ANNUAL REPORT

2021

For the ﬁscal year ended March 31, 2021

To Our Shareholders and Investors

SMK Philosophy

CONTENTS
To Our Shareholders and Investors

SMK is committed to the advancement of mankind
through development of the information society, byintegrating its current technological strengths andcreating advanced technology.

Financial Highlights

We are obliged to you for your continued support andgood patronage.
On this occasion, we would like to express our
deepest sympathy to everyone who has been
affected by COVID-19.
We would like to report on the outline and resultsof the SMK Group’s business for the 99th fiscal year
(from April 1, 2020 to March 31, 2021).
We look forward to your continuing support andencouragement.

2

Overview of Consolidated Results by Division

4

Financial Section

5

Financial Review

6

Consolidated Balance Sheet

8

Consolidated Statement of Income

8

Consolidated Statement of Comprehensive Income

1 Contribute to society with pride and confidence.

9

Consolidated Statement of Changes in Net Assets

10Consolidated Statement of Cash Flows

2 Be customer-oriented, with zeal and sincerity.

11

Notes to Consolidated Financial Statements

27

Report of Independent Auditors

29

Officer Introduction

June 2021

SMK Action Guidelines

3 Challenge courageously for higher goals without

fear of failure.

4 Trust and respect each other for a brighter working

atmosphere.

Corporate Information

5 Keep an open mind, and view SMK from a global

Yasumitsu Ikeda

perspective.

President and CEO/COO

Financial Highlights
Percent Change
2020/2021

Millions of yen
Years ended and as of March 31

Thousands of
U.S. dollars

2021

2020

Years ended and as of March 31

2021

Operating Results¥ 54,161¥ 48,560

(244)

1,070

ー

9,665

Basic

(2,651)

1,917

ー

17,316

DilutedOperating income (loss)
Profit (loss) attributable to owners of parent(10.3)%$ 438,623

Financial Position
Total assets
Total net assets

Net sales¥ 50,204¥ 50,332

24,62927,751Millions of yen

75,0000.3%$ 454,629
250,664

12.7

Profit (loss) attributable toowners of parent

Operating income (loss)

Millions of yen

Millions of yen

54,161
48,560

1,500

1,070
630

1,500

Total assets / Total net assets
Total assets

62,318(244)

58,71340,000(288)

50,33231,31830,63728,612

24,62927,751

ー

ー

40.00

50.00

25.0

0.45

60
297.92151.65

40.00

100

40

(43.63)(100)(126.47)

20
10.00

(400)

2018

2019

2020

2021

(3,000)

2017

2018

2019

2020

2021

(3,000)(2,651)
2017

2018

2019

2020

2021

0

50.00

50.00

(300)

(1,834)2017

Cash dividends per share
yen

yen

(200)

20,000(1,500)

ー

0

(834)
(1,500)$2.69

ー%Basic profit (loss) attributable toowners of parent per share

200

50,20425,000ー

300

61,47460,0000¥ 297.92

400

485

0

Total net assets

80,0001,017¥(410.88)

Note 1. The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥110.71 = U.S. $1.00.
2. The Company carried out a consolidation of share at the ratio of 10 shares to 1 share on October 1, 2018.
Basic earnings per share and diluted earnings per share have been calculated on the assumption that the said consolidation of share wascarried out at the beginning of the year ended March 31, 2017.
3. The Company and its consolidated subsidiaries have adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, February 16, 2018) (hereinafter, the “Partial Amendments”) from the beginning of the fiscal year ended March
31, 2019. As such, financial position for the year ended March 31, 2018 is calculated on the assumption that“Partial Amendments” isapplied retrospectively.
4. In the calculation of profit (loss) per share, the Company’s shares remaining in the Board Benefit Trust (BBT), which are recorded astreasury stock under shareholders’ equity, are included in the treasury stocks that are deducted in the calculation of the average numberof shares in the period.

1,917

50,00002021

Profit (loss) attributable to owners of parent

Millions of yen

3,000

3,000

57,3862021

2020

Cash dividends

59,786

U.S. dollars

Per Share Data

Net sales

62,971

Percent Change
2020/2021

Yen

2017

2018

2019

2020

2021

(500)

8.00

(410.88)
2017

2018

2019

2020

2021

0

2017

2018

2019

2020

2021

ANNUAL REPORT 2021 1

Overview of Consolidated Results by Division(April 1, 2020 to March 31, 2021)

The many different electronic components that SMK produces are widelyused by electronics manufacturers in and outside Japan. The markets forthese components can be broadly classified into four markets: ICT Market,
Home Appliance Market, Car Electronics Market and Industry Market.
Two divisions, namely CS (Connection System) Division and SCI(Sensing, Communications and Interface) Division, as well as Research &Development Center, are responsible for developing products that
continually meet market requirements in the wide range of markets
outlined above. The two divisions handle operations ranging from productplanning and design to mass production, whereas Research & Development
Center is primarily in charge of designing and developing products in new
fields.
In this section, we present an overview of our results achieved in eachof the two divisions and Research & Development Center in the fiscal year
under review.

