Pacific Report2016

Investors’ Guide

Contents

01 Profile

03 Review from President & CEO

05 Pacific Industrial’s Value Creation Model

07 Special Feature

09 Review of Operations

11 Management

14 R&D Activities

15 Performance Highlights

17 Consolidated Financial Statement (Summary)

Back Cover Company and Stock Information

Year ended March 31, 2016

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01 02Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

TPMS: Contributing to Automobile Safety, Security, and Global Warming Prevention

History

1930 PACIFIC INDUSTRIAL CO. (unlimited partnership) was founded to manufacture valve cores for automobiles.

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

1970Listed in the TOKYO and NAGOYA STOCK EXCHANGES, 1st Sections. Received TOYOTA SUPERIOR QUALITY CONTROL AWARD from Toyota Motor Corp.

1999Developed TPMS(Tire Pressure Monitoring System)transmitter.

We a re a comprehens i ve manufacturer of automotive p re s s e d r e s i n p ro d u c t s , including battery cases for hybrid cars, oil pans, wheel caps, and engine covers. With our market leading technology we promote manufacturing that contributes to the realization of a low-carbon society.

Valve core

1984 – Expanded the valve business overseas (Taiwan, South Korea, USA, Thailand)

1986 – Started stamping business in Thailand

1999 – Expanded Stamping and Molding business into the U.S., China, and Thailand

2012 – Expanded TPMS business into the U.S., Belgium, and China

TPMS transmitter

Global Operations

The Pacific Industrial Group is an automotive parts supplier which has 12 global Subsidiaries in six countries outside of Japan. The Group continues to pursue truly “glocal management” in harmony with local communities and the environment. We have two primary core businesses. The first is our tire valve products business, on which now holds the dominant share of the market. The other is our stamping and molding product business, which is highly-reputed as a specialized manufacturer with advanced processing techniques.

Profile

As a Global Manufacturer of Technology Components

VISION and MISSION

1 We will endeavor to develop and enhance technologies and to supply high quality products in response to the needs of customers.

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

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

The Group has captured 100 percent of the tire valve market in Japan, and over 20 percent of the market globally. We are proud of our ability t o p ro d u c e p ro d u c t s k n o w n throughout the world as being o f the h ighes t qua l i t y and technological capacity. We are the only manufacturer in Japan supplying, on an OEM basis, the next generat ion valve “TPMS” that has become compulsory by law in the United States, Europe, and South Korea.

Long Term Vision

PACIFIC GLOCAL VISION 2020

“Deepening” (Shinka) Strength to improve

“Evolution” (Shinka) Strength to innovate

“Developing” (Shinka) Strength to launch new technologies and businesses

“True worth” (Shinka) Strength to enhance corporate value

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

The business environment surrounding the Pacific Industrial Group has been changing dramatically and at an unexpectedly rapid pace. Examples of these changes include: the sudden global structural switch within the automobile industry, global environmental and energy problems, corporate social responsibility, globalization, and technological innovation. Recognizing these changes as a great opportunity, we have decided to make clear our dreams and mission by drawing up our long-term vision known as “PACIFIC GLOCAL VISION 2020”. This plan will serve as a milestone as we approach the 100th anniversary of our foundation in 2030.

This “long-term vision”, emphasizes CSR as a most vital management issue as well as ongoing innovation within our business structure. We will practice the “five meanings of ‘SHINKA’” as we shift to “Amalgamated Business Management” in pursuit of improved corporate value.

Five meanings of “SHINKA”

Deepening(Shinka)

Developing(Shinka)

Evolution(Shinka)

Strongertrust(Shinka)

True worth(Shinka)

The new PRIUS equipped with the Group’s wheel parts, battery case, etc.

We Continue to Pursue a Truly Glocal Management

“GLOCAL” is a combination of the words “global” and “local”.While working to mature and advance as a specialized manu fac tu re r i n t he “g loba l ” marke t , we a l so simultaneously strive to contribute to each “local” region’s development.

(GLOBAL)By promoting innovative research and development activities, manufacturing, and employee development, we aim to not only secure a dynamic competitive advantage which can be utilized throughout the world, but also aim to continuously mature as a company and further improve our corporate value.

(LOCAL)When expanding into new countries and regions, our company complies with all national and regional regulations and creates facilities which are kind to the environment. We respect local cultures and traditions, and contribute to regional development through generating jobs, hoping to become a business that is respected and loved by its surrounding community.

0

30,000

60,000

90,000

120,000

0

2,000

4,000

6,000

8,000

0

5,000

10,000

15,000

20,000106,886 7,86917,030

2014 2015 2016/32012 2013 2014 2015 2016/32012 2013 2014 2015 2016/32012 2013

EBITDANet sales Operating income

( ¥ million ) ( ¥ million ) ( ¥ million )

Investors’ Guide 2016 Editorial PolicyThe Pacific Industrial Group began publishing Investors’ Guide in 2013 to promote and enhance dialogue with more of our stakeholders with more of our stakeholders so as to build a sustainable society.

The 2016 edition, which is the fourth issue, is compiled to maximize readership among our stakeholders and is edited to integrate important financial and non-financial information, along with utilizing websites to comprehensively disclose information. We look forward to hearing your candid opinions about it.

Period covered in the Report:

From April 1, 2015 to March 31, 2016(includes the latest information at the time of publication)

Boundary of the Report:

Pacific Industrial Co., Ltd. and some Pacific Industrial Group companies

Publication Date: July 31, 2016

Publisher:Pacific Industrial Co., Ltd. Department of General Affairs Phone: +81-584-93-0113 Fax: +81-584-92-1804

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

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03 04Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

S t r i v i n g t o Impr o v e Managemen t Capability Focused on Personnel to Maximize the Ef fects of “Aggressive” Capital Investment.

Review from President & CEO

Shinya OgawaPresident and Chief Executive Officer

Our Group has nearly completed a series of large scale investment projects that we began in the previous fiscal year, and from the current fiscal year we have begun to ramp up production operations. In our stamping product business, we have promoted the establishment of a global production system for Ultra-High Tensile Strength Steel (UHTSS), a material which is becoming a mainstream source to reduce automobile weight, and the introduction of hot stamping to our core Japanese plants. In addition, we started operation of our subsidiary in Tennessee, for which construction had been underway as a second base of operation in the US, and in December 2015, we advanced with the preparation of producing high-precision stamping products in the US. In our plastic molding business in Thailand, the reinforcement of the business foundation is steadily progressing with the expansion of transactions with seven corporations including Japanese car manufacturers. In our valve products business, TPMS products continued to be a driving force in our profit growth due to strong sales growth in the US along with the effects of weaker yen and cost improvements. While mainta in ing f i rm the foundat ions of our domest ic development and production, our overseas bases, for which development and expansion were underway as part of our Group’s medium- to-long-term growth strategy, have started to contribute to profits.

