Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Sales	285,884	222,309	28.6	-Company held product exhibitions for OEMs that account for more than 80% of its revenue. It presented more advanced and integrated automotive information systems and won customer orders. -Strong new vehicle sales in North America. -Greater production volumes at its plant in Mexico.
Operating income	9,813	2,305	325.7
Ordinary income	11,763	4,291	174.1	-
Current net income	9,229	1,747	428.3	-
Audio systems division
Sales	69,378	59,107	17.4	-Strong sales of audio devices for new cars launched by Japanese OEMs in September 2012 in North America. -Strong sales of sounds systems to US-based OEMs.
Operating income	2,552	232	1,000.0
Information/communication systems division
Sales	216,505	163,202	32.7	-In North America, strong sales of multi-function devices centering on car-navigation systems with displays to Japanese OEMs. -Strong sales of products equipped on European luxury cars sold in North America and China.
Operating income	11,857	6,709	76.7

Management Issues and Responses

Issue	Response
1. Creating technical innovations that can keep up with evolutionary functions being added to consumer electronic devices.	-Establish an R&D organization with engineers in Japan, the U.S.A., Europe and China each developing software that is compatible with cloud computing. -Strengthen collaboration with Alps Electric Co., the parent company, providing total solutions for onboard devices and working to create onboard devices with advanced consumer electronics technology.
2. Strengthening cost advantages to lead the winning of business in developing countries.	-Improve Value Engineering (VE) activities and productivity in vehicle electronics by working together with suppliers. -Improve customer satisfaction by pursuing impeccable product quality, and reform indirect cost structure to enhance profitability.
3. Developing products that respond to the need for reductions in weight, energy, and costs.	-
4. Improve and upgrade driver-assist functions that ensure safety.	-

Organizational Reformation

-The Company announced changes of its business organization effective April 1, 2013. The purpose of the reform is to enhance the Company's capabilities to engineer car navigation systems and audio equipment. Major changes include establishment of a sound media development division, which is expected to facilitate internal communications for developing and producing in-car audio devices.

Marketing activity

-In 2013, the Company will step up its activities to present its in-vehicle electronic equipment to global automakers. The company will conduct marketing activities targeting local auto industries, identify the needs of each automaker, and engineer products that satisfy such requirements through its development facilities located worldwide. Having an extended international development and production network, the Company is supplying car navigation systems and audio equipment products to OEMs based in Japan, Europe and the U.S. On the back of the advancement of various communication technologies as cloud computing, requirements for highly functional car electronics with smart phone and car navigation connectivity are growing. In response to such demand, the company is poised to develop and introduce advanced technologies that enable safe utilisation of various functions in the vehicle, aiming to win new contracts.

-In April 2013, the Company announced that it has opened a new liaison office in Jakarta, Indonesia to expand Its business in the country. The new office is positioned as the Indonesian unit of Alpine Electronics of Asia Pacific Co., Ltd., the Company's regional headquarters located in Bangkok, Thailand. The Indonesian operation initially aims to boost the Company's sales of in-vehicle audio systems for the aftermarket. By utilizing the new office, the Company is also seeking marketing opportunities with Japanese automakers, which are expanding their production capacities in Indonesia. In addition, sending its Japanese expatriates to Indonesia will strengthen the Company's relationships with dealers and sales agents, which deal with aftermarket products. Furthermore, the Company plans to conduct market research to meet the needs of the local market, aiming to win new orders from Japanese automakers.

Mid-term Business Strategy "VISION2020"

Items	Measures
1. Vision Statement	Alpine aims to be a Mobile Media Innovation Company that provides you with an enjoyable car lifestyle.
2. Corporate Message	Driving Mobile Media Innovation
3. Business Domain	AVNCD2.0 (A:Audio, V:Visual, N:Navigation, C:Communication & Cloud Service, D:Drive Assist & Cockpit Display)
4. Target Sales	Consolidated sales of JPY 330,000 million in FY2020 (FY ending March 2021) Operating Income ratio: 5%
5. Growth Strategy	・Create unique customer value centered on car lifestyle and new domain proposals -Business Model
	・Enhance competitiveness both by in-house technologies as well as external alliances. －Technology/Product Development
	・Based on the customer viewpoint, create global synergy in human resources, organization and systems -> Global One Team -Human resources, organizations, systems