CS(Connection System)
Division
Major Products
Connectors (Coaxial, FPC)Jacks

In the ICT market, sales of connectors increased year on year due to increased
demand from customers in the U.S. for use in tablet devices as a result of the
expansion of remote work and online classes, as well as strong sales ofconnectors for smartphones made to customers in China. In the home appliancemarket, sales of new connectors for game consoles and TVs grew steadily andexceeded those of the previous year. In the car electronics market, sales
remained sluggish until the second quarter, largely affected by the slump ofautomotive sales due to the spread of the COVID-19 pandemic, but orders
recovered in the third quarter, mainly in China and the U.S., and remained at thesame level as that of the previous fiscal year.
As a result, net sales of CS Division amounted to ¥19,840 million (6.3%
increase year on year), and operating income was ¥1,444 million (924.3%
increase year on year).

Net sales / Operating income

Millions of yen

25,00020,0002,000

19,84018,670

1,444

1,600

15,000

1,200

10,000

800

5,000

400
141

0

2020

0

2021

Sales by Division
Research &Development
CenterOthers¥ 36 Million

0.1%¥ 252 Million

0.5%

Net sales¥ 48,560

40.9%

MillionSCI
Division¥ 28,431 Million

CS
Division¥ 19,840 Million

SCI (Sensing,Communications andInterface) Division
Major Products
Remote Control Units
Switches
Camera Modules
Touch Sensors

58.5%

In the home appliance market, sales of remote control units for sanitary andhome equipment increased year on year, but sales of remote control units for air
conditioners decreased in the first quarter due to the impact of temporary
shutdowns and lower capacity utilization rates at factories in Southeast Asia, andsales of remote control units for set-top boxes decreased in the fourth quarter. As
a result, sales in the home appliance market as a whole decreased from theprevious year. In the car electronics market, although orders for camera modules,
units and touch sensors began to recover in the third quarter, the cumulative
total for the period under review fell below that of the previous year due to theglobal slump in automotive sales. In the ICT market, sales of switches for
smartphones made to customers in the U.S. decreased and fell below those of
the previous year.
As a result, net sales of SCI Division amounted to ¥28,431 million (19.1%
decrease year on year), and operating loss was ¥72 million (compared tooperating income of ¥10 million in the previous fiscal year).

Net sales / Operating income (loss)
40,000Millions of yen
4,000

35,13728,431

20,000

2,000

10

0

Others: businesses of other electronic parts, lease, real-estate rental, andworker dispatching undertakings.

0

(72)

2020

(2,000)2021

Sales by Market
Industry / Others¥ 3,906 Million

8.0%
21.9%

Car
Electronics¥ 14,819 Million

ICT¥ 10,635 Million

Major Products
Wireless Modules

Net sales

30.6%

Research &Development
CenterSales of Bluetooth® modules, which are the central product among wirelesscommunication modules, the mainstay business of the Research & Development
Center, fell below those of the previous year due to a decrease in sales for mobile
printers, despite an increase in sales for payment terminals.
As a result, net sales of Research & Development Center amounted to ¥252
million (10.0% decrease year on year), and operating loss was ¥277 million(compared to an operating loss of ¥279 million in the previous fiscal year).

Net sales / Operating loss

500

500

281

252

¥ 48,560
Million

0

39.5%

Home
Appliance¥ 19,199 Million

0

(279)

(277)

Others: markets of medical equipment, rehabilitation equipment, etc.
2020

2 ANNUAL REPORT 2021

Millions of yen

2021

(500)

ANNUAL REPORT 2021 3

Financial Section

Financial Review

SMK’s net sales for the fiscal year ended March
31, 2021 decreased 10.3% year on year to¥48,560 million (US$438,623 thousand),Five-Year Summary(US$9,665 thousand) and profit attributable toThousands of
U.S. dollars

2017

2018

2019

2020

2021

2021

62,971 ¥

59,786 ¥57,386 ¥54,161 ¥48,560$ 438,623

Operating income (loss)

630

485

(1,834)

(244)

1,070

9,665

Profit (loss) attributable toowners of parent

1,017

(288)

(834)

(2,651)

1,917

17,316

Operating Results¥

Financial Position
Total assets
Total net assets¥

Millions of yen
32,00031,31862,318 ¥61,474 ¥58,713 ¥50,204 ¥50,332$ 454,629

31,31830,63728,612

24,62927,751

250,664

Yen

30,00028,612

U.S. dollars(US$17,316 thousand) were recorded.

28,000Net Sales

26,000In the ICT market, although sales expanded due to increased
customer demand as a result of the expansion of remote workand online classes, sales in the home appliance, car electronics,
industry and other markets decreased due to restrictions on
operations at factories in Southeast Asia amid the spread of
COVID-19 in the first quarter and the global slump in automotive
sales.
As a result, net sales were ¥48,560 million (US$438,623
thousand), down 10.3% year on year.

0

Profit attributable to owners of parent
Profit attributable to owners of parent was ¥1,917 million(US$17,316 thousand) as a result of recording rent income/expense, foreign exchange gains, subsidies for employment
adjustment, etc. in other income/expenses.