Furthermore, the new PRIUS, which is the first model under the new design concept TNGA (Toyota New Global Architecture), has adopted 55 of our products including battery cases and wheel caps. In addition, accomplishments were made in the field of technological development as well, with our fuel cell vehicle relief valve installed in Toyota Motor’s fuel cell vehicle MIRAI receiving the “Cho” Monodzukuri I nnova t i v e Pa r t s and Componen t s Awa rd 2015 “Environmental Parts Award,” and two of the technologies employed in the Lexus RX receiving the Toyota Motor Corporation “Project Award.”

Since the start of 2016, amid continuing political and economic instability worldwide, our Group has continued to steadily push ahead with the achievement of goals set out in the Medium-Term Management Plan “OCEAN-18.” In recent years, we have cont inued with large-scale capita l

investments, but from now on, it is integral for us to tie these to revenue through steady operation of newly constructed plants and equipment. In order to do so, we will shift our focus to the development of human resources that are the source of sustainable competitive advantage.

Our utmost focus lies in the self-reliance of our overseas bases. While in the past Japanese staff were sent to overseas bases to supervise local staff, we plan to conduct education and training to nurture and appoint managerial staff from among local staff. By doing so, we aim to realize self-reliance of the bases and allow management to be completed locally. We will of course continue with the initiatives taken thus far to keep technology within our grasp and increase the number of clients, and also take measures with an eye to the legislation for TPMS, an area where growth is expected by far. We have already established a local production company for TPMS in Changshu, China, and started production from April 2016.

Our Group has succeeded in joining the ranks of 100 billion yen corporations. In order to achieve sustainable growth towards the 100th anniversary of our founding in 2030, we must enhance corporate quality and build a corporate structure befitting a 100 year, 100 billion yen corporation.

In doing so, we regard quality as the most important aspect amid the trend of parts standardization. Our Group has formulated manuals to counter product defects that occur during processing and design flaws, and has taken thorough measures accordingly. In addition, based on the concept of Jikotei Kanketsu (own-process completion) which keeps product defects that may occur in a worker’s process from being forwarded to subsequent processes, we are striving to improve product and work quality.

In addition, the Company also considers improving transparency and fairness of management as well as pursuing rapid decision-making to be important for the continuous improvement of corporate value. In June of last year, we added one outside director to our board, and established a “Corporate Auditor’s Office” in January 2016, as part of our efforts to enhance our corporate governance including business execution system as well as our supervision and audit system.

In 2015 we celebrated the milestone of the 85th anniversary of our founding. We took this opportunity to look back on the spirit of our founding and corporate policy as well as our history, and compiled “PACIFIC VALUES” as

universal values shared by the Pacific Industrial Group, centering on the efforts and ideas of our predecessors. I hope that we can share the spir its of “dreams and challenges” and “trust and gratitude” throughout the Group, and grow into a glocal company unswayed by the passage of time.

Amid a se r ious shor tage o f l abor, re ten t ion and empowerment of employees that form the basis of all corporate activities, as well as ensuring diversity of the workforce are the most important issues for achieving medium- to-long-term growth. We have begun creating a workplace environment to better accommodate diverse human resources, such as encouraging active participation of female employees, promoting child care and nursing care suppor t , and deve lop ing a workp lace that bef i ts handicapped employees. We are also conducting training by sending our employees to overseas bases and by holding training in Japan for staff from our overseas bases in an aim to cultivate glocal human resources. This will not only improve the knowledge and skills of all trainees, but also enable employees from overseas and in Japan to build human networks. In April 2015, we started a new personnel system with the aims of “training human resources that can make proposals and take action” and “fostering a corporate culture that enables employees to take on challenges,” striving to improve our employee’s motivation and to have them re-examine their awareness. In addition, as a glocal company rooted in local communities, we will continue to work proactively on activities to build bonds of trust with local communities such as next generation development businesses and environmental conservation activities.

These efforts are essential to our sustainable growth, and we believe that they can also lead to the Company’s increased competitive strength over the medium to long term, improved profitability and total assets turnover ratio. Although we expect the severity of the business environment will rise during the current fiscal year due to the sharp appreciation of the yen and other factors, we also hope to increase capital efficiency with a target of over 10% ROE. We will also distribute profits from our acquired cash with a target payout ratio of 30%, taking into account the level of funds to be accumulated for future growth.

We would like to ask for the continued guidance and support of our shareholders for the Pacific Industrial Group.

Progress of the Medium-Term Management Plan

Initiatives and Results of the Fiscal Year Ended March 31, 2016

Aiming for Sustainable Growth

Structural Reinforcement as a Glocal Company

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05 06Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

Pacific Industrial’s Value Creation Model

We are a global manufacturer of automotive parts which produces tire valve- related products that boast a significant share of the tire valve market, as well as stamped metal and plastic molding products with advanced technologies that make us capable of responding to modern consumer demands.

Risks

•Economic conditions in Japan and overseas

• Impact of natural disasters (e.g. earthquakes, flooding)

•Excessive dependence on specific business partners

•Cyberterrorism

Opportunities

•Stable growth in the automotive sector

•Growth of emerging markets

• Increasing legislation on compulsory installation of TPMS

•Structural shift of automobiles

•Product quality

•Global business development

• Exchange rate and interest rate fluctuations

•Price competition

•Raw material procurement

Market Environment

Strengths

• Large market share of Japanese and global valve business

•Advanced stamping techniques

•Integrated production systems

• Management trusted by our stakeholders through practice of CSR

Internal Environment

Issues

• Strengthening of business competitiveness and a shift in product mix towards more high-value-added products

•Passing on technologies and skills•Development of next-generation and global human resources• Development of environmentally friendly products, processes, and technologies

•Further expansion of overseas business•Deployment of equipment with high productivity

Building an extensive, multifaceted global structure Development that meets the needs for new tech-nologies and materials Proactively addressing medium-to-long-term risks

The Pacific Industrial Group

Medium-to-long-term high priority issues

• Financial capital

• Manufactured capital

• Intellectual capital

• Human capital

• Social and relationship capital

• Environmental capital

Desired Corporate Pictures in 2020

• An “indispensable corporate group for all stakeholders” with heightened corporate brand awareness

