Annual Report 2016-2017 - Alpine

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Annual Report 2016-2017

Annual Report 2016-2017

CONTENTS Top Message 4 Overview of Alpine Profile

6

Business Domains Value Chain  8

Business Report

Corporate Philosophy Alpine values its members as individuals, and is committed to forming an energetic and attractive company where the quality of work is enhanced.

1 Respect for Individuality

Alpine seeks to foster the pride and enthusiasm of each employee, providing the means and opportunities for growth, and encouraging relationships built on mutual trust.

2 Creating Value

Alpine eagerly takes up the challenge of maintaining technical leadership in creating new values that will enhance the quality of human life.

3 Contribution to Society

Alpine is committed to providing superior products and thus contributing to a fuller, richer society.

Conduct Guidelines

Creation, Passion, Challenge

We will boldly challenge ourselves to create new value and perform MONOZUKURI with passion.

VISION2020 Vision Statement

Alpine aims to be a Mobile Media Innovation Company that provides you with an enjoyable car lifestyle.

Editorial Policy Up until fiscal 2015, Alpine has separately published an annual report, a corporate profile/CSR report and online CSR/environmental information. As of fiscal 2016, these have been combined into our annual report, which covers both financial and non-financial information. At Alpine, we believe in the importance of having our stakeholders understand our activities by actively disclosing information on our business plans, performance, CSR management policy, environmental conservation efforts and other aspects of our business. As such, we consider this report an important communication tool.

Segment Information Sales Ratios

10

Financial/Non-financial Highlights

11

ESG Efforts Research and Development

12

Intellectual Property

14

Quality Assurance

15

Material Procurement

16

Designations Within This Report

Human Resource Cultivation

17

Alpine: Refers to the non-consolidated domestic business. Alpine Group: Refers to all consolidated companies around the world. Alps Group: Refers to the corporate group led by Alps Electric.

Diversity 18

* ESG stands for environment, social and governance and is an important criterion for evaluating corporate value, together with financial information. This report provides a summary of the Alpine Group’s ESG efforts.

Labor Safety

19

Environment 20

Scope and Period Covered by Report

Local Community

22

[Scope]

Corporate Governance

23

Compliance

26

Risk Management

27

Information Security/Information Disclosure

28

Alpine CSR

29

This report covers the Alpine Group in Japan and around the world, but the scope of individual topics may vary. [Period] ●In principle, this report covers the period from April 1, 2015 to March 31, 2016, but it does include some activities from before and after that period. ●The Japanese portion of the environmental report covers the period from April 2015 to March 2016, and the overseas portion covers the period from January to December 2015. Published in July 2016

Financial Data Consolidated Financial Statements

2

Annual Report 2016-2017

Annual Report 2016-2017

30

3

Message from the President

We will build a foundation for growth into a mobile media innovation company.

partner automobile manufacturer. We also received several awards for our commitment to sound in our domestic commercial business and our product proposals focused on the car lifestyles of families raising children. We were also able to make progress on alliances in China and the United States aimed at developing products to contribute to the motorized society of the next generation. Fiscal 2016 is the year to build a foundation for growth in order to achieve the targets of VISION 2020. With greater vigor and a sense of urgency, we will promote innovation based on customer value, increased cost competitiveness in the aim of achieving a profitable structure and the establishment of a unified global team system.

Top Message Overview of Alpine Business Report

The decision has been made for a t wo-person management system consisting of Toru Usami, Chairman of the Board, and Nobuhiko Komeya, President & CEO. Working together, they will carry out their heavy responsibility, working on improving performance in the short term and improving profits from the perspective of company-wide optimization for future growth while actively responding to various changes. The car electronics industry is currently in a period of major structural change against a backdrop of car computerization and changes in the motorized society. In the midst of this business environment, Alpine is promoting VISION 2020, the corporate vision for the year 2020. In VISION 2020, the vision for Alpine’s future is to be a mobile media innovation company that provides you with an enjoyable car lifestyle. Our commitment is to make leaps forward as a company that creates new relationships between people and cars. Looking back at fiscal 2015, the circumstances were dire for business results, including changes in new car sales trends in major markets and exchange rate fluctuations in the second half of the year. At the same time, customer-oriented efforts resulted in our OEM business being recognized as a strategic supplier by a

ESG Efforts

Consider ing CSR the ver y business activities that embody our cor porate principles, Alpine will engage in ESG-conscious management in order to achieve sustainable growth. In the aim of becoming an attractive company tr usted by our stakeholders, including shareholders, customers, employees and local communities, we promise to work on improving corporate and shareholder value. July 2016

Achievement of VISION 2020

■ Midterm Business Forecast 2,650

■Sales

■ Operating profit (hundred millions of yen)

2,520

2,858

2,945 2,730

2,620

2,223

FY1991 Listed on first section of TSE ¥106.5 billion

President

Nobuhiko Komeya

2,012

1,966

2,029

Establishment of foundation for growth

1,685

Chairman of the Board

Toru Usami

FY1988 Listed on second section of TSE ¥74.8 billion

101

111 70

98 56

2 1988

06

07

08

09

10

11

115

23 12

13

14

54

45

15

16

18

20(Year)

Financial Data

(106)

4

Annual Report 2016-2017

Annual Report 2016-2017

5

Profile

We work to maximize corporate value through our global sales, production and development network.

■ Shares As of June 2016 Major Shareholders

Number of shares held (thousands of shares)

Name

D

S D H

S

S

S

S S

D D H S S

M

S H S S

S

S H

M

S

M

M

S M

S S

H D M

S

S

S

H

Headquarters

S

Sales Base

M

Manufacturing Base

D

Development Base

40.93

STATE STREET BANK CLIENT OMNIBUS OM04

2,563

3.72

JAPAN TRUSTEE SERVICES BANK, LTD. (TRUST ACCOUNT)

2,451

3.56

NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LENDING 15PCT TREATY ACCOUNT

2,165

3.14

THE MASTER TRUST BANK OF JAPAN, LTD. (TRUST ACCOUNT)

1,387

2.10

THE BANK OF NEW YORK MELLON SA/NV 10

1,249

1.81

THE BANK OF NEW YORK, NON-TREATY JASDEC ACCOUNT

1,155

1.68

STATE STREET BANK AND TRUST COMPANY 505001

1,064

1.54

THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT

950

1.38

EVERGREEN

821

1.19

2,500 2,000 1,500 1,000 500 0 ’15/4

5

6

7

8

9

10

Share Distribution by Owner Foreign investors/ Overseas institutional investors

11

12

’16/1

2

3

(Year/month)

Financial institutions (including investment trusts, pension trusts and securities companies)

Business Report

S

28,215

Low

3,000

Percentage of shares held (%)

Overview of Alpine

S

S

S

D

High

(Yen)

Top Message

ALPS ELECTRIC CO., LTD.

S

Trend in Stock Price

Contribution

15.99%

36.69%

Total

68,933,693 shares (excluding treasury shares)

Individuals

Corporations

ESG Efforts

42.35%

4.97%

Note: Percentage of shares held excludes treasury shares.

■ Outline As of March, 2016 Corporate Name

■ About the Committee Members As of June 2016

ALPINE ELECTRONICS, INC.

ALPINE ELECTRONICS MARKETING, INC. ALPINE TECHNOLOGY

1-1-8 Nishi-Gotanda, Shinagawa-ku, Headquarters

Tokyo 141-8501

Domestic

ALPINE MANUFACTURING, INC.

Tel: +81-3-3494-1101 (main line)

Subsidiaries /

ALPINE PRECISION, INC.

Domestic

ALPINE GIKEN, INC.

Affiliates

ALPINE INFORMATION SYSTEM, INC.

20-1 Yoshima Industrial Park, Iwaki City, Iwaki

MANUFACTURING, INC.

Fukushima 970-1192

ALPINE BUSINESS SERVICE, INC.

Tel: +81-246-36-4111 (main line)

ALPINE CUSTOMERS SERVICE CO., LTD. Three others

Date of Establishment Common Stock

Overseas 160,000,000 shares

Total Issued

68,933,693 shares

Stocks

(850,808 treasury shares not included)

Paid-in Capital

¥ 25,920 million

Employees (Consolidated) Annual Report 2016-2017

11,908 (total from 35 consolidated companies)

Subsidiaries / Overseas Affiliates

ALPINE ELECTRONICS OF AMERICA, INC. ALPINE ELECTRONICS (EUROPE) GmbH ALPINE ELECTRONICS (CHINA) CO., LTD. ALPINE OF ASIA PACIFIC INDIA PVT., LTD. 28 others

Toru Usami Nobuhiko Komeya

Position and Responsibility/Primary Role Chairman of the Board

President

Hitoshi Kajiwara

Managing Director

Administration

Naoki Mizuno

Managing Director

Sales

Koichi Endo

Managing Director

Technology and Development

Toshinori

Director

United States/Europe

Shuji Taguchi

Director

Quality/Environment

Yasuhiro Ikeuchi

Director

Product Design

Youji Kawarada

Director

Production/Materials

Shinji Inoue

Director

Product Design Assistant

Kobayashi

Masataka Kataoka

Director

Name

Position and Responsibility/Primary Role

Hirofumi

Director

Morioka

Audit and Supervisory Committee (Full-Time)

Hideo Kojima

* Outside Director Audit and Supervisory Committee

Certified Public Accountant

Satoko

* Outside Director Audit and Supervisory Committee

Lawyer

* Outside Director Audit and Supervisory Committee

Lawyer

Hasegawa Naoki Yanagida

*Asterisks indicate external members of the Audit and Supervisory Committee. Note: Hideo Kojima, Satoko Hasegawa and Naoki Yanagida are independent directors according to the Company’s criteria for determining independence, and their names have been submitted to the Tokyo Stock Exchange as independent directors.

President & CEO,

Financial Data

Number of

6

May, 1967

Name

Alps Electric

Annual Report 2016-2017

7

Business Domains

Value Chain

We will create the car lifestyles of the next generation as a mobile media innovation company.