¥ 4,734.95 ¥ 4,635.03 ¥ 4,415.09 ¥ 3,870.65 ¥ 4,311.91

$

38.95

Profit (loss) attributableto owners of parent
Basic

151.65(43.63)(126.47)(410.88)297.92

2.69

Diluted151.62

－

－

－

－

－

10.00

8.00

50.00

40.00

50.00

0.45

Cash dividends

Note 1. The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥110.71 = U.S. $1.00.
2. The Company carried out a consolidation of share at the ratio of 10 shares to 1 share on October 1, 2018.
Basic earnings per share and diluted earnings per share have been calculated on the assumption that the said consolidation of share wascarried out at the beginning of the years ended March 31, 2017.
3. The Company and its consolidated subsidiaries have adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, February 16, 2018) (hereinafter, the “Partial Amendments”) from the beginning of the fiscal year ended March
31, 2019. As such, financial position for the years ended March 31, 2018 is calculated on the assumption that“Partial Amendments” isapplied retrospectively.
4. In the calculation of profit (loss) per share, the Company’s shares remaining in the Board Benefit Trust (BBT), which are recorded astreasury stock under shareholders’ equity, are included in the treasury stocks that are deducted in the calculation of the average numberof shares in the period.
4 ANNUAL REPORT 2021

Total Net Assets / ROE

2019

2020

%

2021

7.3
8

4
3.2
(0.9)

0

(2.8)

(4)

(8)

(12)

(9.9)

2017

2018

2019

2020

2021

Return on assets (ROA)(Years ended March 31)%

Total Assets / ROA

4

6

5.2

2.2
2
0.6

Cash FlowsNet cash provided by operating activities amounted to ¥4,653
million (US$42,029 thousand), net cash used in investing activities
totaled ¥2,325 million (US$21,001 thousand), and net cash used infinancing activities was ¥3,904 million (US$35,263 thousand).

2018(Years ended March 31)

As of March 31, 2021, total net assets were ¥27,751 million(US$250,664 thousand), with ROE of 7.3 %.

As of March 31, 2021, total assets were ¥50,332 million(US$454,629 thousand), with ROA of 5.2%.

2017

Return on equity (ROE)

Operating Income
As the cost of sales ratio improved year on year due to our efforts
such as proactive launch of new products and initiatives taken to
reduce costs, operating income amounted to ¥1,070 million(US$9,665 thousand).

27,751

24,629Per Share Data
Total net assets

30,637owners of parent of ¥1,917 million

Millions of yen

Net sales(As of March 31)

and operating income of ¥1,070 million

SMK Corporation and Consolidated Subsidiaries

Years ended andas of March 31

Total net assets

(0.3)

0
(1.2)

(2)

2017

2018

2019

2020

2021

ANNUAL REPORT 2021 5

Consolidated Balance Sheets

Consolidated Balance SheetSMK Corporation and Consolidated Subsidiaries
As of March 31, 2020 and 2021

Thousands of
U.S. dollars(Note 2)Millions of Yen

Assets2020

2021

Liabilities and net assets

2021

2020

2021

2021

¥

¥

6,122

$ 55,298

5,101

5,029

45,425

Accrued income taxes

283

330

2,981

Accrued bonuses

576

716

6,467

Accrued directors' and officers' bonuses

0

28

253

Accounts payable, non-trade (Note 15)

1,468

1,775

16,033

Other current liabilities (Note 17)

1,529

1,495

13,504

18,59815,498

139,987

Long-term debt (Note 5 and 15)

5,513

5,180

46,789Deferred tax liabilities (Note 12)

491

954

8,617

Accrued directors' and officers' retirement benefits

134

147

1,328

Liability for retirement benefits (Note 6)

62

61

551

Accrued directors' and officers' share awards

—

14

126

774

723

6,531

6,976

7,082

63,969

7,996

7,996

72,225

Capital surplus

12,057

12,057

108,906

Retained earnings

11,582

13,241

119,601

Treasury stock(4,391)(4,394)(39,689)

27,24528,900261,042Net unrealized gains (losses) on other securities

106

288

2,601

Net unrealized gains (losses) from hedging instruments

(18)

(7)

(63)

(2,295)(1,997)(18,038)

(122)

568

5,131

(2,329)(1,149)(10,378)

(286)

—

—

24,62927,751

250,664¥ 50,204¥ 50,332$ 454,629

Current liabilities

Current assets
Cash and cash equivalents (Note 15)

Thousands of
U.S. dollars(Note 2)Millions of Yen¥

Time deposits (Note 15)

10,437

¥

8,742

$

78,963

77

57

515

Notes and accounts receivable, trade (Note 15)

10,89911,242

101,545

Electronically recorded monetary claims (Note 15)

1,432

1,325

11,968Inventories (Note 3)

6,426

6,547

59,136

Other current assets (Note 17 and 20)

1,162

1,050

9,484

Allowance for doubtful accounts

(104)

(61)

(551)

30,332

28,903

261,069

Short-term loans payable (Note 5 and 15)
Notes and accounts payable, trade (Note 15)

9,639Long-term liabilities
Investments and long-term loans
Investment securities (Note 15 and 16)

2,493

3,113

28,119Long-term loans receivable (Note 20)

50

90

813

Asset for retirement benefits (Note 6)