• A corporate group that has established open and fair corporate ethics and that fulfills its CSR

• A corporate group where each employee can pursue personal dreams and display his/her creativity and a spirit of challenge, and where he/ she can achieve self-realization and self-growth

• A corporate group that creates new values by “Manufacturing with Persistency” and that contributes to the development of local communities

• A corporate group that has pursued five meanings of “SHINKA”

Planning and design

Trial production and evaluation Procurement Production Delivery

CapitalInvested

Products Valve product business

We have established ourselves as the top manufacturer in Japan for tire valve products, on which we were founded, with the world’s highest quality and technological capacity. These products are manufactured and marketed globally, securing a large market share in not only Japan, but overseas markets as well. In addition to manufacturing control devices used for air conditioning and refrigerant control for systems such as car air conditioners, we also produce TPMS transmitters, developed as next-generation tire pressure valves, both in Japan and overseas. Modelling off of our proprietary technology which we have utilized since our foundation, we are pushing ahead with R&D to respond to customer needs.

OCEAN-18Medium-Term Management Plan SHINKAStrength to improve

Strength to innovate

Strength to launch new technologiesand businesses

Capability to enhance corporate value

Strength to win stakeholders’ confidence

Deepening

Evolution

Developing

True worth

Stronger trust

Keywords

Technology & Overseas Manufacturing is about Developing People CSR & Environmental Preservation

Long Term Vision PGV2020 Aiming to improve corporate value through amalgamated business management, we have positioned CSR as

management’s highest priority issue and reorganized our operational structure around the five meanings of “SHINKA.”

Stamping and Molding product business

We produce automotive parts which make up automobile main bodies, functional components such as hinges and battery cases, engine peripherals such as oil pans, and resin interior and exterior parts including engine covers and wheel caps, supplying Toyota Motor Corp. as our primary customer. As a specialized manufacturer with advanced processing techniques, we strive not only to develop smaller, lighter and low-cost products, but also to provide high-value-added products and services to meet customer needs.

Target of FY2018Consolidated sales 120billion yenConsolidated ordinary income rate Above8%

Oversea sales Above50%Total assets turnover ratio Above1.05times

<PACIFIC VALUES>

Founding Spirit

Company Motto

Our Shared Identity

2030

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ebra

ting

Our

Cen

tenn

ial

Ann

iver

sary

<Corporate Policies>

VISION and MISSION

Management Philosophy

Action Guidelines

Technology Development Guidelines

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07 08Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

Sp

ecia

l F

eatu

reProgress on the Medium-Term Management Plan interpreted through the five meanings of “SHINKA”

We are promoting our Medium-Term Management Plan “OCEAN-18,”

which ends in FY2018, as a specific action plan aimed at realizing the

Long Term Vision “PACIFIC GLOCAL VISION 2020.” Heading toward

achieving this plan, we will reorganize our operational structure through

the five meanings of “SHINKA,” and aim to improve our corporate value.

TPS ... Toyota Production System CSR ... Corporate Social Responsibility BCM ... Business Continuity Management

QUALITY & COST IMPROVEMENT

Enhance “Lean Production & Defect Free Process Completion” to achieve world standard quality Pursue highly efficient productivity by strengthening equipment maintenance and autonomation.

“Manufacturing renovation” through developing craftsmanship and cutting-edge technology

TECHNOLOGY INNOVATION

Create new technologies through material, design, and method renovation. Realize slim, compact, and flexible production lines

Develop environmentally-friendly next generation products and manufacturing methods

BUSINESS DEVELOPMENT

Plan new products and new market through marketing activities Construct new networks, global sales, purchasing, and production system Expansion of business through strategic M&A and alliance

BRAND ENRICHMENT

Increase property value by strengthening financial structure Minimize the burden we place on the environment and contribute toward creating sustainable society

Share our values and realize glocal management

RESPECT& RESPONSIBILITY

Achieve CSR and BCM goals throughout the entire group Implement safe, secure, and healthy workplaces

Foster the corporate culture of a spirit of challenge and promote personnel training

Deepening

Updating

Stronger Trust

Evolution

True Worth

Our Group has made efforts to formulate manuals in order to counter product defects

that occur during processing as well as design flaws, and has taken thorough measures accordingly. Also, based on J i ko te i Ka n ke t s u (ow n - p ro c e s s complet ion) which keeps product defects that may occur in a worker’s

p rocess f rom be ing fo r warded to subsequent processes, we are promoting

improvement activities aimed at improving product quality, work quality and productivity.

We are working to reduce the weight of products and develop environmentally fr iendly products and technology toward the realization of a low-carbon society.In recent years, we have developed relief valves for the hydrogen piping system in the fuel cell vehicle MIRAI as well as made lighter, simple-to-install TPMS transmitters that help improve fuel efficiency. In addition, we have also worked to develop processing technology of stamping parts using light, strong Ultra-High Tensile Strength Steel (UHTSS), and are implementing activities that contribute to reducing the environmental burden of each business.

In April 2016, Pacif ic Auto Parts Technology (Changshu) Co., Ltd. in China started production of TPMS

transmitters for China and Taiwan. In M a y o f t h e s a m e y e a r, P a c i f i c

Manufacturing Tennessee, Inc. in the US, which had already conducted production of

some stamping products, held its grand opening ceremony to start full-scale operations. In Japan, the Kurihara Plant, located in the Tohoku region, started full-scale operations at a newly constructed integrated stamping and welding plant, establishing the base for stamping business with a domestic tripolar system in the Chubu, Tohoku, and Kyushu regions.

Using the five basic principles of our Corporate Governance Code as pillars, we will comply with all our codes heading toward sustainable corporate value improvement. We will strive to make continuous improvements aimed at further improving corporate governance, such as by establishing a

whistleblower hotline independent from the management team, outside directors

holding regular liaison meetings, and introducing the exercising of voting rights on the Internet.

Since April 2015, we have introduced a new personnel system for the purposes of “training human resources that can make proposals and take action” and “fostering a corporate culture that enables employees to take on challenges,” striving to improve our employee’s motivation and to have them re-examine their awareness. We are focusing on the education of local staff at our overseas subsidiaries so as to promote “self-reliance”, and are further developing their skills to facilitate, autonomous and comprehensive local management.

Implementing improvement activities overseas

Development of stamping product processing technology

Stamping machine operation at our subsidiary in Tennessee, U.S.A.