We endeavor to create future value to enrich the car lifestyles of customers all over the world.

Since 2005 Alpine has defined our business domain

meets advanced needs for car making of the future. We produce various equipment and systems that offer a premium car lifestyle that exceeds customer expectations

March 2014 builds on AVNCD and expands in scope

in the business domain of Audio, Visual, Navigation,

to include cloud, which connects the inside of the car

Communication, Cloud Services, Drive Assist and

with the outside world, and integrated cockpit, which

Cockpit Display.

Research and Development

Marketing

Material Procurement

Cultivating core technologies in anticipation of the next generation cockpit

Partnering with suppliers all over the world in pursuit of high value-added parts

Alpine listens to feedback from our customers all over the world to deliver products and services that exceed their demands and expectations. Demonstrating our unique technical and planning capabilities, we aim to improve customer satisfaction and create new markets.

We are working to strengthen the technical foundation that supports our high performance and highly reliable products and establish new technologies that will cultivate new markets. We are further cultivating our core technologies and striving for innovation of on-board information equipment/systems.

We seek to ensure the reliability required of our products and create never-before-seen features. Alpine engages in global procurement activities while emphasizing proper quality and cost as well as g l o b a l e nv i r o n m e n t a l a n d s o c i a l responsibility.

Overview of Alpine

Engaging in dialog with customers to create value from the customer’s perspective

Top Message

as AVNCD (Audio, Visual, Navigation, Communication, and Drive-assist). The corporate vision established in

Business Report

Next-Generation NAVI

Audio Speakers DL3-F180AV-S [Japan]

Visual Amp PDR-V75 [North America/Europe/Asia]

Delivering the ultimate sound with special Our 5-channel high sound quality digital design/tuning for the Vellfire and the Alphard, power amp supports various systems. these speakers increase owner satisfaction.

Rear Vision PXH12X-R-AV [Japan]

We provide Apple CarPlay with high image and sound quality in a sophisticated, flat design.

Enjoy digital terrestrial broadcasts and DVDs even from the rear seats on a large 12.8-inch screen. Loaded with Plasmacluster technology that cleans the air in the vehicle.

Navigation/Cockpit Display

Communication/Cloud Services

Car Navigation System BIG X “11” [Japan] X110 [Europe]

Smartphone App Alpine Connect

Our model-specific car navigation systems come with 11-inch monitors, the largest in the world. We began providing these systems overseas in 2013 and are expanding the supported models.

[North America/Europe/ Australia] The Alpine Connect smartphone app makes various applications available on on-board devices.

System Solution

Rear View Camera HCE-C1000 [Japan]

Alpine links equipment to enhance driving safety and comfort. For example, we offer systems that let you see what your children are doing without turning around by showing video of the rear seat caught by the rear seat camera on the screen of the car navigation system. We also build in car aroma systems in the optimal location to create pleasant spaces filled with fragrant aromas as we pursue beauty and comfort inside cars from every angle. Overseas, we also propose systems that enable control of accessories (such as winches, lights and air suspension) according to the customer’s car lifestyle.

Annual Report 2016-2017

Marketing

Material Procurement

Research and Development

Services

Quality

Manufacturing

Quality

Services

Pursuing high-quality manufacturing while sticking close to local markets

We deliver highly reliable products based on an evaluation system developed specifically for in-vehicle environments.

We work closely with our customers to improve our services in all ways possible.

Based on our basic policy of “Made In Market,” Alpine has built a global production network consisting of the five regions of Japan, North America, Europe, China and Asia. Our product supply system reflects changes in market needs and demand in each region in a timely manner.

Field tests are conducted at our Evaluation Center and test courses to ensure stable operation and ease of use under harsh conditions, such as vibrations and impact during driving, sunshine and temperature changes. Our quality evaluation system is established based on high precision analyses.

Alpine products are delivered to end users through various distributors and foreign and domestic automobile manufacturers. We work continually to improve the logistics of getting our products from our production plants into the hands of customers as well as after-sales support.

Annual Report 2016-2017

Financial Data

Drive Assist Bright, clear images are displayed even in dark places to assist with smooth parking.

8

AV Head Unit iLX-007 [North America/Europe/Asia]

ESG Efforts

Manufacturing

Providing a premium car lifestyle that exceeds customer expectations

9

Business Report

We offer an overview of our business in fiscal 2015 below.

■ Financial/Non-financial Highlights Sales

Operating Profit

Ordinary Profit

(Unit: Hundred millions of yen) 3,500

(Unit: Hundred millions of yen) 140

(Unit: Hundred millions of yen) 160

3,000

■ Segment Information In the domestic after-market, we introduced automobile navigation systems with large, 10” high-definition LCD screens and large-screen Rear Vision navigation systems that we have been rolling out ahead of the rest of the industry. We worked on expanding sales by proposing high valueadded systems for designing optimal interior spaces in each model of vehicle. At the same time, in the North American after-market, we shifted to a sales strategy focused on large-screen navigation systems for specific models of pickup trucks and SUVs. In the European after-market, we poured efforts into sales of models that were rated highly by the European Imaging and Sound Association (EISA). Through these and other efforts, we promoted overseas expansion, but sales were stagnant, and the situation remained dire.

2,730

2,500

2,029

2,223

100 80

1,500

60

1,000

40

500

20

0

56

3/2013

3/2014

3/2015

(Unit: Hundred millions of yen) 140

23

2,500

67.4 2,000 64.9

20

30

25 20

3/2014

3/2015

3/2016

4.6

5.1

4.0

2.8

11,800

5.1

1.7

0

1.0 3/2012

3/2013

3/2014

3/2015

3/2016

(Unit: Tons) 6,000

5,000

4,790

11,608 4,000

11,400

7.5

CO₂ Emissions

11,908

11,600

20

6.3

6.0

ESG Efforts

13%

3/2013

■ROE ■ROA

58.0

Number of Employees

30

25

3/2012

3/2016

9.5

3/2016

7.9

2.0

56.0

(Unit: People) 12,000

30

Asia/Other

1,438

37%

2,051

11%

16%

19%

North America

1,442

Japan

Alpine brand after-market business

2,113

3/2015

(Unit: Yen) 35

Audio equipment business

1,252

3/2014

3/2015

ROE/ROA

(Unit: %) 10.0

60.0 1,906

3/2013

Dividend per Share

■ Sales Ratios

62.0

1,680

3/2012

4.9

% year on year

3/2014

66.0

0

0

3/2013

8.0

60.4

17

3/2012

68.0

65.1

1,000

45

70.0

64.0

1,099

¥220.2 billion

69.2

1,018

Sales 

Forecast for next year  ¥202.9 billion (4.1% decrease year on year)

3/2016

■Total Assets ■Net Assets ■Capital Adequacy Ratio

(Unit: Hundred

1,673

16.0

% year on year

3/2015

1,500

20

¥52.8 billion

3/2014

Total Assets/Net Assets/Capital Adequacy Ratio

500

Sales

3/2013

92

40

42

20

127

60

61

0 3/2012

millions of yen)

80

65

60 40

3/2016

Net Income Attributable to Parent Company Shareholders

100

Forecast for next year  ¥51.0 billion (3.2% decrease year on year)

54

0 3/2012

106

Decrease of

117

80

120

Decrease of

120

98

100

2,000

140

115

Business Report

Sales of our audio equipment for both the after-market and automobile manufacturers declined as a result of audio functions being integrated into information and communication equipment like navigation systems and display products. In the midst of this, we worked to expand sales of our sound systems, including speakers and amps focused on realistic, high quality sound, and our slim, lightweight speakers, which have been well-received for their contribution to automobile mileage and the environment. However, the situation remained dire due primarily to falling sales of our audio equipment for automobile manufacturers, which are the main products in this segment.

120

Overview of Alpine

●Information and Communication Equipment Business

2,945

Top Message

●Audio Equipment Business

2,858

150

3,821

11,343

3,568

3,507

3/2013

3/2014

4,592

3,000

By segment

By region

By destination

11,200

15

11,058

81%

10

Annual Report 2016-2017

84%

Europe

39%

11,000

5

10,800

0

2,000

1,000

10,600 3/2012

3/2013

3/2014

3/2015

3/2016

0 3/2012

3/2013

3/2014

3/2015

3/2016

3/2012

3/2015

3/2016

Annual Report 2016-2017

Financial Data

Information and communications equipment business

Audio equipment business for automobile manufacturers

10

11,107

11

Research and Development

We are developing a global R&D system to provide new value for the car lifestyles of our customers.

■ Global Development/Evaluation System Maintaining close ties with our customers in our four global regions, we will handle everything from the front lines of development to evaluation.

■ Policy advances in our business domain of AVNCD (Audio, Visual, Navigation, Communication & Cloud Services, Drive Assist & Cockpit Display) so that we can consistently deliver innovative original products and services.

■ Core Technologies

Technical domains to lead the market: HEADS

Evaluation

Integration of field evaluations and

humans and in-vehicle devices

simulations

Digital Media & Mechatronics

Market-leading media/mechanism originality

Multifunctional large-scale products

• Driver friendliness • Big data utilization • Personalized HMI with server connection • In-vehicle high image quality display • Knowledge on in-vehicle device evaluation • Driver distraction assessment • High-confidence simulation

• Integrating advanced media with in-vehicle devices • Advanced introduction of cloud service to in-vehicle devices • High quality mobile mechanism • Cost conscious mechanism • Establishing safety culture • Improving quality management • Responding to demand for high quality per customer/market • Coordinating in-vehicle devices with vehicle itself • Catchup for V2X ※HMI: Human Machine Interface

■ Strategy We will improve our technological infrastructure (HEADS) that supports our high-functioning, highly reliable products and services, establishing new technologies that will open up new markets. Exploiting the core technologies we have cultivated, Alpine will take up the challenge of innovating on-board information equipment and systems (VISION 2020).