1,114

2,058

18,589Other investments (Note 20)

641

661

5,971

Allowance for doubtful accounts

(39)

(84)

(759)

4,259

5,839

52,741
Net assets

Property, plant and equipment （Note 5, 11 and 18)
Land (Note 4)

5,977

5,939

53,645

Buildings

19,032

19,386

175,106

Machinery and vehicles

22,762

23,108208,725

Tooling and office furniture

19,082

19,489176,036

Leased assets

30

32

289

Right of use assets

127

135

1,219

Construction in progress

221

128

1,156

67,234

68,220616,204(51,842)(52,816)(477,066)

15,392

15,403

139,129

Deferred tax assets (Note 12)

100

92

831

Intangible assets (Note 11)

120

93

840

220

185

1,671

50,332$ 454,629

Less-accumulated depreciation
Other assets

Total assets

Other long-term liabilities¥

50,204¥

Shareholders’ equity (Note 7)
Common stock
Authorized : 19,596,127 shares
Issued : 7,500,000 shares

Accumulated other comprehensive income

Foreign currency translation adjustments
Retirement benefits asset and liability adjustments
Non-controlling interests

Total liabilities and net assets

See accompanying notes to consolidated financial statements.
6 ANNUAL REPORT 2021

ANNUAL REPORT 2021 7

Consolidated Statement of Income

Consolidated Statement of Changes in Net Assets

Years ended March 31, 2020 and 2021

Years ended March 31, 2020 and 2021

SMK Corporation and Consolidated Subsidiaries

SMK Corporation and Consolidated Subsidiaries

Net sales (Note 19)
Cost of sales (Note 3 and 8)
Selling, general and administrative expenses (Note 8 and 9)
Operating Profit (loss) (Note 19)

¥

2020

54,161
46,437
7,968
(244)

¥

Millions of yen

Thousands of
U.S. dollars(Note 2)Millions of Yen

2021

Shareholders’ equity

2021

48,56040,1197,370
1,070$ 438,623
362,379
66,570
9,665

Other income
Interest and dividend income (Note 20)
Rent income
Foreign exchange gains
Subsidies for employment adjustment
Gain on sales of fixed assets (Note 10)
Gain on sales of golf memberships
Other
Total other income

105
1,050
—
—
90
23
407
1,676

71
1,066
160
542
21

641
9,629
1,445
4,896
190

525
2,387

4,742
21,561Other expenses
Interest expense
Rent expense (Note 20)
Foreign exchange losses
Compensation expenses
Loss on sales of fixed assets (Note 10)
Loss on disposal of fixed assets (Note 10)
Loss on impairment of fixed assets (Note 11)
Loss on valuation of investment securities
Loss on liquidation of subsidiaries and affiliates
Other
Total other expenses

109
559
692
—
36
72
2,953
23
—
148
4,596

108
567
—
87
0
79
130
112
22
76
1,186

976
5,121
—
786
0
714
1,174
1,012
199
686
10,713(3,165)

2,271

20,513

228
(292)
(163)
(2,937)(286)(2,651)

297
—
93
1,881
(35)
1,917

2,683
—
840
16,990(316)
17,316

Profit (loss) before income taxes
Income taxes (Note 12)
Current
RefundDeferredProfit (loss)
Loss attributable to non-controlling interests
Profit (loss) attributable to owners of parent

¥

—

¥

Yen

Per share data (Note 14)
Total net assets
Profit (loss) attributable to owners of parent
Basic
DilutedCash dividends¥ 3,870.65¥ 4,311.91(410.88)—40.00

297.92
—
50.00

—

$

$

2.69
—
0.45

SMK Corporation and Consolidated Subsidiaries

Profit (loss)
Other comprehensive income (Note 13)
Net unrealized gains (losses) on other securities
Net unrealized gains (losses) from hedging instruments
Foreign currency translation adjustments
Retirement benefits asset and liability adjustments
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of parent
Non-controlling interests

¥

2020

(2,937)¥

Thousands of
U.S. dollars(Note 2)

2021

1,881

¥

(191)
(10)
(268)
(132)
(603)
(3,541)

¥

181
10
297
690
1,180
3,061

¥
¥

(3,254)
(286)

¥
¥

3,097
(35)

CapitalsurplusRetainedearnings

2021$

16,990

$

1,635
90
2,683
6,232
10,65827,649$$27,974(316)

Total
Net unrealized Net unrealized
Foreign Retirement accumulated
otherTotal gains (losses) gains (losses)
currency benefits asset
Treasury shareholders'on other from hedging translation and liability comprehensive
incomestock
equitysecurities instruments adjustments adjustments

7,500,000 ¥ 7,996 ¥ 12,057 ¥ 14,597 ¥ (4,313) ¥ 30,338 ¥
(326)
(326)
(2,651)(2,651)
(128)
(128)
(37)
49
12
37

—
7,500,000
7,500,000

—
7,996
7,996

—
12,057
12,057(37)(3,014)
11,582
11,582
(259)

297 ¥

(7) ¥ (2,027) ¥(78)(4,391)(4,391)(3)

