Financial Overview

(in millions JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Sales	684,362	546,423	25.2	-
Operating income	28,528	6,851	316.4	-
Ordinary income	28,090	7,659	266.8	-
Net income	14,311	(7,074)	-	-
Electronic Components
Sales	338,811	268,085	26.4	1)
Operating income	14,012	227	6,072.7	-
Automotive Infotainment
Sales	282,115	219,852	28.3	2)
Operating income	9,813	2,324	322.2

Factors
1)
Electronic Components - Automotive market
-Sales for automotive market in FY ended March 31, 2014 was JPY 168,400 million  which is 20.3% increase year-on-year.
-Sales grew for module products in general, such as instrument panels, electronic shifters and power window switches.  Sales increased also for in-car communications modules.

2)
Automotive Infotainment
-Sales for FY ended March 31, 2014 increased because new cars in the North America and Chinese markets were strong.

Launched Production

<Mexico>
-In March 2014, the Company announced that its Mexican subsidiary, Alps de Mexico S. de R.L. de C.V., will become fully operational in April 2014. The subsidiary was established in August 2013 to purchase, sell, import, and export electronic components in the country.

<India>
-In December 2013, the Company announced that Alps Electric (India) Private Limited, its Indian sales company, will start producing in-vehicle components. In line with this project, the Company plans to relocate the subsidiary to the new site in January 2014. The subsidiary will initially manufacture in-vehicle switches such as power window switches and mirror switches.

Awards

-In March 2014, the Company received "2013 Annual Supplier of the Year".

Business Plan

-The Company is going to issue JPY 30 billion-worth euro-yen convertible bonds which are subject to call and due in 2019. The decision was made at the company's board meeting on March 5, 2014. The collected fund will be used to expand investment in equipment and research and development for the company's important business fields including automotive electronic products, smart phones, energy and health care products. Particularly in the area of automotive electronic products, the Company will increase its supply capacity both at home and abroad to expand sales and promotes development of parts for driving safety support systems. The company will also boost production of smartphone parts and development of next-generation products while accelerating research on energy and health-care products.

Electronic components
-The Company has set a new target to increase annual sales of its automotive electronic components to JPY 300 billion by the FY  ending March 2019. The figure is twice the sales result in FY ended March 2012. The automotive electronics division is likely to be able to achieve its JPY 200 billion sales target for FY ending March 2016 due to a number of new orders it won for 2015 and 2016. The Company will propose new products such as advanced switches for electronic shift levers and electric parking brakes as well as new sensing technologies to automakers. It will also strengthen marketing efforts for its existing products as a measure to further boost sales.

Tasks	Measures in 2014
1. Promotion of Automotive Electronics and Response to Changing Customer Needs	-Enhance module strategies: Touch pad modules, Head-up displays (HUD), Electronic shifters, Haptic commanders
2. Global Response Capabilities (Japan/Europe/the U.S. + Emerging countries)	-Alps Electric Korea: R&D center construction completed, R&D relating to automotive and consumer equipment -Alcom Electronicos de Mexico: Construction launched for new building, Respond to expansion in North American automotive market -Office opened in Jakarta, Indonesia: Enhance support for 2-wheel and 4-wheel vehicle manufacturers -Alps Electric (India): Local production of in-car products planned
3. Next-Generation Product Development and proposals	-Eyeline detection system, Link HUD and Camera for Gesture input
4. Establish Green Device/Industry Business	-Promote sales of power inductors -Promote sales of current sensors for xEMS market *xEMS = IT based energy management system -Develop current sensors for HEV/EV

Outlook for FY ending Mar. 31, 2015

(in 100 millions of JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ended Mar. 31, 2014 (Actual Results)	Rate of Change (%)
Sales	6,850	6,843	0.1
-Electronic Components	3,500	3,388	3.3
(Automotive market)	1,850	1,684	9.9
-Automotive Infotainment	2,710	2,821	(3.9)
Operating income	310	285	8.8
Ordinary income	290	280	3.6
Net income	170	143	18.9

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

R&D Expenditures

(in millions JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	32,987	28,674	28,098
-Electronic components	13,086	11,747	10,817
-Automotive Infotainment	19,895	16,884	17,252

R&D Structure

Electronic components
-The Company, which consolidated the three separate R&D functions that had been working independently at their respective business sectors, collaborates with technical organizations and universities in and outside Japan.

-The Company will strengthen its global development capacity. Its development centers in the U.S. and Europe will conduct researches on laws and regulations as well as technology trend while those in Japan, the U.S., and Europe will enhance collaborations in the areas of new product development and marketing. The Company will also transfer functions for developing switches and other existing products to its development centers in Korea and China to allow them to develop products that meet local specifications. With these initiatives, the Company aims to establish a system to support its clients' R&D activities and promote design developments in order to increase orders in global market, which will allow the firm to strengthen business base for automotive equipment.

-In April, 2013, the Company announced that its South Korean subsidiary Alps Electric Korea, Co., Ltd. located at the industrial park in Gwangsan-gu, Gwangju has built a new R&D facility. The total investment is approximately KRW 11 billion (approximately JPY 1 billion). By expanding its capacity for developing new products and manufacturing equipment, the company aims to reduce its development lead-time. The subsidiary also plans to increase its R&D workforce by 30% to approximately 1,000 in three years. Alps Electric Korea already covers functions from development through production. The expansion project is aimed at gaining higher capability for proposing new products and technologies to Hyundai Motor Company and major electric-appliance manufacturers. The subsidiary will continue to support development in Japan and other countries worldwide.