V I S I O N 2 0 2 0 On-board cloud services

AVNCD

Cockpit display

12

Annual Report 2016-2017

A

D

S Foundational domain

■ Alliances ●Joint venture with China-based Neusoft® Together with Neusoft Corporation, a major Chinese software development company, we established Neusoft Reach Automotive Technology (NRA). The joint venture will develop software and related technologies for car intelligence, Internet connection and support for new energy. The Chinese market continues to expand, and we are promoting R&D and working on commercialization. The company will be involved in various fields, including battery package control and critical technology related to intelligent charging for

electric vehicles and other products, advanced driving support systems combining image recognition and sensors, critical technology for automatic driving, cloud platform-based telematics and connected cars.

●Collaboration with US-based Airbiquity We developed Alpine Connect with Airbiquity and delivered a new service allowing control of smartphone apps that are popular overseas (Yelp, Spotify, iHeartRadio, Glymse, etc.) using the Alpine head unit.

■ Creating Trusted Products Alpine products built into cars are subjected to harsh environments, so we test them under conditions that are tougher than the actual environments before placing them on the market. At our reliability evaluation centers and test courses, we conduct quality tests that cover a wide range of areas, from sun reflection checks and durability with respect to sand and dust to temperature, humidity, vibration, impact, radio waves and acoustics.

Reliability evaluation center

Annual Report 2016-2017

Financial Data

Evolving domain

Display/drive assist

E

United States (Los Angeles)

ESG Efforts

Car acoustic specialists

H

Japan (Iwaki)

• In-vehicle sound quality • Sound processing technology • Multiple information/sound tracks • Operation/action sound inside/outside of vehicle

Acoustic

System Integration

China (Dalian)

Business Report

Human Machine Interface

Comfortable communication between

United States (San Jose)

Overview of Alpine

Alpine has established technical domains in which to create advanced products and is promoting research and development in those areas.

Germany (Munich)

Top Message

In the aim of becoming a mobile media innovation company that provides exciting and enjoyable premium car lifestyles that exceed customer expectations, Alpine will continue to improve our technology while making

13

Intellectual Property

Quality Assurance

We strive to create, apply and protect intellectual property to ensure that our customers enjoy worry-free use of our products and services.

We place a priority on the improvement of our quality management system to earn customers trust and ensure satisfaction.

■ Protecting Intellectual property

■ Quality Policy

 ● Promote the creation of Alpine’s intellectual property and enhance the base of our technical management;  ● Effectively and efficiently protect Alpine’s intellectual property to increase its contribution to business income;  ● Utilize Alpine’s intellectual property for business and technical strategies to expand its contribution to business income;  ● Support the creation of new business utilizing intellectual property rights and information.

●Intellectual Property Management System

Global standards for the quality management system (QMS) ensure that all departments and divisions at Alpine satisfy customers with a policy of quality assurance, which is essential to the pursuit of business activities. Alpine has obtained ISO/TS16949 automobile industry quality management standard certification for all production plants both in Japan and overseas. Ever seeking to increase quality, we consider the realization of global consistency in our products and services to be a priority issue in earning customer trust and ensuring satisfaction. Since 2013, we have worked on the global unification of our quality system, and have initiated our global QMS in a number of business units. We continue improving the system to establish a globally standardized system that prevents defects and a QMS that can be applied to new fields such as meter display.

■ Proper Manufacturing from the first step (Frontloading Activities) Defects in products and services cause significant inconvenience to customers. Alpine conducts frontloading activities, which are quality assurance activities for the design, development, and manufacture of products, with the goal of following a policy of proper manufacturing in every process from the product planning stage. Specifically, we established a system of frontloading activities in the Quality Assurance Division to review product development processes from the perspective of quality, identify problems and institute measures. For products supplied to German automobile manufactures, we have implemented maturity level assurance (MLA) in accordance with the regulations specified by the Verband der Automobilindustrie e.V. (VDA: German Association of the Automotive Industry). We have developed a new memory function that records the history of operation in each product to ensure accurate analysis and early solution of problems. Expa

ndin

g up

New Fields for Quality Assurance

strea

m

Annual Report 2016-2017

Financial Data

Market

Delivery

Manufacture

QMS

Existing Fields for Quality Assurance

Customer Satisfaction

Proper manufacturing from the first step through frontloading activities

Parts

Annual Report 2016-2017

We facilitate innovation with patent portfolio management. We conduct validity studies and evaluate legal risk for all inventions, and examine product market and lifecycle from a global business perspective to ensure patent applications that contribute to the growth and development of the Alps Group. Our subsidiaries provide thorough support to solve specific issues in each region. The subsidiary in China, for example, actively utilizes the utility model system to address issues specific to China to ensure strong patent rights.

■ Quality Management System (Global QMS)

Design

14

●Patent Application Strategy

3. Quality Improvement We are fully aware of individual employee responsibility in ensuring the quality required by customers, and set quality targets to promote continual improvement.

Sales

Alpine enhances the creation of intellectual property and implements management systems at global development bases. We specify regulations for the handling of intellectual property at each development base in accordance with the laws and systems in each country. Alpine’s subsidiary in Germany, where service inventions are strictly regulated, has regulations established in accordance with German law. Our subsidiary in China has revised regulations in response to the repeated revision of laws and systems. Our subsidiary in the U.S. established regulations in reference to Alpine Japan regulations aimed at increasing inventor motivation although U.S. patent law does not require them. In Japan, in April 2016, Alpine revised regulations and specified that the rights of service inventions originally vest with the company. Our Intellectual Property Division in Japan plays a central role in global intellectual property management. In 2015, we have enhanced the system through the establishment of the Intellectual Property Liaison Team to handle not only conflicts, but also to prevent the violation of rights by other companies. Alpine also established a Patent Department at its subsidiary in China to support the creation of intellectual property under the initiative of locally-hired staff. Our subsidiary in the U.S. has dedicated legal staff to support the creation of intellectual

property and to handle lawsuits related to patent issues in cooperation with the Intellectual Property Division in Japan. To ensure the proper handling of non-practicing entities (NPEs) which profit through management rather than direct involvement in research, development, and manufacturing, Alpine has established a system for prompt consultations with an established local law firm specializing in intellectual property rights. We dispatch intellectual property division staff in Japan to subsidiaries in Europe to support the creation of intellectual property and other activities. Alpine works to expand business throughout the world by conducting efficient and effective intellectual property management in each region from a global perspective.

2. Planned Initiatives Alpine management institutes planned initiatives throughout the manufacturing process to provide products and services that ensure 100% customer satisfaction.

ESG Efforts

■ Approaches to Globalization

1. Quality First Quality is determined by customer satisfaction. We fully recognize that conformance to quality is the foundation for price, delivery date, and services, and practice a quality-first policy in all our business activities.

Business Report

 ● Be vigilant in avoiding the violation of third-party intellectual property to minimize business risk; and

Alpine provides outstanding products and services that guarantee customer satisfaction.

Overview of Alpine

Since the creation, protection and utilization of intellectual property (including intellectual property rights) contribute to business income, Alpine works as a member of the Alps Group to practice effective business and technical management, and specifies the following missions of the Intellectual Property Division:

Quality Policy

Top Message

Intellectual Property Policies

15

Material Procurement

Human Resource Cultivation

We promote consideration for the global environment and the execution of social responsibilities throughout our entire supply chain.

We support employee growth and development through various opportunities and systems.

■ Material Procurement Policy

■ Basic Policy Alpine Material Procurement Policy

Concept of Employee Growth Open and Fair

Legal Compliance

Partnership

Team of Professionals Alpine creates its team of professionals by encouraging individual employees to accept higher levels of work and to upgrade their skills, which increases their independence as professionals by helping them to develop skills that can be used outside the company. Self-Improvement Based on the premise that self-development has its foundation in individual motivation, Alpine provides opportunities for employees to develop their work skills through self-improvement programs with the aim of effectively synchronizing the needs of the company (taking measures for discovery, cultivation, and appointment of human resources) and individual employees (improving skills and raising motivation through goal setting and skill development).

Assessment of suppliers

・State of ISO14001 certification acquisition ・Approaches to environmental preservation

Suppliers

Alpine

Environmentally-friendly materials

■ Overseas Training System

■ Conflict Minerals Warring factions in the Democratic Republic of the Congo and neighboring countries (9 countries including the Republic of Rwanda) violate human rights through the use of child and forced labor to mine tin, gold and other minerals used in the production of minor metals, and profits from the sale of these minerals are used to fund the purchase of weapons and widen conflict in ways that have a global impact. The Dodd-Frank Wall Street Reform and Consumer Protection Act passed in the United States in 2010 defines these minerals as "conflict minerals," 1 and companies

listed on US stock exchanges are required to disclose information to prevent the use of conflict minerals in their products. From the standpoint of respecting human rights, Alpine understands and agrees with the intent of the law and partners with group companies, suppliers and JEITA to promote efforts aimed at pursuing responsible approaches to material procurement. In 2015, we surveyed each supplier about their response to conflict minerals. Note 1: Columbite – tantalite, tin, gold, wolframite and other derivatives (tantalum, tungsten)

■ Communication with Suppliers material procurement policy. We also present awards to suppliers that have contributed to the improvement of quality, delivery, and cost reduction with the goal of building relationships built on trust. Status of Briefing Sessions (2015) Japan Japan (1st term) (2nd term) Number of Suppliers Attending Number of Participants

China

U.S.

Hungary

95

98

73

65

72

219

200

140

112

127

Alpine provides employee education in a broad range of technical development, from the basic knowledge necessary for product development to knowledge in highly specialized areas. In 2015, we provided 60 classes on 31 items, including on-vehicle security systems, LCD technology, functional safety, automatic operation, cloud elemental technology, basic sound instruction, and thermal design education for a total of 1,470 engineers.

■ Acoustic Training With the aim of cultivating employees’ ability to explain the physical properties of each sound, Alpine has held periodical acoustic training since 1995 for a total of 650 participants. This training consists of primary, intermediate, and advanced levels that increase employee knowledge of acoustics as they develop a sense of sound quality. Training focuses not only on the abstract and sensuous qualities that determine what listeners judge as good and bad, or what they like or dislike, but also on the quantification of perceived sound. Our unique programs increase participants’ knowledge and sense of sound quality, and improve communication capability.