Noncontrollinginterests

10 ¥ (1,726) ¥
—
—
—
—

—

1,917

Total net
assets— ¥ 28,612(326)(2,651)
(128)
12

—

—

—

(191)

(10)

(268)

(132)

(603)

(286)

(889)

(3,093)27,24527,245
(259)

(191)
106
106

(10)
(18)
(18)

(268)
(2,295)(2,295)

(132)
(122)
(122)

(603)
(2,329)(2,329)

(286)
(286)
(286)

(3,982)
24,62924,629
(259)

1,917

1,917

(3)
—

(3)
—

—

—

—
—
—
—
1,658
(3)
1,655
7,500,000 ¥ 7,996 ¥ 12,057 ¥ 13,241 ¥ (4,394) ¥ 28,900 ¥

181

10

297

181
288 ¥

10
297
(7) ¥ (1,997) ¥

690

1,180

690
1,180
568 ¥ (1,149) ¥

286

1,466

286
—

3,122
¥27,751

Noncontrollinginterests

Total net
assetsThousands of U.S. dollars (Note 2)

Shareholders’ equity

38.95

Consolidated Statement of Comprehensive Income
Millions of Yen

Balance at April 1, 2019
Cash dividends paid
Loss attributable to owners of parent
Acquisition of treasury stock
Disposition of treasury stock
Transfer to Capital surplus
from retained earnings
Net changes in items otherthan shareholders' equity
Total changes
Balance at March 31, 2020
Balance at April 1, 2020
Cash dividends paid
Profit attributable toowners of parent
Acquisition of treasury stock
Disposition of treasury stock
Transfer to Capital surplus
from retained earnings
Net changes in items otherthan shareholders' equity
Total changes
Balance at March 31, 2021

Commonstock

U.S. dollars(Note 2)

See accompanying notes to consolidated financial statements.

Years ended March 31, 2020 and 2021

Number ofshares ofcommonstock

Accumulated other comprehensive income

Commonstock

Balance at April 1, 2020
Cash dividends paid
Profit attributable toowners of parent
Acquisition of treasury stock
Disposition of treasury stock
Transfer to Capital surplus
from retained earnings
Net changes in items otherthan shareholders' equity
Total changes
Balance at March 31, 2021

CapitalsurplusRetainedearnings

Accumulated other comprehensive income
Total
Net unrealized Net unrealized
Foreign Retirement accumulated
otherTotal gains (losses) gains (losses)
currency benefits asset
Treasury shareholders'on other from hedging translation and liability comprehensivestock
incomeequitysecurities instruments adjustments adjustments$ 72,225 $108,906 $104,616 $ (39,662) $246,093 $(2,339)(2,339)17,316(27)957 $ (163) $ (20,730) $ (1,102) $ (21,037) $ (2,583) $222,464—(2,339)17,316—

17,316

(27)
—

—
—

(27)
—

—

—

—

—

1,635

—
—
14,976(27) 14,949
1,635$ 72,225 $108,906 $119,601 $ (39,689) $261,042 $ 2,601 $

90

2,683

6,232

10,6582,583

13,242

90
2,683
6,232
10,6582,583
28,200(63) $ (18,038) $ 5,131 $ (10,378) $— $250,664

See accompanying notes to consolidated financial statements.
8 ANNUAL REPORT 2021

ANNUAL REPORT 2021 9

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements
SMK Corporation and Consolidated Subsidiaries

SMK Corporation and Consolidated Subsidiaries
Years ended March 31, 2020 and 2021

Thousands of
U.S. dollars(Note 2)Millions of Yen

Cash flows from operating activities
Profit (loss) before income taxes
Depreciation and amortization
Loss on impairment of fixed assets
Increase (decrease) in accrued bonuses
Increase (decrease) in accrued directors’ and officers' retirement benefits
Increase (decrease) in accrued directors' and officers' share awards
Increase (decrease) in asset and liability for retirement benefits
Interest and dividend income
Interest expense(Gain) loss on sales of fixed assets(Gain) loss on valuation of investment securities(Gain) loss on sales of golf memberships
Loss on disposal of fixed assets
Loss on liquidation of subsidiaries and affiliates(Increase) decrease in notes and accounts receivable, trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable, trade(Increase) decrease in accounts receivable, non-trade
Increase (decrease) in accounts payable, non-trade
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from time deposits
Purchases of fixed assets
Proceeds from sales of fixed assets
Purchases of intangible fixed assets
Proceeds from sale of intangible fixed assets
Purchases of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Payments for execution of loans
Collection of loans receivable
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term debt
Payments of long-term debt
Purchases of treasury stock
Proceeds from sales of treasury stock
Dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Decrease in cash and cash equivalents resulting
from exclusion of subsidiaries from consolidation
Cash and cash equivalents at end of the year
10 ANNUAL REPORT 2021

2020

2021

2021

¥ (3,165)
3,292
2,953
(44)
(41)
—
(62)
(105)
109
(53)
23
(23)
72
—
1,622
1,394
533
109
271
(80)
6,806
106
(102)
(464)
6,345

¥

$

2,271
2,237
130
134
13
14
30
(71)
108
(20)
112
—
79
22
367
103
(838)
7
340
(141)
4,903
77
(114)
(212)
4,653