Deepening(Shinka)

Evolution(Shinka)

Developing(Shinka)

True worth(Shinka)

Stronger trust

(Shinka)

Improving our products, business quality, and productivity with Jikotei Kanketsu (own-process completion)

Group work in in-house education

Development of environmentally friendly products and technology

Start of full-scale operations at new bases and plants

Full compliance with the 73 items of our Corporate Governance Code

Keywords

Technology & Overseas

Manufacturing is about Developing People

CSR & Environmental Preservation

Focusing on the development of successful human resources across the whole group

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09 10Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

Review of Operations

During the fiscal year under review, the Japanese economy

was on a moderate recovery trend due to the recovery of

corporate performance and improvement of the employment

situation against the backdrop of economic measures and

monetary policies by the Japanese government and the

Bank of Japan. Nevertheless, the outlook continues to be

unclear amid the decline in crude oil prices, the rapid appre-

ciation of yen and falling stock prices continuing from the be-

ginning of the year. Meanwhile, overseas, while the US econ-

omy has remained strong and the economy in Europe has

shown moderate recovery, the pace of economic growth in

China continued to slow down.

In the automotive-related industry, which is the Group’s

main area of business, auto production by our primary cus-

tomers exceeded the previous fiscal year in Japan, the US,

and China. In these circumstances, the Group promoted its

Medium-Term Management Plan “OCEAN-18,” and worked

on developing products, new technologies, and new meth-

ods that are eco-friendly, as well as cultivation of diverse hu-

man resources, and establishment of bases in Japan and

overseas, in an aim to become a “top-class glocal parts

manufacturer.”

As a result of the above efforts, on a consolidated basis in

FY2015, net sales were 106.886 billion yen (up 6.9% YOY),

while on the profit front, factors including an increase in

physical quantity sold, the effect of improvement in cost

price, and foreign exchange profits due to the weaker yen

led to operating income of 7.869 billion yen (up 13.0% YOY),

ordinary income of 9.013 billion yen (up 3.7% YOY), and net

income attributable to owners of the parent of 7.114 billion

yen (up 6.0% YOY).

Regarding the economic outlook henceforth, although the

Japanese economy is expected to continue to make a grad-

ual recovery due to economic stimulus measures through

government spending and ultra-low interest rate policies, in

addition to a recovery in consumer spending due to improve-

ment of the employment and income environment, there are

concerns that the adverse exchange and stock market con-

ditions continuing from the beginning of the year will have a

negative impact on consumption and investment. Overseas,

although the US is expected to stay on a recovery track, the

global economy overall is expected to remain uncertain with

the slowing growth rate of China, and the impact of falling

crude oil prices on oil producing countries.

In the automotive-related industry to which the Group be-

longs, although increased sales in overseas markets are ex-

pected, the possibility of major growth in the Japanese mar-

ket is little. Moreover, it is expected that the level of quality

required will continue to increase, and competition to devel-

op safe and environment-friendly products will spread glob-

ally.

Given these conditions, the outlook for our performance

in FY2016 is as follows: net sales of 103.0 billion yen (down

3.6% YOY), operating income of 7.2 billion yen (down 8.5%

YOY), ordinary income of 8.3 billion yen (down 7.9% YOY),

and net income attributable to owners of the parent of 6.0

billion yen (down 15.7% YOY). This performance outlook as-

sumes an exchange rate of 110 yen to the US dollar.

Japan North America Asia( ¥ million )

2014 2015 2016/32012 2013

55,796

27,35423,735

60,000

40,000

20,000

0 (1,000)

0

2,000

1,000

3,000

6,000

5,000

4,000

5,465

1,155840

Japan North America Asia( ¥ million )

2014 2015 2016/32012 2013

( % )

20

40

60 51.9

02014 2015 2016/32012 2013

Stamping and Molding operations

Auto production by our primary customers exceeded the previous period in

Japan, the US, and China. Affected partly by the impact of the exchange rate

due to the weaker yen, overall sales from these operations were 74.461 bil-

lion yen (up 8.6% YOY), greatly exceeding the previous period. Looking at

profits, due to an increase in physical quantity sold and an improvement in

cost price, operating income was 1.769 billion yen (up 12.4% YOY).

In addition to satisfactory sales figures of TPMS products, the impact of the

exchange rate due to the weaker yen served as a tailwind, and overall sales

from these operations totaled 32.032 billion yen (up 3.3% YOY). Concerning

profits, due to foreign exchange profits following the weaker yen and im-

provement in cost price, operating income was 6.114 billion yen (up 13.5%

YOY).

Stamping products Molding products

Valve operations

Tire Valve products TPMS products Control Devices products

( ¥ million )

( ¥ million )

0

30,000

15,000

45,000

60,000

75,000

0

2,400

1,800

1,200

600

3,000

74,4611,769

Operating incomeNet sales

2014 2015 2016/32012 2013

( ¥ million )

0

7,000

14,000

21,000

28,000

35,000

( ¥ million )

0

3,600

4,800

6,000

32,032Operating incomeNet sales

6,114

2,400

1,200

2014 2015 2016/32012 2013

69.6%

30.0%

Net sales by region Operating income by region Rate of oversea sales

Net sales and operating income

Net sales and operating income

Analysis of Financial Results for FY2015 Outlook for FY2016 Condition in FY2015 by Segment

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11 12Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

President & CEO * Shinya Ogawa

Executive Vice President * Takayuki Ishizuka

Senior Managing Officer * Katsuya Suzuki

Senior Managing Officer * Tetsushi Ogawa

Managing Officer * Hisashi Kayukawa

* Member of the Board(As of June 18, 2016)

Management

In order to ensure swift responses in the execution of busi-ness as well as strengthen the supervisory function over management, we have clearly separated the functions of management supervision and business execution by intro-ducing the operating officer system.

The institution of corporate auditors is set up to supervise management. A total of four auditors, including two from outside the company, work closely with the internal auditing department to supervise all business. To speed up decision making and clarify management roles/responsibilities an op-erations committee system has been introduced. Overall business management is determined by the shareholders’

CORPORATE GOVERNANCE

In step with our company’s deployment of global operations, we are working on enhancement and strengthening of risk management to minimize the increasingly diverse risks. We are preparing a business continuity plan (BCP) to cope with

Preparation of Risk Management System

In addition to attending the Board of Directors meetings and other important meetings, the auditors conduct audits of busi-ness affairs administration. This includes asking directors, company executives, each department, and subsidiaries about the condition of performance of duties and perusing important contracts and documents related to decisions. We have also established a Corporate Auditor’s Office as staff to assist the duties of auditors.

Furthermore, the auditors and the president hold regular meetings to exchange opinions concerning the current condi-tion of management and issues with which the company should deal and to deepen mutual understanding and trust.