We certify those who excel in the programs as Sound Masters who understand and pass down Alpine sound technology to the next generation. In 2015, we held 12 primary level training sessions and certified eight participants.

Acoustic Training Room

A briefing session

16

Annual Report 2016-2017

Annual Report 2016-2017

Financial Data

Alpine enhances its partnerships with suppliers to facilitate coexistence and co-prosperity through trusting relationships. We invite suppliers to biannual briefing sessions in Japan, and annual sessions in China, North America, and Europe to explain the current state of production and sales as well as announcing our

Alpine dispatches entry and mid-level employees to overseas subsidiaries and other organizations for a period of one year to participate in on-site training as a measure aimed at cultivating global talent. This system was established to cultivate employees with a global perspective and the ability to take action that reflects an understanding of culture and customs, and improve language proficiency through actual work and life experience. In 2015, we dispatched two employees to Thailand.

■ Technical Education

ESG Efforts

Assessment of suppliers

・Non-use of banned substances ・Information on contained substances

Business Report

Green Procurement

Overview of Alpine

Respect for Individuals Alpine respects individuals, and aims to encourage the self-fulfillment of its employees.

Environmentally Friendly

■ Green Procurement Global environmental preservation requires broad approaches not only by manufacturers, but also by the suppliers of parts and materials. Alpine asks all of our suppliers to conform to our Green Procurement Standards to promote environmentally-friendly material procurement. In 2015, we issued the 12th edition of the Alpine Green Procurement Standards to enhance conformity to laws and regulations.

Alpine applies its employee system based on the following fundamental principles in accordance with its Corporate Philosophy and Conduct Guidelines.

Top Message

Alpine obtains materials throughout the world in accordance with the Alpine Material Procurement Policy. Alpine recognizes the necessity of promoting CSR not only in its business activities, but also throughout its entire supply chain, and enhancing the fulfillment of social responsibility at each company in conforming to the Supply-Chain Development Guidebook established by the Japan Electronics and Information Technology Industries Association (JEITA). Alpine added content regarding CSR in the Agreement with its suppliers to enhance its approaches in 2015.

17

Diversity

Labor Safety

We work to improve its organizational and corporate climate so that the diverse specializations of our employees can be integrated into the drive for growth.

Alpine develops a safe and healthy working environment, in which each employee can work securely.

■ Improving the working environment so all employees can exercise their specialties

■ Basic Labor Safety Concept

Approach

1

Alpine promotes the recruitment of women and actively promotes the expansion of the range of occupations. In response to the Act for the Promotion of Women’s Participation and Advancement in the Workplace that came into force on April 1, 2016, Alpine created an action plan.

Approach

■Male ■Female

(person) 35

Difficult to meet goals because of a lack of female students in the required specialties

Supporting the acquisition of specialized knowledge through in-house education

Improving the stability of female employment through the improvement of the working environment and systems ⇒ (Goal) To ensure that the difference in length of employment between male and female employees at Alpine is less than 3 years.

2020 targets: Ratio of full-time female employees – 20% *Formula: Full-time female employees/ Overall full-time employees

Ratio of female employees

Award Ceremony

30

14.4

18

25

14.0

13.7

20 15

12

5

9

7

5

1

1 2011

2012

2013

2014

12.0 2015

■ Work-Life Balance Committee – Considering desirable work styles

Annual Report 2016-2017

2011

2012

2013

2014

2015

■ Intercultural Communication In 2015, Alpine held intercultural communication seminars to improve employee communication with overseas offices, and raise awareness to avoid violating taboos and breaching etiquette in the various regions. Forty-three employees participated in the seminars to learn practical and important points to consider when interacting with individuals from a wide range of nationalities who have different values, and when giving instructions to people in different countries.

■ Safety-consciousness after the Earthquake The people of Fukushima continue to feel anxiety after the Great East Japan Earthquake and the ensuing nuclear accident. As part of our corporate responsibility, we continue to provide support needed to create an environment in which employees and their families can enjoy peace of mind. At Alpine, we have set up radiation monitoring posts throughout our company that display radiation levels in the environment and in food served in our cafeteria to demonstrate visually that employees are safe from radiation from the nuclear power plant. We also worked with a third-party radiation examination specialist from overseas to confirm our measurements. To further promote employee peace of mind, we have introduced buses equipped with whole body counters that measure the Radiation Monitoring Post level of radioactivity employees and their families are exposed to. The results are analyzed by a university professor specializing in radiation, and we offer consultation session with his support. Bus Equipped with Whole Body Counter

■ Stress Check Test From 2016, Alpine has conducted stress tests for our employees in accordance with the December 2015 revision of the Industrial Safety and Health Act. Using a 57-item questionnaire, we raise individual employee awareness about stress to prevent stress-related problems. We also use the results of the testing to improve the working environment.

Financial Data

Alpine established its Work-Life Balance Committee to discuss the achievement of desirable work styles that would enable both employees and the company to grow together, and is trying to develop in-house systems that further improve the work-life balance of each employee. In 2016, we expanded the period of reduced working hours for longterm nursing care and child rearing, implemented a trial work-at-home program for employees who teleconference with overseas subsidiaries, established a day for employees’ children to visit the workplace and a family day with the goal of promoting family-oriented activities.

18

14.1

13.0

10

0

13.8

14.0

14

12

At the 2015 Fukushima Prefecture Occupational Safety and Health Conference held to improve industrial safety and health activities, Alpine’s Onomachi Plant was recognized for its high level of safety and sanitation with the Encouragement Award presented by the Director of the Fukushima Labor Bureau. We view this award as an opportunity to enhance the safety and security of the working environment under the direction of the Safety and Sanitation Committee.

Work environment patrol

(%) 15.0

24

Receiving the Encouragement Award from the Director of the Fukushima Labor Bureau

ESG Efforts

Ratio of female hires

From now Expanding the specialization of newly graduated hires to the sciences

● Career support for women after maternity and childcare leave ● Re-entry system for women who have resigned due to child rearing or long-term nursing care for families (Implemented in April 2016) ● Extension of shorter working hours due to child rearing (Implemented in April 2016) ● Improvement of the working environment for women in global-track positions

Career Design for Women From 2016, Alpine has provided career design seminars for female employees when they are newly recruited, and in their 5th and 10th years. With these seminars, we develop a working system and organization wherein female employees can exercise their abilities through the raising of their awareness in the early stage of employment.

In the past The majority of new employees have specialized in technology and have been recruited from university engineering programs.

To create a secure and comfortable work environment, Alpine conducts thorough disaster prevention and risk management at all manufacturing bases. In accordance with in-house comprehensive safety standards, we conduct periodical global safety inspections to identify problems and take prompt corrective action.

Business Report

2

Improve the ratio of newly graduated women hires (global total and total in specific regions)

To secure a safe and comfortable working environment, we established a Safety and Sanitation Committee to monitor tidiness, cleanliness, and employee training at our facilities. With the goal of ensuring full employee participation in creating and maintaining a healthy, safe, and accident-free workplace, Alpine set three priority items in 2015 to promote the prevention of accidents, and enhanced both employee and 2015 Priority Items workplace safety through ●Thorough employee training work environment ●Raising awareness of health patrols and the provision management ●Raising awareness of traffic of monthly safety safety broadcasting programs.

Overview of Alpine

■ Support for women’s empowerment in the workplace

diversity is one of our key strengths. To enhance employee performance, Alpine hosts a Human Resource Development Conference twice each year. At this conference, optimal job rotations and training schemes are discussed.

Top Message

Alpine hires regardless of nationality, ethnicity, age, gender, religion, or handicap. We actively promote the configuration of a working environment in which all employees can demonstrate their maximum potential. At Alpine,

■ Global Safety Management

Annual Report 2016-2017

19

Environment

We make a concerted effort to advance environmental management at all our domestic and overseas bases. ■ Promotion of Environmental Management

■ Environmental Management Promotion Structure

The Alps Group Environmental Charter

As a member of the global community, Alps is committed to promoting sustainable development by protecting the beauty of nature and safeguarding our precious resources through the use of technologically advanced business practices and the efforts of its employees. Action Program

Head of Environmental Management

Head Environmental Compliance Office

Alpine Environmental Management Committee

Energy Management WG

Iwaki Main Office, Alpine Electronics, Inc.

Environmental Design WG

Yoshima Plant, Alpine Manufacturing, Inc.

Chemical Management WG Pollution Management WG

A lpine G iken’s c ontr ibution to the Fukushima Protocol Global Warming Prevention Project organized by Fukushima Prefecture has been recognized with the Grand Prize in the office & store category six years in a row. In the manufacturing category, Alpine Manufacturing received the Prize for Excellence for the second time in three years. Alpine Precision has also been recognized for its outstanding contributions. Alpine Giken was recognized for staff-wide activities, including an energy reduction contest for all employees.

Onomachi Plant, Alpine Manufacturing, Inc.

Awards Ceremony

Alpine Precision, Inc. Alpine Giken, Inc.

Waste Management WG

Asia

■ Environmental Impact (FY 2015)

Alpine Technology Manufacturing, Inc.

INPUT

Dalian Alpine Electronics Co., Ltd. Taicang Alpine Electronics Co., Ltd. Alpine Electronics (China) Co., Ltd. Dalian R&D Center Alpine Technology Manufacturing (Thailand) Co., Ltd. Alcom Electronics de Mexico S.A. de C.V. Alpine Electronics Manufacturing of Europe, Ltd.

North America Europe

We enforce green procurement and the elimination of hazardous chemical substances from parts and materials throughout our global supply chain. Energy Conservation is pursued through new equipment, enhanced awareness and other measures.