20,513
20,206
1,174
1,210
117
126
271
(641)
976
(181)
1,012
—
714
199
3,315
930
(7,569)63
3,071(1,274)44,287696(1,030)(1,915)42,029(228)
258(2,637)
250
(40)
0
(159)
—
29
(30)
32
(2,525)(75)
98(2,334)
52
(26)
—
(63)
0
—
(9)
31
(2,325)(677)
885(21,082)
470
(235)
—
(569)
0
—
(81)
280
(21,001)(5,692)4,000(2,015)
(127)
12
(325)
(29)
(4,176)17(338)
10,776(1,950)1,400(3,055)
(1)
—
(259)
(37)
(3,904)(94)(1,671)
10,437(17,614)
12,646(27,595)(9)—(2,339)(334)(35,263)(849)(15,093)
94,273

—

(24)

(217)

¥ 10,437

¥

8,742

$

78,963Note 1. Summary of significant accounting policies( a ) Basis of presenting financial statements
The accompanying consolidated financial statements of SMK Corporation (the “Company”) and consolidated subsidiaries
are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as tothe application and disclosure requirements of International Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as required by the Financial Instruments and Exchange Act ofJapan. For the purpose of this document, certain reclassifications have been made in the accompanying consolidated
financial statements to facilitate understanding by readers outside Japan. In addition, certain reclassifications have been
made to the prior year’s consolidated financial statements to conform to the current year’s presentation.
( b ) Basis of consolidation and investments in affiliated companies
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries over which
substantial control is exercised either through majority ownership of voting stock and/or by other means.
All significant intercompany balances and transactions have been eliminated in consolidation.
Certain foreign subsidiaries’ fiscal period ends on December 31, which differs from the year-end date of the Company;
however, the financial statements of these companies were tentatively closed as of March 31 and necessary adjustments
for consolidation were made.
Investments in affiliates (companies over which the Company has the ability to exercise significant influence) are accounted
for by the equity method. Consolidated profit attributable to owners of parent includes the Company’s equity in the current
profit attributable to owners of parent or loss of such companies, after the elimination of unrealized intercompany profits.
All assets and liabilities of the Company’s subsidiaries are revalued at the acquisition, if applicable, and the excess of costover the underlying net assets at the date of acquisition is amortized over a period of five years on a straight-line basis if
such excess is material, or charged to income when incurred if immaterial.
( c ) Scope of consolidation
Number of consolidated subsidiaries: 25
SMK-LOGOMOTION filed a petition for bankruptcy during the year ended March 31, 2021, which was excluded from scopeof consolidation. SMK Eletronica Brasil Ltda and SMK-LINK Electronics Corporation were liquidated during the year ended
March 31, 2021, which were excluded from the scope of consolidation, respectively.
( d ) Application of equity method of accounting
Number of affiliated companies accounted for using the equity method: 1( e ) Translation of foreign currencies
Receivables and payables denominated in foreign currencies are translated into yen at the appropriate closing rate at theend of the reporting period, and differences arising from the translation are included in the consolidated statement ofincome.
All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at the appropriate
closing rate at the end of the reporting period. Revenue and expense accounts are translated at the average rates of
exchange prevailing during the year. Differences arising from the translation are presented as foreign currency translation
adjustments in the consolidated financial statements.
( f ) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in banks which can be withdrawn at any time and short-term
investments with a maturity of three months or less when purchased which can easily be converted to cash and are
subject to little risk of change in value.
( g ) Inventories
Inventories are mainly stated at the lower of cost or market. The following inventories are measured principally by theirrespective methods:
Finished products: Retail cost method
Work in process: Actual raw material cost, determined by the most recent purchase cost method, plus direct labor costs
and manufacturing overheads
Raw materials and supplies: Most recent purchase cost method
Consolidated subsidiaries adopt mainly the moving average method.
( h ) Securities
Marketable securities classified as other securities are carried at fair value with any changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets. Non-marketable securities classified as othersecurities are carried at cost. Cost of securities sold is determined by the moving average method.
( i ) Derivatives
Derivatives are stated at fair value.
( j ) Property, plant and equipment and depreciation (except for leased assets, Right of use assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is calculated principally by
the declining-balance method for the Company and its domestic subsidiaries, and by the straight-line method mainly forforeign subsidiaries. Certain buildings of the Company and its domestic subsidiaries acquired on or after April 1, 1998 andfacilities attached to buildings and other non-building structures acquired on or after April 1, 2016 are depreciated by thestraight-line method.
The estimated useful lives of the assets are as follows:
Buildings:
10 to 50 years
Machinery and vehicles:
4 to 10 years
Tooling and office furniture:
2 to 6 years
The residual values of the property, plant and equipment acquired on or before March 31, 2007 are depreciated equally
over a period of 5 years starting from the year following the year in which they have been depreciated up to theirdepreciable limit or 5% of the acquisition cost.
ANNUAL REPORT 2021 11