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ending Mar. 31, 2014 (Result)	Rate of Change (%)
Sales	275,000	285,884	(3.8)
Operating income	8,000	9,813	(18.5)
Ordinary income	9,000	11,763	(23.5)
Net income	6,000	9,229	(35.0)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Group	19,800	16,800	17,200
Audio System Division	2,900	3,200	3,800
Information / Communication System Division	16,900	13,600	13,400

R&D Activities

Audio System Division
-Company's first smart-phone app, TuneIt App, has been upgraded to TuneIt2.0. The Company conducted R&D activities to increase data transmission in Alpine speaker subwoofers for more types of vehicles models, further refining acoustic control.

Information / Communication System Division
-Formed a financial partnership with Speaktoit based in North America, which develops talking personal assistants for smartphones, etc. The Company launched joint R&D activities on new HMI (human machines interfaces) for onboard vehicle cloud computing systems. These will understand spoken words and deliver information needed. The company will steadily continue to equip these in its audio and navigation systems.

Major Technology Licensing-in Agreement

(As of Mar. 31, 2014)

Contract signed with	Country	Contract details	Contract period
Dolby Laboratories Licensing Corporation	U.S.A.	Licensing of patent rights on noise reduction devices for DVD players etc.	From Jan. 1, 1977 until the termination of patent period
Thomson S.A.	France	Licensing of patent rights on DVD players	From Oct. 1, 2000 To Sep. 30, 2005 After that, renewed every 5 years automatically.
Toshiba Corporation	Japan	Licensing of patent rights on DVD players	From Dec. 31, 2000 To Dec. 31, 2007 After that, renewed every 5 years automatically.
MPEG LA LLC	U.S.A.	Licensing of patent rights on DVD players	From Jan. 1, 2002 until the termination of patent period
Microsoft Corporation	U.S.A.	Licensing of usage rights to basic software	From Jul. 1, 2003 To Dec. 31, 2012 After that, renewed every 5 years automatically.
Sony Corporation	Japan	Licensing of patent rights on Navigation equipment with audio function	From Jan. 1, 2014 To Dec. 31, 2018

Capital Investment

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Group	8,193	6,719	5,328
Audio System Division	2,076	1,882	1,378
Information /Communication System Division	6,100	4,833	3,949

Capital Investments in FY ended Mar. 31, 2014

Audio System Division

(in millions of JPY)

	FY ended Mar. 31, 2014
Tangible fixed-assets, particularly dies	443
Software development	106
Capital investment in production facilities
-Manufacturing location in America "Alpine Electronics of America, Inc."	179
-Manufacturing location in Mexico "Alcom Electronicos de Mexico, S.A. de C.V."	253
-Manufacturing location in Europe "Alpine Electronics Manufacturing of Europe, Ltd."	158
-Manufacturing location in China "Dalian Alpine Electronics Co.,Ltd."	161
-Manufacturing location in Thailand "Alpine Technology Manufacturing (Thailand) Co., Ltd."	318

Information /Communication System Division

(in millions of JPY)

	FY ended Mar. 31, 2014
Tangible fixed-assets designed to rationalize new product development and production.	1,668
Software development	400
Capital investment in production facilities
-Manufacturing location in America "Alpine Electronics of America, Inc."	440
-Manufacturing location in Mexico "Alcom Electronicos de Mexico, S.A. de C.V."	559
-Manufacturing location in Europe "Alpine Manufacturing of Europe, Ltd."	654
-Manufacturing location in China "Dalian Alpine Electronics Co.,Ltd."	901

Planned Capital Investments

(As of Mar. 31, 2014)

Name	Location	Activities/Products	Planned investment amount (million JPY)	Starting date	Planned completion
Alpine Electronics, Inc.	Iwaki city, Fukushima Pref.	Production facilities and other facilities, and R&D activities	2,464	Apr. 2014	Mar. 2015
Dalian Alpine Electronics Co. Ltd.	Dalian, China	Production facilities	829	Apr. 2014	Mar. 2015
Alcom Electronicos de Mexico, S.A. de C.V.	Reynosa, Mexico	Plant building	971	Jul. 2014	Mar. 2015