-The Company holds Sendai R&D Center in Sendai-City, Miyagi-Prefecture in Japan.

Co-Develoment

-In June 2013, the Company announced that It will enhance Its sensor business. The Company has already been collaborating with U.S.-based Qualtre, Inc. on development of inertial sensors such as gyroscopes to expand its product lineup. The two companies are going to develop a new gyroscope sensor by utilizing the world's first technology to reduce size and improve detection accuracy. The new gyroscope is expected to be commercialized in the first half of 2014 for use in electronic stability controls (ESCs) as well as car navigation systems. Alps Electric invested USD 3 million (approximately JPY 300 million) in Qualtre in May 2013, aiming to strengthen their development and sales partnership.

Product Development

Multi GNSS Module for Automotive
-In March 2014, the Company announced that It has developed the "UMSZ2 Series" Multi Global Navigation Satellite System (GNSS) module for automotive use. The module's samples will be made available from April 2014 and mass production will begin in October 2014. The new module can receive satellite radio waves from multiple GNSSs: GPS (U.S.A.), GLONASS (Russia), BDS (China) and Galileo (under development in Europe). The module improves the accuracy of detection for a vehicle's position by receiving signals from the GNSSs.

Two-pole Sliding Contact Micro Switch
-In September 2013, the Company announced that it has developed the "SPVQC Series" surface mount two-pole sliding contact micro switch for use in electric parking brakes (EPBs). Mass production started in June 2013. The new product offers enhanced resistance to dust and vibration and also ensures high contact reliability. The Company is poised to win more orders with this new technology. Installation of EPBs is growing and surface mount components are increasingly used for LEDs and other components around the EPB device.

Ring type Encoder
-In June 2013, the Company announced that it has developed the "EC50A Series" ring type encoder for use in car air-conditioning and audio system controllers. Samples of the new product will be available starting in June 2013. Despite having a projected area which is 1.4 times bigger than the conventional EC40A Series (dimensions: 40.4 × 44.2 × 22mm (W×D×H), 25mm ring inside diameter), the new EC50A Series product has a large 37mm ring inside diameter, providing a central opening which is about twice as large. The inside diameter of the ring allows installation of a switch, LEDs, or a small liquid-crystal display (LCD). The Company developed this new encoder at its engineering headquarters in Furukawa, Miyagi Prefecture, Japan, and will manufacture the product line at Dalian Alps Electronics Co., Ltd., based in Dalian, Liaoning Province, China. Monthly production is expected to reach 150,000 units by September 2013.

Waterproof Detector Switch with Wire harness
-In April 2013, the Company announced that It has developed and started mass-producing a new waterproof detector switch with wire harness for its "SPVQ8 Series" lineup, the industry's smallest waterproof detector switches used for detection of opening and closing as well as position of automotive parts. The new detector switch, including its wire harness connector, retains IP67 dust and water resistance. (IP67 is an IP code (International Protection Rating) expressing levels of protection against the ingress of solid objects and water.) Waterproofing both the detector switch and its wire harness contributes to reducing the waterproofing workload during automotive parts assembly. The detector switch is produced at Wuxi Alps Electronics Co., Ltd. in China with the monthly production of 300,000 units.

Bluetooth Module integrating Antenna and Memory
-In April 2013, the Company announced that it has developed the "UGZZC-G Series" Bluetooth All-in-One Module with Antenna for automotive applications. The new product is designed for wireless connections between automotive equipment such as car audio systems and mobile devices. The Company will conduct aggressive marketing activities targeting audio equipment manufacturers to win new orders from all over the world. The new product is based on the Company's existing "UGZZC Series" Bluetooth module for car navigation systems, and its additional features are a built-in antenna and serial flash memory capable of storing up to 3,000 phone book data entries. It enables hands-free mobile phone use and music reproduction from smart phones both using car audio systems. Mass production begins in April this year at the Kakuda Plant with an initial monthly output of approximately 50,000 units. The production rate will be increased in accordance with the volume of new orders.

Capital Expenditure

(in millions JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	26,570	31,833	34,024
Electronic components	16,671	23,845	24,509
Automotive Infotainment	8,193	6,719	5,328

Electronic components
-The Company made capital investments in R&D functions and production facilities for components such as touch-panel devices for smart phones, switches, and camera actuators.

Automotive Infotainment
-The Company invested in mainly machinery in order to renew and streamline production facilities, and dies for new products.
-Outside Japan, the Company invested in production facilities in Alpine Electronics of America, Inc. and so on.

Planned Capital Investment

(As of Mar. 31, 2014)

Name (Location)	Division	Details of the facility	Planned investment (million yen)	Start	Estimated completion
Alps Electric Co., Ltd. Furukawa Plant and others (Osaki, Miyagi Pref.)	Electronic components	Equipment to produce electronic components	6,606	Apr. 2014	Mar. 2015
Alps Electric Co., Ltd. Headquarters (Ota, Tokyo)	Electronic components	Equipment for system related	1,090	Apr. 2014	Mar. 2015
Alps Electric Co., Ltd. Nagaoka Plant (Nagaoka City, Niigata Pref.)	Electronic components	Equipment to produce touch panels	322	Apr. 2014	Mar. 2015
Alpine Electronics, Inc. Iwaki Plant (Iwaki City, Fukushima Pref.)	Automotive Infotainment	Manufacturing equipment, R & D, other equipment	2,464	Apr. 2014	Mar. 2015