( k ) Intangible assets (except for leased assets)
Amortization of intangible assets is calculated by the straight-line method. Software for own use is amortized based on theutilizable period (5 years).
Goodwill is amortized by the straight-line method mainly over 5 years.
( l ) Leased assets
Noncancellable lease transaction that transfer substantially all risks and rewards associated with the ownership of assets
are accounted for as finance leases. Depreciation of leased assets is calculated by the straight-line method based on thelease life as the useful life and the residual value is zero.
(m ) Right of use assets
Depreciation of right of use assets is calculated by the straight-line method based on the lease term as the useful life andthe residual value is zero.
( n ) Allowance for doubtful accounts
The allowance for doubtful accounts is provided based on past experience for normal receivables and on an estimate of thecollectability of receivables from companies in financial difficulty.
( o ) Accrued bonus
Accrued bonuses are provided on the estimate of the amounts to be paid in the future by the Company, domestic
consolidated subsidiaries and certain overseas subsidiaries based on an accrual basis at the balance sheet date.
( p ) Accrued directors’ and officers’ bonuses
Accrued directors’ and officers’ bonuses are provided on the estimate of the amounts to be paid subsequent to the balance
sheet date.
( q ) Accrued directors’ and officers’ retirement benefits
Accrued directors’ and officers’ retirement benefits have been provided at an amount equal to 100% of the amount which
would be required to be paid based on the Company’s bylaws if all directors and officers resigned from the Company on
the balance sheet date.
( r ) Accrued board benefit trust
Accrued board benefit trust have been provided at an amount equal to 100% of the amount which would be required to be
paid based on the Company’s bylaws if all directors and officers exercised board benefit trust on the balance sheet date.
( s ) Retirement benefits
Asset and liability for retirement benefits for employees are recorded mainly at the amount calculated based on theretirement benefit obligation and the fair value of the pension plan assets as of balance sheet date.
The retirement benefit obligation for employees is attributed to each period by the benefit formula method over theestimated years of service of the eligible employees. Actuarial gain or loss is amortized in the year following the year inwhich the gain or loss is recognized primarily by the straight-line method over a period of 5 years, which is within theestimated average remaining years of service of employees.
( t ) Hedge accounting(1) Method of hedge accounting
Deferral hedge accounting is applied for interest rate swap transactions.
The exceptional treatment is applied for interest rate swap transactions meeting certain conditions.
(2) Hedging instruments and hedged items
Hedging instruments: interest rate swaps
Hedged items: long-term debt subject to interest rate fluctuation risk.
(3 ) Hedging policy
The Company uses interest rate swaps to hedge risks from interest rate fluctuations on borrowings, only whenapproved by the management.
(4) Assessment of effectiveness of hedging activities
The Company evaluates the hedge effectiveness by comparing accumulated fluctuations of the hedging instrument andhedged item every quarter.
When the exceptional treatment is applied for interest rate swaps, the assessment of hedge effectiveness is omitted.
( u ) Income taxes
Deferred income taxes are recognized based on the differences between financial reporting and the tax bases of the assets
and liabilities and are calculated using the enacted tax rates and laws which will be in effect when the differences are
expected to reverse.
( v ) Per share information
Basic net income per share is computed based on the net income available for distribution to shareholders of common
stock and weighted-average number of shares of common stock outstanding during the year. Diluted profit attributable toowners of parent per share is computed based on the profit attributable to owners of parent available for distribution toshareholders and average number of shares of common stock outstanding during each year after giving effect to thedilutive potential of shares of common stock to be issued upon the conversion of convertible bonds.
Net assets per share is computed based on the net assets available for distribution to shareholders of common stock andthe number of shares of common stock outstanding at the balance sheet date. Cash dividends per share shown for eachperiod in the consolidated statement of income represent the dividends applicable to the respective period.
( w ) Consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Nondeductible
consumption taxes are expensed in the consolidated financial statements.
( x ) Consolidated taxation system
The Company and its consolidated subsidiaries apply consolidated taxation system.
( y ) Adoption of tax effect accounting for the transition from the consolidated taxation system to the group tax sharing system
For items that have transitioned to the group tax sharing system and those for which the non-consolidated tax payment
system have been reviewed in line with the transition to the group tax sharing system, established under the ” Act for
Partial Revision of the Income Tax Act and Other Acts” (Act No. 8 of 2020), the Company adopts the treatment set forth inParagraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated
Taxation System to the Group Tax Sharing System” (ASBJ Practical Issues Task Force No. 39, March 31, 2020) not to apply
provisions of Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, February
16, 2018). The amounts of deferred tax assets and deferred tax liabilities are, therefore, based on provisions of the tax
code prior to the revision.
12 ANNUAL REPORT 2021