Electricity (Unit: Million kWh)

Japan 1,574 Overseas 6,031

Alpine Environmental Policy Main Policy As a member of a global society, we will incorporate the conservation of the global environment through environmentally friendly products and business activities. Specific Actions

Alpine Environmental Management Committee

Fuel (Crude oil equivalent: kl)

■ Environmentally-friendly workplaces At our head office in Iwaki, we are working on energy conservation through the utilization of waste heat. Our environmental lab becomes hot due to the many pieces of large testing equipment, so it has to be cooled with air conditioning even in the winter. By bringing in cold outside air, we are able to alleviate the use of air conditioning in the environmental lab, and we use the heat generated by the equipment to heat the lobby. This reduces the amount of power consumption by air conditioning. We also promote the effective use of exhaust heat through the recycling of the heat generated through production processes and by the test equipment at other offices.

Japan 444

Overseas 1,233

Municipal water supply

Japan 75.9

Overseas 166.3

Groundwater (Unit:t)

Japan 4.8

Overseas None

Purchased parts (semiconductors etc.) Processed parts (molded parts etc.) Raw materials (plastic etc.)

Fuel (Fuel oil conversion: KI)

Japan74.4 Overseas Not tabulated

OUTPUT

Suppliers The Alpine Green Procurement System is deployed globally to ensure the purchase of parts and materials with low environmental impact.

Alpine Group All Alpine Group production bases around the world acquire ISO14001 certification to ensure that development and manufacture of products exert a low environmental impact. Our business facilities also work to reduce environmental impact through green procurement, zero emissions, and other initiatives. In Japan (6 affiliates) ●Alpine Electronics, Inc.

“Zero emissions” activities are pursued to reduce emission output. We also work to reduce the release of chemical substances into the atmosphere and cut CO2 emissions from logistics operations.

Products

Car navigation systems, monitors, car stereos, etc. Total Waste (Unit: t)

Japan 626

Overseas 4,962

Emissions into the atmosphere (Unit: t)

Japan 10,404

Overseas 35,029

●Alpine Manufacturing, Inc. ●Alpine Precision, Inc. ●Alpine Giken, Inc., etc. Overseas (13 affiliates) ●U.S. (3) ●Europe (4) ●Asia (6)

Logistics We reduce energy consumption in transportation through the review of transport routes, the use of shared shipping, and the improvement of load efficiency.

Emissions into the atmosphere (Unit: t)

Japan 197.8 Overseas Not tabulated

Customers We continue reducing energy consumption along with reductions in product weight to lower environmental impact caused by the use and disposal of the products.

Financial Data

1. Environmentally friendly products We promote the development and integration of environmentally-friendly technologies at all stages of product life cycle to provide environmentally friendly products. 2. Environmentally friendly business activities Through the promotion of energy conservation, recycling, and waste reduction, we incorporate business activities with minimal environmental impact. 3. Environmental preservation systems and operation We comply with domestic and international environmental standards, customer requirements and self-implemented standards to incorporate appropriate operation and continuous improvement of environmental management systems.

While the use of chemicals is unavoidable in the production of items required to meet the needs of society, Alpine recognizes the potential for many chemicals to have a detrimental impact on the environment or human health if misused or mismanaged. For this reason, Alpine views the proper management of chemicals and avoiding the use of substances that have a significant environmental impact as important elements of business. Alpine fulfills its corporate duty to reduce environmental impact through the creation of standards and proper management of the storage, use and release of chemical substances used in production in keeping with laws and regulations.

ESG Efforts

Placing priority on environmental preservation, we at Alps will: 1. Develop products in light of environmental concerns 2. Engage in environmentally friendly production and sales 3. Conserve our natural resources 4. Reduce or eliminate waste 5. Increase recycling activities

Internal Environmental Auditor

■ Reduction of Hazardous Chemicals

Lobby at Iwaki office

20

Annual Report 2016-2017

Business Report

Basic Philosophy

President & CEO G.M. of Environmental Affairs

■ Recognition by Local Government

Overview of Alpine

Policies and measures relating to environmental management are determined at the Alpine Environment Conference, with representatives of business locations in Japan in attendance and the General Manager of Environmental Affairs as chairperson. Finalized policies and measures are then implemented both in Japan and overseas by the Head of Environmental Management and supervisory staff at each location. Specific issues, such as energy saving and waste reduction are addressed through separate working groups.

via air. In addition, we have concentrated our warehouses, shortened shipping routes, made use of shared shipping, and improved load efficiency to improve the efficiency of domestic surface freight within individual countries, all of which has contributed to a reduction of energy consumption in shipping: within Japan, our fiscal 2015 domestic truck shipping CO2 emissions dropped 44% compared to fiscal 2013.

To fight global warming, it is absolutely vital to reduce CO2 emissions in shipping parts and products. Of the types of shipping available, air freight has the greatest impact on the environment. Alpine’s planned global production schedules and improvements to management have included the transition from air freight to concentrated marine shipping. In fiscal 2015, we achieved a 53% reduction over fiscal 2013 in the amount we have shipped overseas

Top Message

Alps and the Alpine Group management is designed to address environmental issues that are viewed among the more serious management challenges. We established our Environmental Policy and Mid-term Plan based on the Alps Group Environmental Charter, and work on the provision of environmentally friendly products, performing environmentally friendly business activities, and establishing a global environmental management structure with a comprehensive approach taking by all group companies.

■ Environmentally Friendly Logistics

Annual Report 2016-2017

21

Local Community

Corporate Governance

Alpine pursues active dialogue with the regional communities it operates in around the world to identify ways we can contribute to the development of education and culture.

To ensure efficient, sound, and transparent management, Alpine works hard to strengthen our corporate governance structure.

■ Hands-on Manufacturing Class

■ Basic Approach to Corporate Governance

■ Support for Children’s Facilities (China)

Visit to Sun Village Children’s Facility

Giving a class at a local school

■ Alpine Summer Festival 2015

■ Corporate Governance Structure A lpine transitioned from a c ompany with board of company auditors to a company with an audit and supervisory committee upon approval at the 50th Ordinary General Meeting of Shareholders held on June 22, 2016. The enhancement of auditing and supervising functions in close cooperation with accounting auditors and the Internal Audit Division, the Audit and Super visory Committee, which is independent from the Board of Directors, further strengthens our corporate governance structure, and improves the soundness and transparency of corporate management. T h e A l p i n e C o r p o r ate G ove r n a n c e Po l i c y wa s established to facilitate our ability to realize effective corporate governance and fulfill our responsibilities to all of our stakeholders - shareholders, customers, local

communities, and employees. In line with our shift from a company with a board of company auditors to a company with an audit and super visor y committee, we review the concept of our corporate governance utilizing the corporate governance policy to recognize the need for more aggressive governance aiming to achieve the sustainable growth of the company and improve mid- and long-term corporate value. We work on the fulfillment of this policy, and the establishment and smooth operation of a new corporate structure including new Audit and Supervisory Committee in the mid-term business plan. Click here for more information about the Alpine Corporate Governance Policy. http://www.alpine.com/j/investor/  information/pdf/governance_policy_16.pdf

General Meeting of Shareholders Donation ceremony Making Proposals/ Reporting

Reporting/Statement of Opinion

Election/dismissal

Election/dismissal

■ Company Tours for Students

Alpine Summer Festival 2015

■ Mangrove planting (Thailand) A l p i n e p l a n t e d m a n g r ove s a t t h e S i r i n d h o r n International Environmental Park (Phetchaburi Province) in November 2015 as a part of our CO2 emission reduction activities. After participating in an orientation, 55 Alpine employees planted approximately 65 mangroves at the park.

ESG Efforts

The Alpine Summer festival was held in July at Alpine headquarters in Iwaki. We had an employee Yosakoi dance competition, fireworks display, and live music by a famous Japanese musician. We also had a manufacturing lesson and an office tour for employees' families. A total of 7,500 visitors enjoyed the festival. For more than 20 years, this festival has been a precious opportunity to create a connection between Alpine customers, suppliers, employees, their families, and the local community.

Alpine installed our 700D car navigation system and HCE-C920D rearview camera on NV200 Vanette multipurpose vehicles donated by Nissan Motors to eight towns and villages in Futaba County, Fukushima Prefecture.

heightening corporate value.” Our basic approach places importance on the maximization of benefits for shareholders and all other stakeholders by maximizing corporate value and delivering benefits directly or indirectly to stakeholders in a balanced way to satisfy their respective interests.

Business Report

■ Donation to Areas Affected by Great East Japan Earthquake

Alpine manufactures on-board information systems and equipment as a member of the Alps Group led by Alpine’s parent company, Alps Electric Co., Ltd. The Alps Group defines corporate governance as the “establishment and operation of frameworks for the realization of efficient and appropriate decision-making and execution of duties by senior management, prompt reporting of outcomes to stakeholders, and sound, efficient and transparent business administration for the purpose of

Overview of Alpine

In China, labor unions form the core support for Sun Village, an establishment that provides food, shelter, and clothing, as well as medical care, education, and other forms of support to underprivileged children. In 2015, 40 staff visited the village to give daily-use items and school supplies to the children.

Top Message

At the Alpine Manufacturing Onomachi Plant, we are engaged in interaction with the community that takes advantage of our characteristics as a manufacturing company. Using our plant as living educational material, we have provided hands-on manufacturing classes at local elementary schools since 2012. We also visited a local elementary school in March 2015 to give a class on electromagnetics to fifth graders. They learned about electromagnets and used them to make speakers out of paper cups.

Once a year at the Japan Office, Alpine holds an employee family tour of the workplace. For the children, it’s a valuable opportunity to get an up-close look at what their mothers and fathers do at work. We also have a company tour and training event for local high school students. In 2015, we provided classes such as “Japan seen from overseas” and “Experiencing manufacturing” for 40 first-year students from Iwaki High School, which was designated as a Super Science High School in the area.

Election/dismissal

Reporting Audit, etc.