Full-time corporate auditors attend the monthly manage-ment conferences composed of the directors, corporate au-ditors, and company executives, and at Board of Corporate Auditors meeting, the auditors conduct deliberation in advance on Board of Directors’ measures which were passed at the management conference. Furthermore, outside auditors have no connection with the company’s business dealings, etc.

The accountant auditors and the corporate auditors pres-ent their audit plans to each other at the beginning of the ac-counting periods and exchange opinions. At the end of the second quarter and at the end of the accounting year, the cor-porate auditors and accounting auditors promote cooperation

Internal Audit and Auditor’s Audit

The amount of executive compensation and the policy for determining the calculation method are prescribed by the company. The basic compensation is determined for each executive position based on the standards in Executive Compensation Regulations, within the scope of the annual compensation limits approved at the General Shareholders’ Meeting.

Moreover, we have introduced a performance-linked bo-nus system for executive bonuses. To boost directors’ (ex-cluding outside directors’) enthusiasm and motivation to im-prove operations, the method for calculating bonuses uses consolidated ordinary income ratio and consolidated return on equity as indices.

In June 2011, we discontinued the executive retirement bonus system for directors excluding outside directors, and instead, to further boost their enthusiasm and motivation to contribute to improvement of corporate performance and

Executive Compensation, Etc., and Policy for Determining the Calculation Method

Executive ClassificationTotal Amount ofCompensation,Etc.(million yen)

Total Amount of Compensation by Type (million yen) Total Number ofEligible ExecutivesBasic Compensation Stock Options Bonuses Retirement Bonus

Board Members(excluding outside board members)

305 194 42 69 0 7

Corporate Auditors(excluding outside auditors)

42 38 — — 4 2

Outside Directors 20 18 — — 1 4

Executive Compensation, Etc.

meeting, board of directors, board of auditors, and account-ing auditors. In addition, necessary management require-ments and strategies are reviewed and approved at the strategy and management meetings. The board of directors decides the basic direction of management and supervises the business operations. To make this institution most swift and effective, there are a total of 8 board members, each with an appointment term of 1 year. Since 2010, in order to include the viewpoint of a third party in decision making and to ensure transparency and objectivity in management, we have appointed four independent board members and two external board member.

various risks that can seriously affect business management so that we can make swift and appropriate initial responses and recovery responses to minimize damage, together with endeavoring to prevent damage before it occurs.

by sharing information, etc., together with holding a debriefing session where the accounting auditors present an explanation of the details of the accounting audit. Moreover, during the pe-riods, reports are received from the accounting auditors con-cerning auditing matters to be noted and issues facing the company, and they exchange opinions.

The CSR/Audit Office (4 personnel) checks the internal controls in each department, together with implementing inter-nal operations audits, points out problem points and gives ad-vice on improvements, and double checks internal control au-dits involving the Financial Instruments and Exchange Law. At the same time, the office is expanding the scope of internal audits to include other operations.

When corporate auditors perform auditing duties including investigation of the condition of corporate operations and corporate property, they maintain close cooperation with the internal audit departments, etc., and hold regular meetings to exchange information so that auditing is implemented effi-ciently.

Of the outside auditors, one has specialized knowledge and abundant auditing experience as a certified public accountant, and one has specialized knowledge on corporate legal affairs and abundant international experience as a lawyer.

corporate value on a medium- to long-term basis, we intro-duced stock options as rewards which are separate from directors’ other compensation and which allot share acqui-sition rights as stock options up to an annual amount of 50 million yen. Moreover, the retirement bonuses due for the time employed up to the discontinuance of the retirement bonus system are paid when directors retire.

Executive retirement bonuses for external directors and auditors are prescribed in Executive Retirement Bonus Reg-ulations, and estimated payments are calculated based on job position and years of employment, etc. When payment is made, approval is received at the General Shareholders Meeting, and the amount is decided by the Board of Direc-tors for outside directors and by consultation among the corporate auditors for corporate auditors.

Corporate Directors, Auditors and Officers

Outside Board Member * Hiroshi Kurokawa

Outside Board Member * Osamu MotojimaAudit & SupervisoryBoard Member Hiroshi NagataAudit & SupervisoryBoard Member Yasuhiko FujiiAudit & SupervisoryBoard Member Katsuhiro TakahashiAudit & SupervisoryBoard Member Ayao Sakakibara

Board Members and Auditors

Board Members and Auditors

Managing Officer Takayuki Shirata

Managing Officer Terumi Noda

Operating Officer Yoshio Mori

Operating Officer Harunori Asano

Operating Officer Kazuya Hayashi

Operating Officer Masataka Kurita

Corporate Officers

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13 14Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

Management

The Pacific Industrial Group believes that CSR is the keystone of management for honorable business operations that can be trusted and counted on by society. Through our activities in all regions and countries, we aim to become a “True Glocal Enter-prise” that positively contributes to the continuous development of society. To preserve harmony between the economy, environ-ment, and society, we place great importance on open and fair communication as well as creating a win-win relationship with all of our stakeholders.

Corporate Social Responsibility (CSR) Management

Work TeamsCommittees

Supervision and promotion agency of overall CSR activities

Risk Management Committee

CSR Council

CSR Promotion Organization CSR Philosophy

Amid many risks and dangers, we try to earn the trust and expecta-tions of our stakeholders as a true global compa-ny. To this purpose, we have establ ished the core elements of com-pliance, risk manage-ment, and corporate governance within all of our business activities.

Technology

Safety

QualityHuman

resources

Cost Regionalcontribution

Environment

Energysaving

Compliance

Internal control

Corporategovernance

Riskmanagement

Informationdisclosure

Stockholder

Glocal (C

omm

unity)

Employee

Par

tner

Customer

Environmentpreservation

Stakeholder Management

In order to obtain trust and meet e x p e c t a t i o n s o f o u r stockholders, we will place i m p o r t a n c e o n t w o w a y communication and continuously strive to improve our corporate value by taking a long-term view.

Stockholders

CSRPolicy

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

Customers

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

Employees

Aiming at co-existence and coprosperity based on mutual t rus t , we w i l l respect our business partners and establish strong positive relationships with them on an equitable and fair basis.

Business Partners

We wil l strengthen the development of env i ronmenta l ly f r iendly products and technology and promote manufacturing that takes env ironmenta l conservat ion and reduction of burdens on the environment into account throughout the entire process.

