (%)

8.0

0.89

5,281

4,147

5,372

57,119

4.6

6.2

5.2

6.4

6.4

2,335

(355)

2,498

2,969

3,297

2,807

29,846

2.6

(0.4)

3.2

3.5

4.1

3.4

3.4

8,930

7,117

6,564

69,793

684

735

603

647

6,879

Millions of yen

2008

Thousands of U.S. dollars

2009

2010

2011

2012

¥100,466

¥85,468

¥93,004

¥81,934

¥90,540

2013 ¥96,976

1,031,111

2013

43,138

35,238

38,797

39,126

42,396

50,969

541,935

40.3

38.2

38.9

44.6

44.1

49.6

49.6

Millions of yen

Thousands of U.S. dollars

2013

2013

2008

2009

2010

2011

2012

Cash flows from operating activities

¥10,472

¥7,520

¥17,850

¥12,695

¥7,041

Cash flows from investing activities

(12,853)

(17,002)

(5,028)

(5,121)

(6,997)

(7,405)

78,735

Cash flows from financing activities

4,186

6,108

(4,562)

(9,624)

3,050

(3,195)

33,971

Cash and cash equivalents at end of year

6,170

2,426

10,693

8,379

11,424

11,501

122,286

Per share data 2008

2009

2010

2011

2012

¥9,934

105,625

yen

dollars

2013

2013

¥757.28

¥611.55

¥677.64

¥684.01

¥748.15

¥900.89

9.58

Net income

43.66

(6.65)

46.74

55.54

61.68

52.57

0.56

Cash dividends

10.00

8.00

7.00

10.00

10.00

11.00

0.12

Major operating ratio

0

ROA/Return on assets (%)

1.25

3,595

(0.6)

10,007

Net assets

2.00

(10)

Total assets turnover ratio (%)

(490)

4.4

757

10.00

10

2009

3,976

4.00

0

09

2010

6.00

20

200

0

2009

8.00

40 30

0

0

50

600

5.2

Cash flows

(¥)

52.57

46,146

5.2

9,211

Total assets

Cash dividends per share

70

4,340

4.6

926

10

1,000

3,699

6.1

7,959

50

EPS

5,151

3.9

83,147

10,000

BPS

3,073

(0.5)

122,488

20,000

2013

(437)

4.1

7,820

20

2012

3,640

11,520

20,000

2011

889,952

6,855

40,000

2010

¥83,700

12,042

Equity ratio (%)

2009

¥79,579

5,065

Net assets

0

¥84,631

13,862

30

2013

¥78,202

4,329

30,000

2012

¥80,468

13,933

60,000

2011

¥89,862

8,815

40

2010

2012

14,194

40,000

2009

2011

14,343

80,000

0

2010

12,130

49.6

60

2013

2009

At year end

(%)

2013

2008

Capital expenditures R&D expenses

Total assets

Thousands of U.S. dollars

EBITDA Depreciation expenses

( ¥ million )

Millions of yen

2009

2010

2011

2012

2013

2008 Total assets turnover ratio (%)

6.4

2010

2011 0.97

0.92

0.89

ROA/Return on assets (%)

4.0

(0.5)

4.0

6.0

4.8

5.7

ROE/Return on equity (%)

5.6

(1.0)

7.3

8.2

8.6

6.4

ESG data 2008 CO2 emissions (kt)

2009

2010

2011

23

24

24

26

Waste generation (t)

909

744

389

376

361

339

VOC emissions (t)

346

277

320

250

165

175

7

8

10

9

0.29

0

0

0.26

1,624

1,600

1,604

Number of people taking childcare leave

7

9

0

Frequency rate of employees leaving due to industrial accident

0.25

0.22

1,643

1,661

1,636

Number of employees 2011

2012

2013

2013

25

2.0

2010

2012

30

4.0

2009

2013

0.88

6.0

(2.0)

2012

0.87

10.0 8.0

2009

0.91

Notes: (1) Calculation formulas for each indices EBITDA = Net income before income tax, etc. + Interest expenses + Depreciation expenses ROA = Ordinary income / (Total assets at the end of previous fiscal year + Total assets at the end of current fiscal year) / 2 ROE = Net income of current fiscal year / (Equity at the end of previous fiscal year + Equity at the end of current fiscal year) / 2 (2) U.S. dollar amounts presented above is calculated at the exchange rate as of March 31, 2013 with Japanese yen amounts to U.S. dollars amounts at ¥94.05 to US $1.00. (3) The emission rate figures of CO2, waste products, and VOC only represent those of domestic locations (excluding affiliates).

Pacific Industrial Co.,Ltd. PACIFIC REPORT 2013

10

Department of General Affairs 100 Kyutoku-Cho, Ogaki City, Gifu Prefecture, 503- 8603 Japan Phone: +81-584-93-0113 Fax: +81-584-92-1804 E-mail: [email protected] www.pacific-ind.co.jp

Company Profile

State of Shares

Pacific Industrial Co., Ltd. 100 Kyutoku-Cho, Ogaki City, Gifu Prefecture, 503- 8603 Japan TEL 0584−91−1111 (main switchboard) Established: August 8, 1930 Capital stock: 4,320 million yen Number of employees: 1,604 (consolidated: 3,128) Businesses: Manufacturing and sales of automotive parts, electric appliance components,electronic devices and other products Operations in Japan: Seven plants in Japan Name: Head Office location:

Taiheiyo Sangyo Co., Ltd. Pacific Development Co., Ltd. Taiyo Kosan Co., Ltd. PEC Holdings Corporation Pacific Industries USA Inc. Pacific Manufacturing Ohio Inc. Taiwan

Pacific Valve (Taiwan) Co., Ltd.

South Korea

Pacific Valve Industrial Co., Ltd. Pacific Industries (Thailand) Co., Ltd.

China

Pacific Industries China Corporation

Number of shareholders

4,100

Number of shares held Shareholding ratio (thousands of shares) (%)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,679

4.97

Ogaki Kyoritsu Bank, Ltd.

2,671

4.96

The Juroku Bank, Ltd.

2,619

4.86

Nippon Life Insurance Company

2,457

4.56

The Dai-ichi Mutual Life Insurance Company

2,349

4.36

Japan Trustee Services Bank, Ltd. (trust account)

2,184

4.05

PEC Holdings Corporation

1,987

3.69

Giken K. K.

1,891

3.51

Employee stock ownership of Pacific Industrial Co.,Ltd.

1,846

3.43

Employee stock ownership of Pacific Industrial Co., Ltd.

1,794

3.33

Securities companies

Treasury stock

1.4%

Tianjin Pacific Auto Parts Co., Ltd.

0.6%

Individuals and others

Changsha Pacific Hanya Auto Parts Co., Ltd. Belgium

54,646,347

(Note) The shareholding ratio excludes treasury stock.

Pacific Air Controls Co., Ltd. Thailand

Number of shares already issued

Shareholder name

PI System Co., Ltd.

U.S.A.

90,000,000

Principal Shareholders (top 10)

Group Companies JAPAN

Number of shares the Company is authorized to issue

Financial institutions

34.2%

41.3%

Pacific Industries Europe NV/SA Foreign corporations

Other Japanese corporations

8.6%

13.9%

Stock Price Nikkei 225

Pacific ind.

1,000

13,774

750

15,000

727 10,000

500 250

5,000

0

0

5,281,900

Trading Volume

6,000,000 4,000,000 2,000,000 0

20,000

’11/06 07

08

09

10

11

12 ’12/01 02

03

04

05

06

07

08

09

10

11

12 ’13/01 02

03

04

05