Board of Directors Reporting

Selection/ Dismissal

Audit and Supervisory Committee

Explanation of nomination/remuneration

(Secretariat for the Board of Directors)

Whistle-blowing

Account Auditor

Internal Directors Reporting Instruction

President & CEO Corporate Planning Office

External Directors

Coordination/ Reporting

Coordination/ Reporting

Monitoring

Reporting

Ethics Hotline Coordination

Audit and Supervisory Committee Secretariat

Coordination

Compliance/Audit Office

Auditing

Auditing

Whistle-blowing

Coordination Internal audit for organizations and the functions of corporate executives Instruction/Reporting

Sales Division

Technology Division

Production Division

Quality Division

Administrative Division

Self-Checking by Each Division

Planting Activity

22

Annual Report 2016-2017

Affiliates (Domestic/Overseas)

Financial Data

Management Company tour and training event for local high school students

*The Super Science High School (SSH) Project: the Ministry of Education, Culture, Sports, Science and Technology designates high schools that prioritize education in science, technology and mathematics.

Annual Report 2016-2017

23

■ Internal Control

■ Audit and Supervisory Committee

As a member of the Alps Group, Alpine places a priority on following the founding principles of the Alps Group led by Alps Electric Co., Ltd. We established our basic philosophy and conduct guidelines for compliance in accordance with the Alps Group management regulations, and promote compliance throughout the company and our subsidiaries. In addition, we continue developing our internal control system and structures to secure proper business management in accordance with the Companies Act and the Ordinance on

Enforcement of the Companies Act, and conduct proper and effective business in all Alpine Group companies. Please read “Internal Control System” in our Corporate Governance Report for more detail on the structures of our internal control system. http://www.alpine.com/e/investor/library/ governance.html

Alpine Electronics, Inc. [On-board Information Equipment]

Alps Logistics Co., Ltd. [Logistics]

Audit and Supervisory Committee

Audit and Supervisory Committee

Audit and Supervisory Committee

Group Audit Liaison Council (Coordination among Audit and Supervisory Committee members and Internal Audit Division)

Office of Audit and Supervisory Committee

Office of Audit and Supervisory Committee

Liaison Councils

Audit and Supervisory Committee Member

Independent Corporate Director

Reason for Appointment

Hideo Kojima





His experience in audits as a certified public accountant and as an external executive officer for other companies will be an asset to our business management.

Hideo Kojima C.P.A. Office Sumitomo Heavy Industries, Ltd. (External Director)

President

Satoko Hasegawa





Her experience as a lawyer, an external executive officer at other companies, and her wealth of global experience will enhance our business management.

STW & Partners Asahi Net, Inc. (External Director) Hakudo Co., Ltd. (External Auditor)

Naoki Yanagida





The specialized knowledge and experience he has developed through his experience as a lawyer, and his informed opinion in a wide range of areas will facilitate our business management.

Yanagida & Partners Sompo Japan Nipponkoa Holdings, Inc. (Outside Auditor)

Board of Directors

President

Other Important Appointment

President

Corporate Planning

Corporate Planning

CSR

CSR

CSR

Accounting

Accounting

Accounting

ESG Efforts

(Advance discussions/ reporting on important matters of the group)

Name

Board of Directors

Board of Directors (Deliberation/ reporting of important matters of the group & electronic components business)

Presidents Meeting/ Group Management Meeting

Office of Audit and Supervisory Committee

shareholders, and other important matters at the Board of Directors meetings. Alpine appoints external directors in accordance with its standards for the nomination of directors, including the Alpine Standards for Independence. In addition, we designate these individuals as independent corporate directors upon consent and report such to the Tokyo Stock Exchange.

Business Report

Divisions & Departments

Alps Electric Co., Ltd. [Electronic Components]

Alpine appoints three External Directors to enhance the functions of the Board of Directors. Each External Director focuses on ensuring legal compliance and strengthens the supervision function over the company’s operation through active dialogue and advice on the selection and dismissal of top management, remuneration, supervision on conflict of interest among the company, top management, controlling

Overview of Alpine

Presidents

Top Message

Directors

company’s business and include full-time employees. The Committee also provides advice to the company’s top management at meetings of the Board of Directors and other important meetings in cooperation with the Internal Audit Division. Assistants for the Audit and Supervisory Committee shall be assigned, and their independence from the Board of Directors (excluding those who are the members of the Audit and Supervisory Committee) shall be secured.

■ External Directors

Alps Group Internal Control Structure

Audit and Supervisory Committee Members

M e mb e r s o f t h e A lp ine A u di t an d Sup e r v i s o r y Committee, of which the majority are external auditors, strive to make objective judgments while acting independent of the Board of Directors. The Committee performs audits of the company’s operations through the combined effectiveness of external Audit and Supervisory Committee members, consisting of two lawyers and an accountant, and internal members of the Committee, who are familiar with the

Corporate Planning

Legal Affairs

Legal Affairs

Legal Affairs

Personnel Affairs

Personnel Affairs

Personnel Affairs

Compliance, etc.

Compliance, etc.

Compliance, etc.

■ CSR Committee Agreement on Alps Group Administration and Management Alps Group Management Paradigm (Alps Group Management Regulations/ Compliance Charter/ Environmental Charter)

■ Board of Directors & Board of Directors Meeting

24

Annual Report 2016-2017

removed by resolution passed at a General Shareholders Meeting by a majority vote of shareholders who are in attendance and whose number holds one third or more of the voting rights of shareholders entitled to the exercise thereof, and that cumulative voting shall not be employed. In accordance with rules and bylaws governing the Board of the Directors, matters that require a resolution of the Board of the Directors are examined in advance for legal, accounting, tax and economic soundness to ensure compliance and rationality.

Internal Control Subcommittee Alps Group CSR related Divisions and Departments Coordination

CSR Committee

CSR Promotion Organization Secretariat

*RC Subcommittee Information Management Subcommittee Labor Environment/Society Subcommittee Risk Management Subcommittee Environmental Management Subcommittee Supply Chain Subcommittee Consumer Subcommittee

*Risk Management & Compliance (RC) Subcommittee

Annual Report 2016-2017

Financial Data

The Alpine Board of Directors, which is composed of 11 directors (excluding Audit and Supervisory Committee members) and 4 directors who are Audit and Supervisory Committee members (3 are external directors), discusses and makes decisions about important matters regarding the Alpine Basic Business Policy and Mid-term Business Plan, and audit and monitor the business performance. The Board of Directors makes decisions about all important matters through discussion at monthly meetings and extraordinary general meetings, which are held as necessary. The articles of incorporation specify that directors shall be elected and

Alpine CSR activities are carried out under the direction of the CSR Committee, which is comprised of eight subcommittees. In order to ensure that our CSR activities reflect a global perspective, we continue to improve our management structure to maintain an environment that enables individual employees to exercise their abilities in accordance with Alpine CSR Guidelines established in reference to ISO26000 standards. Since 2014, Alpine has strengthened its approaches to the creating shared value (CSV) project to increase its social and corporate values to promote more strategic CSR activities. In 2015, we defined the materiality of CSR and included it in our medium-term CSR plan while taking the expectations of society and our stakeholders into account.

25

Compliance

Risk Management

We are committed to thorough compliance across the group with respect to laws, social norms, and ethics.

To ensure the sustainability and reliability of our corporate activities, Alpine analyzes a wide range of possible risk factors.

■ Compliance Policy

■ Risk Management Approach

Fundamental Philosophy

As a member of the global community, Alps is committed to displaying fairness in its corporate activities, as well as to taking responsible and sensible action in order that Alps may continue to develop with society while making valuable social contributions.

Action Guidelines

The Alps and Alpine Groups recognize as key risk management themes the prevention of risks that have a potentially large impact on business, and appropriate action and quick recover y when they do occur. Initiatives are advanced under the policy shown on the right.

1. Alps will abide by the laws and ordinances that govern its business and will ensure sensible behavior to avoid involvement in antisocial acts.

●We will continue business activities as long as we can, and do everything we can to maintain the supply of products and the provision of services to customers. ●We will endeavor to preserve both tangible and intangible company assets and make efforts to minimize damage using the most suitable methods.

3. Alps will aim for maximum product safety and quality while engaging in fair trade and competition with other companies, and maintaining strong ties with authorities. 4. Alps will disclose information fairly to shareholders and other stakeholders.

●We will demonstrate responsible conduct, take quick and appropriate action, and strive to restore operations when risks do eventuate in order to earn the trust of customers, shareholders and all other stakeholders.

5. Alps will provide a safe and user-friendly workplace, and will respect the character and individuality of employees. 6. Alps will endeavor to manage and use society's assets, including goods, money and information, in a suitable manner without displaying behavior that could be of disadvantage to society.

Business Report

■ Business Continuity Management ■ Compliance Structure

Alpine has an internal whistleblowing system for all employees in Japan. Called the “Ethics Hotline,” employees can call for consultation on issues related to ethically questionable and illegal behavior. A whistleblower protection clause is included in our internal regulations. This system acts to help detect potential problems in advance and enable prompt resolution. Furthermore, Alpine is expanding this Ethics Hotline and other consultation systems at overseas bases in a manner suitable to the situation in each country. Currently, we have initiated the systems in major sales, development and production bases around the world.

■ Compliance Education Alpine Ethical Guidelines (Alpine’s 10 Commandments) Person Object Property Information

Disclosure of personal information is prohibited.

Ban on Discrimination

Violent force and language, sexual harassment, and discrimination are prohibited.

Product Safety

Give due consideration to the safety and quality of products.

Environmental Concern

Give due consideration to the natural environment.

Corporate Property

Personal use of corporate property is prohibited.

Intellectual Property

Violation of intellectual property of other organizations is prohibited.

Corporate Secret

Personal use and disclosure of corporate secrets is prohibited.

Ban on Insider Trading

Dealing of the company’s stock by the employees before disclosure of corporate information is prohibited.

Fair Trade

Comply with antitrust legislation and every law and rule.

Donations and Reception

Receiving donations and reception beyond a reasonable extent is prohibited.

JAPAN

Ethics education for engineers was carried out for new recruits. Contract management, antitrust law and human rights/harassment education was provided to new managers. Employees transferring overseas were made familiar with case studies by area (antitrust law, bribery, etc.). Antitrust law education was carried out for sales department personnel, and contract management education was given to personnel in charge of contract business.