Glocalization (Communities)

Environment

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

Society

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

Social Contribution

R&D Activities

In order to refine our unique and proprietary technologies, which we have cultivated since our foundation, and to respond to the needs of customers and to social issues that should be addressed by the automobile industry, we will speedily work towards the development of new technologies, new method-ologies, and new materials through a structure that incorpo-rates industry, government and academia, such as specialized manufacturers, universities, and research institutes.

For stamping products, weight reduction that leads to improved fuel efficiency has become one of the important issues. In recent years, there has been a dramatic spread of Ultra-High Tensile Strength Steel (UHTSS) that allows for weight reduction while maintaining the same safety as be-fore. Because UHTSS is hard, advanced stamping, molding and die technologies are required in its processing. We con-ducted further research in response to this, and as a result made possible the processing of UHTSS through cold stamping technology and the hot stamping process. We are introducing processing equipment for UHTSS to production bases in Japan and overseas in steps, and developing a global production system while promoting further explora-tion of these technologies going forward.

In the valve products business, valve core products that we founded have achieved cumulative production of over 15.5 billion units. The TPMS (Tire Pressure Monitoring Sys-tem) transmitter developed as the next-generation valve has achieved cumulative production of 0.1 billion units. In recent years, in order to meet the needs for simple-to-install TPMS transmitters, we developed the Snap-In TPMS by reducing

its weight and changing materials. We are also conducting new product development that applies our valve technology cultivated over many years, exemplified by the relief valve we developed being adopted for use in the hydrogen piping system of the Toyota Motor’s fuel cell vehicle MIRAI.

In addition, we are working to develop technologies for realizing new design concepts aimed for by various automo-bile manufacturers, including Toyota Motor’s TNGA (Toyota New Global Architecture). TNGA’s first model, the new PRI-US, has adopted 55 of our products including battery cases and wheel caps.

Going forward, we will continue to conduct development closely focused on customers, engage in research with an eye to the future, and develop products that pursue environ-mental performance, safety and comfort.

Topics

Two technologies developed by the Group received awards from Toyota Motor

0

400

200

600

800

1,000(%)

0

0.4

0.2

0.6

0.8

1.0

R&D expenses/Ratio of R&D expenses to net sales

943

0.88

943

2014 2015 2016/32012 2013

( ¥ million )

R&D expenses Ratio of R&D expensesto net sales

Selectable color trim wheels

General Environmental Policies

Initiatives taken regarding R&D activities Management

Development of environmentally friendly new technologies and manufacturing methods Immediate target More than 25 developments in 2016

Reduction of CO2 Emissions Immediate target Reduction of CO2 emissions by 9% in 2016 compared to 2007 Total amount of emissions less than 23,970t CO2 emission rate for sales: less than 39.3t/million yen

Reduction of Industrial Waste (excluding recyclable materials) Immediate target Maintain within 325t in 2016

Reduction of VOC Emissions Immediate target Reduction of VOC emissions by 14% in 2016 compared to 2015 (Goal 125.9t)

We shall actively partake in protection of the global environment, and strive to bea “credible high quality company” that is respected by society

EnvironmentalPhilosophy

Env

ironm

enta

l P

olic

ies

Cor

pora

te

Env

ironm

enta

lA

ctiv

ities

We shall achieve 4 environmental goals through business activities; from development, production, physical distribution, and scrap to recycling.

We shall always observe the laws, regulations, local ordinances, industrial guidelines and voluntary control standards.

We shall inform all company employees as well as all external partners of this environmental policy, and promote employee awareness-raising through stratified education and various events.

1. Development of a burrless FSW (friction stir welding) method using proprietary development tools

We realized cost reduction through reduction of material processing time of stamping products and burrless processing by using new tools jointly developed with UACJ Corporation for FSW methods.

2. Development of selectable color trim wheelsWe worked on joint development with CHUO PRECISION INDUSTRIAL CO., LTD., to adorn a part of aluminum wheels with plastic parts, realizing color schemes and weight reduction that were not previously possible.We also reduced the number of steps in assembly with a one-touch installation structure.

In order to improve automobile safety, environmental friendliness, and comfort, as well as to meet the needs of our customers and society, we are actively working on the creation of new product value not only through our in-house technology development, but also through joint development with other companies.

Two of the technologies we developed received awards at the Toyota Motor “New Lexus RX Project Awards” held in November 2015.

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15 16Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

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

( ¥ million ) ( ¥ million )

( ¥ million )

( % )

0

60,000

30,000

90,000( ¥ million )

0

20

40

60( % )

0

3,000

6,000

9,000

0

4,000

8,000

12,000

16,000

0

50,000

100,000

150,000

0

2.0

4.0

6.0

8.0

10.0

Depreciation ExpensesCapital ExpendituresRatio of ordinary profit to sales

Total assets Net assets Equity ratio

8,003

55.7

11,9888.4

129,954

1,339.62

6.80.81 9.7

132.42 26.0

( Times )

2014 2015 2016/32012 2013 2014 2015 2016/32012 2013

2014 2015 2016/32012 2013 2014 2015 2016/32012 2013

2014 2015 2016/32012 2013 2014 2015 2016/32012 2013

2014 2015 2016/32012 20132014 2015 2016/32012 2013

2014 2015 2016/32012 2013

2014 2015 2016/32012 2013

2014 2015 2016/32012 2013

2014 2015 2016/32012 2013

0

0.25

0.50

0.75

1.00

Total assets turnover ratio

0

2.0

4.0

6.0

8.0( % )

ROA/Return on assets

0

3.0

6.0

9.0

12.0( % )

ROE/Return on equity

( ¥ )

0

10.0

20.0

30.0

Cash dividends per share

73,244

( ¥ )

0

50

100

150

EPS

( ¥ )

0

500

1,000

1,500

BPS

2011 2012 2013 2014 2015 2016/3 2016/3

Net sales *1 ¥84,631 ¥79,579 ¥83,700 ¥91,976 ¥99,952 ¥106,886 889.536

Operating income *1 5,151 3,699 4,340 5,500 6,962 7,869 65,493

Ratio of operating profit to sales (%) 6.1 4.6 5.2 6.0 6.9 7.4 —

Ordinary income *1 5,281 4,147 5,372 7,062 8,691 9,013 75,014

Ratio of ordinary profit to sales (%) 6.2 5.2 6.4 7.7 8.7 8.4 —

Net income for the year attributable to owners of the parent 2,969 3,297 2,807 4,587 6,714 7,114 59,206