USA

Legal compliance seminars were carried out for managerial personnel, and education regarding confidential information protection, prevention of third-party infringement on products and intellectual property, crosscultural understanding, and human rights/harassment was carried out for employees.

Europe

Seminars on antitrust law, anti-bribery law, and advanced confidential information protection were held for employees.

China

Education on legal issues in electronic business transactions, response to the revised Chinese Environmental Protection Law, and prevention of excessive entertainment and bribery was given to employees. Education regarding Alpine’s ethical perspective and legal compliance was carried out for new employees.

South Korea

Preventive education was carried out on sexual harassment in the workplace.

Safety Confirmation System Development Alpine adopted an Internet-based comprehensive safety confirmation system after the Great East Japan Earthquake in 2011, and carried out periodical drills for preparation.

■ Alpine Fire Brigade Iwaki Headquarters set up the Alpine Fire Brigade as a fire defense organization for self-protection according to the requirement for large-scale properties under the Fire Service Act. The Fire Brigade is made up of employees and conducts periodical training (fire drills, use of fire extinguishers and AED, etc.) twice monthly to prepare for initial firefighting operations, emergency evacuation and aid in time of disaster.

Partnership Office for Firefighting Certified by Iwaki City Alpine Iwaki Headquarters was certified by Iwaki City Fire Defense Headquarters as a partnership office for firefighting in June 2015. This partnership office certification system was established by the Fire and Disaster Management Agency of Japan to acknowledge each company’s cooperation in firefighting activities as a social contribution and to improve regional disaster control systems through such cooperation by companies.

Periodical Training

Certification as a partnership office for firefighting

26

Annual Report 2016-2017

Annual Report 2016-2017

Financial Data

Trading

Personal Information

At Alpine, the legal af fairs depar tments at each corporate center in Japan, the United States, Europe and China provide compliance education programs according to regional characteristics.

We have established a business continuity plan (BCP) that keeps pace with environmental changes in order to ensure the safety of our employees and their families, and minimize the impact on our customers in the event of an emergency situation. In 2014, we strengthened collaboration with group companies and enhanced our business continuity plan. In 2015, we worked on the establishment of a disaster action system to handle the initial response to customers and media by the Alpine Disaster Action Headquarters in time of disaster.

ESG Efforts

In accordance with the Alps Group Compliance Charter, Alpine incorporated basic rules into the Alpine Ethical and Legal Compliance Policy, which has been rolled out to all group companies, to ensure that employees act fairly and appropriately as members of society. Regulations reflecting the laws of each countr y have been added at each location around the world to implement guidelines that bear closer relevance to daily actions. Additionally, internal media such as e-Learning and Legal News are utilized to actively spread specific legal knowledge and improve individual awareness.

■ Ethics Hotline

Overview of Alpine

2. Alps will respect foreign cultures and customs, and will contribute to local community development.

Risk Management Policy ●We will place top priority on ensuring the safety of employees, all people on company premises (including visitors, related company employees, on-site subcontractors and temp staff) and families of employees.

Top Message

As a member of the Alps Group, Alpine appeals to all its organizations and employees to make a concerted effort at all times to act responsibly and sensibly in line with the six action guidelines included in the Alps Group Compliance Char ter with the aim of ensuring fair management in keeping with the principles of law, social requirements, and corporate ethical standards. Here we believe it to be important to go beyond the formalities of observing laws and rules by proactively taking appropriate action through an understanding of why those laws and rules are necessary, and what their purpose and significance are.

Alps Group Compliance Charter

27

Information Security

Alpine CSR

We enhance information management to maintain our standing as a business partner that merits customers trust and ensures satisfaction.

We consider CSR activities to be the embodiment of our corporate principles.

■ Information Security Policy

■ Materiality issues

20 (unit: case)

15

13

10

7

8

5

Materiality matrix Very high

2013

2014

●Provision of products and services to solve social problems ●Sustainable supply chain management

Top priority

●Participation of diverse human resources (diversity) ●Prevention of corruption

●Protection of natural environment ●Establishment of governing structure ●Responsible political involvement

2015

High

■ 2015 Summary

●Customer satisfaction and protection of privacy ●Involvement with local community

●Ensuring of appropriate labor conditions and workplace environment ●Dialog with employees and human resources development ●Ensuring of accountability and transparency ●Compliance

Very high

Priority for Alpine

Business Report

0

●Mitigation of climate change impact (reduction of GHG*) ●Use of renewable resources ●Prevention of pollution

Overview of Alpine

A lpine ac c elerated its existing approaches to information management and speed of business performance in 2015. One example is the adoption of a bring-your-own-device (BYOD) program to establish an IT environment that enables the flexible and safe use of a wide range of business styles.

Incidents related to information security management

Alpine has identified CSR materiality from 2015 for reflection to our CSR activities. To identify materiality issues, we conduct assessments from the standpoints of stakeholder interest and Alpine priorities with reference to ISO26000 and international standards for corporate social responsibility. We reflect opinions provided by the internal CSR Committee and submit assessments to review by external experts. While all CSR activities are important, we identified key topics to incorporate into the mediumterm CSR plan as key concerns, and we reinforce our CSR management to monitor the status of each issue through periodical review.

Top Message

■ Approaches to Information Management

We experienced eight incidents related to information security management in 2015. Fortunately, however, none of these had an adverse impact on our customers.

Expectations from stakeholders

The Alpine Group fully utilizes information it has created and obtained through its business activities to provide high added-value products and services. We c onsider such information to be impor tant property, and recognize the great social responsibility placed on us to care for it properly. We exercise due care in the handling of such information, and continue working on information security as an important business tasks.

■ Incidents related to Information Security Management

*GHG: Green House Gases

Each subcommittee under the Alpine CSR Committee worked on individual themes according to individual issues of materiality. Subcommittee

We strive to maintain fair and transparent business management through timely and appropriate information disclosure. ■ Actively Promoting IR We publish the Alpine Report, a shareholder newsletter, for investors in Japan in June and November, and publish an annual repor t for overseas investors detailing our achievements and financial standing. We also provide timely information by, for example, posting quarterly statements of accounts in both English and Japanese on our website. At Alpine, we hold semi-annual briefings on financial results for securities analysts and institutional investors, w h e r e i n w e d i s c u s s A l p i n e’s b u s i n e s s c o n d i t i o n s , management policy, and growth strategy. Additionally, as the need arises, we also arrange opportunities for private discussions and observation for institutional investors. To help individual shareholders better understand our business and our products, we also hold informational meetings for individual shareholders. Informational meeting for individual shareholders

Major Efforts in 2015 (1) Realization of long-term support for OEM and development of LCD recycling technology to reduce the environmental load (2) Improvement of telephone contact for customers and our customer support through the posting of frequently asked questions (FAQ) about our products and providing callers with information on wait times on our website

Environmental Management Subcommittee

(1) Promoting environmentally friendly designs through the selection of materials and the standardization of parts (product size and weight reduction, energy saving, etc.) (2) Implementation of environmental load reduction activities with the participation of all employees (lower luminance lighting campaign, etc.)

Supply Chain Subcommittee

(1) Implementation of environmental load reduction activities throughout the global supply chain in line with the publication of Alpine Green Procurement Standards (12th version) (2) Conducting surveys on conflict minerals throughout the supply chain in cooperation with suppliers

Risk Management Subcommittee

(1) Global standardization of the disaster control initial response manual (2) Development of the environment to obtain Occupational Health and Safety Assessment Series (OHSAS) certification for major production bases

Labor Environment and Society Subcommittee

1) Considering the implementation of a new system designed by the Work-Life Balance Committee to improve employee working conditions (2) Considering the expansion of new female graduate hires and implementation of seminars on career design for women aiming to expand opportunities for female employees to exercise their abilities

Internal Control Subcommittee

(1) Compliance with the revised Companies Act, and creation of a corporate governance code (2) Development and assessment of internal control regarding financial reports

*RC Subcommittee

(1) Enhancement of global cooperation for RC activities (2) Provision of education on compliance

Information Management Subcommittee

(1) Promoting an increase in the level of information management throughout our supply chain (2) Establishment of an IT environment capable of flexibly and safely handling a wide range of business styles

Financial Data

Consumer Subcommittee

ESG Efforts

Information Disclosure

*Risk Management & Compliance (RC) Subcommittee

28

Annual Report 2016-2017

Annual Report 2016-2017

29

Consolidated Financial Statements Consolidated Balance Sheets

(Millions of yen) As of March 31, 2015

As of March 31, 2016

Assets

As of March 31, 2015

As of March 31, 2016

Liabilities

Current assets

Current liabilities 49,282

Notes and accounts payable - trade

28,818

27,088

Notes and accounts receivable - trade

42,238

36,742

Accrued expenses

11,819

8,553

Merchandise and finished goods

21,830

20,885

Income taxes payable

2,919

893

857

1,003

Provision for bonuses

2,191

2,027

Raw materials and supplies

7,970

8,236

Provision for directors’ bonuses

67

42

Deferred tax assets

2,739

1,168

Provision for product warranties

5,942

5,617

11,447

13,323

Other

6,025

6,737

(280)

(260)

57,784

50,961

142,952

130,382

Deferred tax liabilities

4,301

4,697

Net defined benefit liability

2,733

3,590

60

55

Other

2,207

2,073

Total non-current liabilities

9,302

10,416

67,086

61,377

Other Allowance for doubtful accounts Total current assets Non-current assets

Buildings and structures

Provision for directors’ retirement benefits

27,151

26,863

(17,819)

(18,106)

Buildings and structures, net

9,331

8,756

Machinery, equipment and vehicles

25,337

24,109

(18,339)

(17,833)

6,998

6,275

Shareholders’ equity

53,217

52,954

Capital stock

25,920

25,920

(46,824)

(46,793)

Capital surplus

24,905

24,905

6,393

6,160

Retained earnings

73,835

82,115

5,041

4,946

Treasury shares

(713)

(1,407)

199

189

123,949

131,534

Accumulated depreciation

(66)

(71)

Leased assets, net

132

117

7,937

7,653

1,054

1,150

(3)

(5)