Ratio of net income to sales (%) 3.5 4.1 3.4 5.0 6.7 6.7 —

EBITDA *2 13,862 12,042 11,520 14,205 13,657 17,030 141,732

Capital expenditures *1 5,065 6,855 7,820 11,168 15,390 11,988 106,392

Depreciation expenses *1 8,930 7,117 6,564 6,996 6,637 8,003 66,610

R&D expenses *1 735 603 647 735 905 943 7,855

For the year Millions of yen Thousands ofU.S. dollars

2011 2012 2013 2014 2015 2016/3 2016/3

Total assets ¥81,934 ¥90,540 ¥96,976 ¥116,562 ¥133,694 ¥129,954 1,153,304

Net assets 39,126 42,396 50,969 60,648 75,459 73,244 650,018

Equity ratio (%) 44.6 44.1 49.6 49.5 55.5 55.7 —

At year end Millions of yen Thousands ofU.S. dollars

2011 2012 2013 2014 2015 2016/3 2016/3

Cash flows from operating activities ¥12,695 ¥7,041 ¥9,934 ¥10,689 ¥11,130 ¥15,211 134,998

Cash flows from investing activities (5,121) (6,997) (7,405) (10,749) (15,370) (12,754) (113,194)

Cash flows from financing activities (9,624) 3,050 (3,195) 5,515 (1,812) (236) (2,101)

Free Cash flow 7,574 44 2,529 (60) (4,240) 2,456 21,804

Cash flows Millions of yen Thousands ofU.S. dollars

2011 2012 2013 2014 2015 2016/3 2016/3

Net assets (BPS) ¥684.01 ¥748.15 ¥900.89 ¥1,079.42 ¥1385.19 ¥1,339.62 11.88

Net income (EPS) 55.54 61.68 52.57 85.80 125.47 132.42 1.17

Cash dividends 10.00 10.00 11.00 16.00 24.00 26.00 0.23

Per share data yen dollars

2011 2012 2013 2014 2015 2016/3

Total assets turnover ratio (%) 0.97 0.92 0.89 0.86 0.80 0.81

ROA/Return on assets (%) *2 6.0 4.8 5.7 6.6 6.9 6.8

ROE/Return on equity (%) *2 8.2 8.6 6.4 8.7 10.2 9.7

Major operating ratio

2011 2012 2013 2014 2015 2016/3

CO2 emissions (kt) *3 24 24 26 26 27 27

Waste generation (t) *3 376 361 339 429 335 315

VOC emissions (t) *3 250 165 175 156 151 147

Number of people taking childcare leave *3 8 10 9 10 8 12

Frequency rate of employees leavingdue to industrial accident *3 0 0 0.53 0.51 0.51 0.25

Number of employees 3,125 2,944 3,128 3,264 3,418 3,446Notes:*1 U.S. dollar amounts presented are calculated at the exchange rate as of March 31, 2016 with Japanese yen amounts to U.S. dollar amounts at ¥112.68 to US$1.00. However, for those with a *1 mark, the amounts are

calculated at the average rate during the fiscal year of Japanese yen amounts to U.S. dollar amounts at ¥120.16 to US$1.00.*2 Calculation formulas for each indices EBITDA = Net income before income tax, etc. + Interest expenses + Depreciation expenses ROA = Ordinary income / (Total assets at the end of previous fiscal year + Total assets at the end of current fiscal year) / 2 ROE = Net income of current fiscal year / (Equity at the end of previous fiscal year + Equity at the end of current fiscal year) / 2*3 The emission rate figures of CO2, waste products, VOC, number of people taking childcare leave, and frequency rate of employees leaving due to industrial accident only represent those of domestic locations (excluding affiliates).

ESG data

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17 18Pacific Industrial Co.,Ltd. PACIFIC REPORT 2016

Consolidated Financial Statement (Summary)

2015/3 2016/3 2016/3

(Assets)

Current Assets

Cash and time deposits 13,811 15,164 134,584

Trade notes and accounts receivable 15,104 15,507 137,621

Merchandise and finished goods 3,147 2,818 25,011

Work in process 2,084 1,894 16,809

Raw materials and supplies 2,025 1,905 16,908

Deferred tax assets 1,041 880 7,815

Other accounts receivable 1,874 2,009 17,838

Other current assets 324 516 4,583

Allowance for doubtful accounts (31) (25) (228)

Total current assets 39,382 40,670 360,941

Fixed Assets

Property, Plant and Equipment

Buildings and structures 16,667 18,510 164,278

Machinery and vehicles 21,398 22,269 197,639

Tools, Furniture, and fixtures 4,329 4,744 42,102

Land 5,680 5,392 47,861

Lease Asset 486 449 3,991

Construction in progress 8,053 6,697 59,443

Total Property, Plant and Equipment 56,615 58,065 515,313

Intangible Fixed Assets 1,002 1,001 8,892

Investments and Other Assets

Investments in securities 30,735 24,924 221,200

Long-term loans 128 116 1,031

Deferred tax assets 184 191 1,695

Net defined benefit asset 4,895 4,055 35,989

Other fixed assets 761 938 8,327

Allowance for doubtful accounts (12) (9) (83)

Total Investments and Other Assets 36,694 30,216 268,159

Fixed Assets 94,312 89,283 792,363

Total Assets 133,694 129,954 1,153,304

Millions of yen Thousands ofU.S. dollars

2015/3 2016/3 2016/3

(Liabilities)

Current Liabilities

Trade notes and accounts payable 6,553 6,313 56,026

Electronically recorded obligations - operating 6,281 6,208 55,097

Short-term borrowings 3,698 3,480 30,884

Current portion of long-term borrowings 2,990 4,826 42,834

Other accounts payable 4,154 3,633 32,245

Accrued expenses 1,233 983 8,725

Income taxes payable 951 910 8,084

Consumption taxes payable 165 303 2,696

Allowance for bonuses 1,487 1,366 12,127

Allowance for bonuses to directors 73 69 615

Notes concerning installations 37 54 481

Other current liabilities 1,185 1,955 17,355

Total Current Liabilities 28,813 30,104 267,169

Noncurrent Liabilities

Convertible bond 6,000 5,635 50,009

Long-term borrowings 13,237 13,428 119,173

Deferred tax liabilities 8,661 6,223 55,236

Provision for directors retirement benefit 233 248 2,204

Net defined benefit liabilities 201 135 1,202

Guarantee deposits 133 — —

Other noncurrent liabilities 954 934 8,294

Total Noncurrent Liabilities 29,422 26,605 236,117

Total Liabilities 58,235 56,710 503,286

(Net assets)