28,952

27,408

Revaluation reserve for land

(1,310)

(1,310)

2,601

2,668

Foreign currency translation adjustment

12,689

5,914

(801)

(1,803)

18,511

10,449

32

54

1,731

1,766

144,223

143,805

211,309

205,182

Accumulated depreciation

Machinery, equipment and vehicles, net Tools, furniture, fixtures and dies Accumulated depreciation Tools, furniture, fixture and dies, net Land Leased assets

Construction in progress Total property, plant and equipment Intangible assets Investments and other assets

25,343

Investments in capital

1,485

16,246

50

14

732

702

1,597

2,423

(12)

(6)

36,803

44,724

68,357

74,800

211,309

205,182

Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets

Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges

Total accumulated other comprehensive income Subscription rights to shares Non-controlling interests Total net assets Total liabilities and net assets

Financial Data

32,950

Deferred tax assets

Net assets

Remeasurements of defined benefit plans

Investment securities

Net defined benefit asset

Total liabilities

ESG Efforts

Accumulated depreciation

Annual Report 2016-2017

Non-current liabilities

Business Report

Property, plant and equipment

Total current liabilities

Overview of Alpine

56,150

Top Message

Cash and deposits

Work in process

30

(Millions of yen)

Annual Report 2016-2017

31

Consolidated Statements of Income and Comprehensive Income

(Millions of yen)

Consolidated Statements of Cash Flows

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2015

March 31, 2016

March 31, 2015

March 31, 2016

Net sales

294,560

273,056

Cost of sales

242,923

231,107

Gross profit

51,636

41,949

Depreciation

Selling, general and administrative expenses

40,112

36,515

Increase (decrease) in net defined benefit liability

Operating income

5,434

Interest income

237

276

Dividend income

467

415

Share of profit of entities accounted for using equity method

675

1,256

1,931



531

577

3,843

2,525

Cash flows from operating activities Profit before income taxes

(4)

Increase (decrease) in accrued expenses

1,353

(3,009)

Interest and dividend income

(705)

(692)

22

379

(675)

(1,256)

(99)

(64)



(15,620)

1,449

4,956

869

(1,281)

(4,075)

(39)

(469)

(46)

(263)

(1,154)

19,946

11,870

Interest expenses

22

379



842

Decrease (increase) in inventories

Sales discounts

128

141

Commission fee

65

65

Overseas withholding tax

53

196

Increase (decrease) in notes and accounts payable - trade Increase (decrease) in provision for product warranties

Other

97

165

Other, net

Ordinary income

367

1,789

Subtotal

15,000

6,170

Interest and dividend income received Interest expenses paid

Extraordinary income Gain on sales of non-current assets Gain on sales of shares of subsidiaries and associates



91 15,620

Income taxes paid Income taxes refund Net cash provided by (used in) operating activities

919

(22)

(379)

(3,768)

(10,428)

163

60

17,380

2,043

52



Compensation income

435

315

Subsidy income

650



Purchase of property, plant and equipment

(6,854)

(6,650)

14

175

273

203

1,275

16,203

Proceeds from sales of property, plant and equipment

Other Total extraordinary income Extraordinary losses Loss on sales and retirement of non-current assets

72

65

Loss on valuation of investment securities



73

Total extraordinary losses

72

138

16,202

22,234

4,394

8,666

Profit before income taxes Income taxes - current Income taxes - deferred Total income taxes Profit

(1,089)

2,612

3,304

11,278

12,898

10,955

Profit attributable to Profit attributable to owners of parent Profit attributable to non-controlling interests

12,704

10,698

193

256

Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges

1,347

(1,912)

(3)

(1)

5,724

(4,233)

95

(1,002)

Share of other comprehensive income of entities accounted for using equity method

1,579

(1,082)

Total other comprehensive income

8,743

(8,233)

21,641

2,722

21,241

2,637

400

85

Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax

Comprehensive income

ESG Efforts

Gain on liquidation of investment securities

122

1,062

Business Report

(293)

Overview of Alpine

229

Interest expenses

Total non-operating expenses

7,240

(53)

Foreign exchange losses

Total non-operating income Non-operating expenses

22,234

6,682

Increase (decrease) in provision for directors’ retirement benefits

Share of (profit) loss of entities accounted for using equity method Loss (gain) on sales of property, plant and equipment Loss (gain) on sales of shares of subsidiaries and associates Decrease (increase) in notes and accounts receivable - trade

Other

16,202

Top Message

11,523

Non-operating income

Foreign exchange gains

(Millions of yen)

Cash flows from investing activities

Purchase of intangible assets

(911)

(843)

Payments of loans receivable

(1,729)

(3,728)



20,569



(14,005)

1,660

1,258

Proceeds from sales of shares of subsidiaries and associates Payments for investments in capital Collection of loans receivable Other, net Net cash provided by (used in) investing activities

31

(228)

(7,529)

(3,425)

(700)

(700)

Cash flows from financing activities Purchase of treasury shares Cash dividends paid

(1,738)

(2,417)

Proceeds from share issuance to non-controlling shareholders

204



Dividends paid to non-controlling interests

(34)

(50)

Other, net

(61)

(56)

(2,330)

(3,224)

1,930

(2,367)

Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents

9,450

(6,973)

Cash and cash equivalents at beginning of period

46,680

56,130

Increase (decrease) in cash and cash equivalents resulting from change of scope of consolidation



125

56,130

49,282

Cash and cash equivalents at end of period

Comprehensive income attributable to

32

Annual Report 2016-2017

Financial Data

Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests

Annual Report 2016-2017

33

Consolidated Statements of Changes in Equity Fiscal year ended March 31, 2015

(Millions of yen)

Fiscal year ended March 31, 2016

(Millions of yen)

Shareholders’ equity Capital stock Balance at beginning of current period

25,920

Capital surplus

Retained earnings

24,905

63,272

Cumulative effects of changes in accounting policies

Shareholders’ equity

Treasury shares

Total shareholders’ equity

(13)

Restated balance

25,920

24,905

62,870

Balance at beginning of current period

114,085

(402)

25,920

Capital surplus

Retained earnings

24,905

73,835

Treasury shares

Total shareholders’ equity

(713)

123,949

Cumulative effects of changes in accounting policies

(402)



Restated balance

113,682

(13)

Capital stock

25,920

24,905

73,835

(713)

123,949

Changes of items during period

Changes of items during period (1,738)

(1,738)

Dividends of surplus

(2,418)

(2,418)

Profit attributable to owners of parent

12,704

12,704

Profit attributable to owners of parent

10,698

10,698

Purchase of treasury shares

(700)

1

1

(0)

Transfer of loss on disposal of treasury shares

0

(0)

Purchase of treasury shares Disposal of treasury shares

(0)

Transfer of loss on disposal of treasury shares



Total changes of items during period

- 25,920



10,965

(699)

10,266

24,905

73,835

(713)

123,949

Total changes of items during period

Revaluation reserve for land



(1,310)

Total Foreign Remeasure- accumucurrency ments of lated other translation defined compreadjustment benefit plans hensive income 5,554

(899)

9,974

Subscription rights to shares

Noncontrolling interests

25,920

1,158





(1,310)

5,554

(899)

9,974

1,158



Valuation difference on availablefor-sale securities

Total net assets

125,218 (402)

6,629

(0)



- 24,905

8,280

(694)

7,585

82,115

(1,407)

131,534

Accumulated other comprehensive income

Cumulative effects of changes in accounting policies Restated balance

5

124,816

Changes of items during period

Balance at beginning of current period

7,937

Deferred gains or losses on hedges (3)

Revaluation reserve for land

(1,310)

Total Foreign Remeasure- accumucurrency ments of lated other translation defined compreadjustment benefit plans hensive income 12,689

(801)

18,511

Subscription rights to shares

32

Noncontrolling interests

1,731

Cumulative effects of changes in accounting policies Restated balance

Total net assets

144,223 -

7,937

(3)

(1,310)

12,689

(801)

18,511

32

1,731

144,223

Changes of items during period

Dividends of surplus

(1,738)

Dividends of surplus

(2,418)

Profit attributable to owners of parent

12,704

Profit attributable to owners of parent

10,698

Purchase of treasury shares

(700)

Disposal of treasury shares Transfer of loss on disposal of treasury shares Net changes of items other than shareholders’ equity

ESG Efforts

Deferred gains or losses on hedges



Balance at end of current period

Accumulated other comprehensive income

6,629

5

Business Report

Balance at end of current period

Balance at beginning of current period

(700)

Net changes of items other than shareholders’ equity

Net changes of items other than shareholders’ equity

Valuation difference on availablefor-sale securities

0

(700)

Overview of Alpine

Disposal of treasury shares

(700)

Top Message

Dividends of surplus

1 -

1,307

(3)



7,134

98

8,536

32

572

9,141

Total changes of items during period

1,307

(3)



7,134

98

8,536

32

572

19,407

Balance at end of current period

7,937

(3)

(1,310)

12,689

(801)

18,511

32

1,731

144,223

Purchase of treasury shares

(700)

Disposal of treasury shares Transfer of loss on disposal of treasury shares Net changes of items other than shareholders’ equity

5 -

(283)

(1)



(6,774)

(1,001)

(8,061)

22

35

(8,003)

Total changes of items during period

(283)

(1)



(6,774)

(1,001)

(8,061)

22

35

(418)

Balance at end of current period

7,653

(5)

(1,310)

5,914

(1,803)

10,449

54

1,766

143,805

Financial Data

34

Annual Report 2016-2017

Annual Report 2016-2017

35

Contact Information:

Corporate Planning Office, Alpine Electronics, Inc. 20-1 Yoshima Industrial Park, Iwaki City, Fukushima 970-1192 Tel: +81-246-36-4111 (main line) URL: http://www.alpine.com/

Publication in July 2016

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Annual Report 2016-2017 - Alpine

Annual Report 2016-2017 Annual Report 2016-2017 CONTENTS Top Message 4 Overview of Alpine Profile 6 Business Domains Value Chain  8 Business Re...

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