Shareholders' Equity

Capital stock 4,320 4,502 39,962

Capital surplus 4,597 4,800 42,605

Retained earnings 43,878 49,632 440,475

Treasury stock at cost (318) (294) (2,612)

Valuation and Translation Adjustment 52,478 58,642 520,431

Valuation and Translation Adjustment

Valuation difference on available securities 14,786 10,551 93,641

Foreign currency translation adjustments 5,693 2,861 25,395

Remeasurement of defined benefit plan 1,183 303 2,692

Total Valuation and Translation Adjustment 21,663 13,716 121,727

Subscription rights to shares 168 190 1,690

Minority Interests 1,148 695 6,170

Total Net Assets 75,459 73,244 650,018

Total Liabilities and Net Assets 133,694 129,954 1,153,304

2015/3 2016/3 2016/3

Net Sales 99,952 106,886 889,536

Cost of Sales 85,129 90,911 756,587

Gross Profit 14,822 15,975 132,949

Selling, General and Administrative Expenses 7,860 8,105 67,456

Operating Income 6,962 7,869 65,494

Non-Operating Income

Interest income 34 59 496

Dividend income 489 608 5,063

Equity in earnings of affiliated companies 577 796 6,625

Foreign exchange gain 601 — —

Other Non-operating income 302 335 2,788

Non-Operating Income 2,005 1,798 14,971

Non-Operating Expenses

Interest expense 196 166 1,389

Foreign exchange loss — 480 4,001

Other Non-operating expense 80 7 60

Non-Operating Expenses 276 654 5,451

Ordinary Income 8,691 9,013 75,014

Gains on sale of fixed assets

Extraordinary Income 0 11 98

Gains on sale of shares of subsidiaries and associates — 44 366

Gains on sale of fixed assets 0 55 464

Extraordinary Losses

Losses on sales and retirements of fixed assets 62 144 1,206

Losses on valuation of investment securities 143 — —

Impairment loss 1,663 64 540

Extraordinary Losses 1,868 209 1,746

Income Before Income Taxes and Minority Interests 6,823 8,859 73,732

Income Taxes-current 2,098 1,364 11,353

Income Taxes-deferred (141) 378 3,149

Income Taxes 1,956 1,742 14,502

Income before minority interests 4,866 7,117 59,230

Minority Interests in Income (Loss) (1,847) 2 23

Net Income 6,714 7,114 59,207

Millions of yen Thousands ofU.S. dollars

Consolidated Statements of IncomeConsolidated Balance Sheets

2015/3 2016/3 2016/3

Income before minority interests 4,866 7,117 59,230

Other comprehensive income

Unrealized gains on available-for-sale securities 4,968 (4,023) (35,709)

Foreign currency translation adjustments 4,239 (2,843) (25,232)

Remeasurements of defined benefit plans 1,099 (879) (7,809)

Share of other comprehensive income of associates accounted for using the equity method 150 (271) (2,411)

Total other comprehensive income 10,458 (8,018) (71,161)

Comprehensive income 15,325 (901) (11,931)

Comprehensive income attributable to:

Owners of the parent 17,080 (833) (11,363)

Minority interests (1,755) (68) (567)

Consolidated Statements of Comprehensive Income

Millions of yen Thousands ofU.S. dollars

Millions of yen Thousands ofU.S. dollars

010_0365197222807.indd 17-18 2016/08/09 18:32:34

Department of General Affairs

100 Kyutoku-Cho, Ogaki City, Gifu Prefecture, 503- 8603 Japan

Phone: +81-584-93-0113 Fax: +81-584-92-1804

E-mail: ir-7250@pacific-ind.co.jp

www.pacific-ind.co.jp

’11/06 ’12/01 ’13/01 ’14/01 ’15/01 ’16/01 ’16/05

8,000

24,000

18,000

12,000

6,000

0

2,000

0

4,000

6,000

1,600

800

0

1,200

400

(yen) (yen)

(thousand shares)Trading Volume

Nikkei 225Paci�c ind.

Company Profile

Name: Head Office location:

Established:Capital stock: Number of employees:Businesses:

Operations in Japan:

Pacific Industrial Co., Ltd.100 Kyutoku-Cho, Ogaki City, Gifu Prefecture, 503-8603 JapanTEL 0584−91−1111 (main switchboard)August 8, 19304,320 million yen1,660 (consolidated: 3,450)Manufacturing and sales of automotive parts, electric appliance components,electronic devices and other productsEight plants in Japan

JAPAN Taiheiyo Sangyo Co., Ltd.

PI System Co., Ltd.

Pacific Development Co., Ltd.

Taiyo Kosan Co., Ltd.

PEC Holdings Corporation

U.S.A. Pacific Industries USA Inc.

Pacific Manufacturing Ohio, Inc.

Pacific Manufacturing Tennessee, Inc.

Taiwan Pacific Valve (Taiwan) Co., Ltd.

South Korea Pacific Valve Industrial Co., Ltd.

Pacific Air Controls Co., Ltd.

Thailand Pacific Industries (Thailand) Co., Ltd.

China Pacific Industries China Corporation

Tianjin Pacific Auto Parts Co., Ltd.

Changsha Pacific Hanya Auto Parts Co., Ltd.

Pacific Auto Parts Technology (Changshu) Co., Ltd.

Belgium Pacific Industries Europe NV/SA

Group Companies

State of Shares

Number of shares the Company is authorized to issue

90,000,000

Number of shares already issued 55,051,262

Number of shareholders 4,008

Principal Shareholders (top 10)

Shareholder name Number of shares held (thousands of shares)

Shareholding ratio (%)

Japan Trustee Services Bank, Ltd. (Trust Account)

3,206 5.89

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2,679 4.92

Ogaki Kyoritsu Bank, Ltd. 2,671 4.90

The Juroku Bank, Ltd. 2,619 4.81

Nippon Life Insurance Company 2,359 4.33

The Dai-ichi Mutual Life Insurance Company 2,349 4.31

PEC Holdings Corporation 1,987 3.65

Giken K. K. 1,891 3.47

Client stock ownership of Pacific Industrial Co., Ltd.

1,814 3.33

Employee stock ownership of Pacific Industrial Co.,Ltd.

1,433 2.63

(Note) The shareholding ratio, excluding treasury stock (588,157 shares), is rounded to two decimal places.

Securities companies0.5%

Financial institutions41.3%

Other Japanese corporations13.5%

Treasury stock1.1%

Individuals and others

25.9%

Foreign corporations

17.7%

Distribution of Shares

Stock Price

010_0365197222807.indd 1 2016/08/08 18:24:28