( z ) Significant accounting estimates
1. Impairment of fixed assets(1) Amount recorded in the consolidated financial statements for the year ended March 31, 2021
Property, plant and equipment: ¥15,403 million ($139,129 thousand) (of which, SMK Electronics (Phils.) Corporation:¥383 million ($3,459 thousand))Impairment loss: ¥130 million ($1,174 thousand) (of which, SMK Electronics (Phils.) Corporation: ¥― million($― thousand))(2) Other information that facilitates users’ understanding of financial statements( i ) Calculation method
Assets or asset groups that have an indication of impairment are tested for impairment, and when it isdetermined that an impairment loss should be recognized, the book value is reduced to the recoverable amountand an impairment loss is recorded. The recoverable amount is measured at value in use or net realizable value.
Value in use is calculated by discounting future net cash flows estimated based on the future business plan tothe present value.
( ii ) Key assumptions
The key assumptions used in estimating future cash flows are forecasts of sales volume and sales prices, which
serve the basis of the business plan. The forecast of sales volume is calculated based on the estimated futureorder documents prepared by the customers. The impact of COVID-19 has been calculated assuming a main
scenario in which vaccination will expand and the disease will gradually subside.
(iii) Effect on the consolidated financial statements for the next fiscal year ending March 31, 2022
The estimation of projected sales volume, which is one of the key assumptions, is highly uncertain. If the
projected sales volume decreases significantly in the future due to the timing as to when the COVID-19
pandemic will subside and the impact that the pandemic will have on the economic environment, or due tochanges in the market trend, impairment losses may be incurred in the year ending March 31, 2022.
2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the year ended March 31, 2021
Deferred tax assets, net: ¥92 million ($831 thousand)Note: The amount before offsetting with deferred tax liabilities is ¥392 million ($3,541 thousand).
(2) Other information that facilitates users’ understanding of financial statements( i ) Calculation method
The recoverability of deferred tax assets for deductible temporary differences and operating loss carryforwards
for tax purposes is determined by estimating taxable income based on future profitability. Estimates of taxable
income derived from future profitability are based on future business plans.
( ii ) Key assumptions
The key assumptions used in estimating taxable income are forecasts of sales volume and sales prices, which
serve the basis of the business plan. The forecast of sales volume is calculated based on the estimated futureorder documents prepared by the customers. The impact of COVID-19 has been calculated assuming a main
scenario in which vaccination will expand and the disease will gradually subside.
(iii) Effect on the consolidated financial statements for the next fiscal year ending March 31, 2022
The estimation of projected sales volume, which is one of the key assumptions, is highly uncertain. If the
projected sales volume decreases significantly in the future due to the timing as to when the COVID-19
pandemic will subside and the impact that the pandemic will have on the economic environment, or due tochanges in the market trend, changes in estimates of taxable income may result in the reversal of deferred tax
assets.
(aa) Accounting standards issued but not yet effective
Accounting Standards and Implementation Guidance on Revenue Recognition
The Accounting Standards Board of Japan (ASBJ) issued “Accounting Standard for Revenue Recognition” (ASBJ Statement
No.29, March 31, 2020) and “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance
No.30, March 26, 2021).
(1 ) Overview
This is a comprehensive accounting standard for revenue recognition. Specifically, the accounting standard establishes
the following five-step model that will apply to revenue from customers:
1. Identify the contract(s) with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognize revenue when(or as) the entity satisfies a performance obligation(2) Schedule date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the beginning of the fiscal
year ending March 31, 2022.
(3) Impact of the adoption of accounting standard and implementation guidance
The Company is currently evaluating the effect of the adoption of this accounting standard and implementation
guidance on its consolidated financial statements.
Accounting Standard for Fair Value Measurement and Related Implementation Guidance
The Accounting Standards Board of Japan (ASBJ) issued “Accounting Standard for Fair Value Measurement” (ASBJ
Statement No. 30), and “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No.31), along with related updates to “Accounting Standard for Financial Instruments” (ASBJ Statement No.10), and“Implementation Guidance on Disclosures about Fair Value of Financial Instruments.” (ASBJ Guidance No. 19).

ANNUAL REPORT 2021 13

(1 ) Overview
The ASBJ has developed an “Accounting Standard for Fair Value Measurement” and “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (hereinafter collectively, the “Fair Value Measurement Standard” ),which provide guidance for fair value measurement in order to improve comparability with internationally recognizedaccounting standards. The Fair Value Measurement Standard is applied with respect to the fair value of the following items;• Financial instruments defined in “Accounting Standard for Financial Instruments”“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” has been revised requiring
disclosure of financial instruments broken down by level in the fair value hierarchy.
(2) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance from the beginning of the
fiscal year ending March 31, 2022.
(3) Impact of adoption of revised accounting standard and related implementation guidance
The Company is currently evaluating the effect of the adoption of the accounting standards and related implementation
guidance on its consolidated financial statements.
(ab) Change in presentation(Changes due to the application of Accounting Standard for Disclosure of Accounting Estimates)
The company adopted “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.31, March 31, 2020)and disclosed “Significant accounting estimates” for the year ended March 31, 2021.
The company omitted the note for the year ended March 31, 2020 according to the transitional treatment set forth inParagraph 11 of the above accounting standard.
(Consolidated Balance Sheet)
Electronically recorded monetary claims previously presented as “notes and accounts receivable, trade” in current assets havebeen reclassified to “electronically recorded monetary claims” for the year ended March 31, 2021 because of its increased
quantitative materiality.
As a result, ¥12,332 million ($111,390 thousand) of “notes and accounts receivable, trade” in current assets previously
presented in consolidated balance sheet for the year ended March 31, 2020 have been reclassified to ¥1,432 million ($12,934
thousand) of “electronically recorded monetary claims” and ¥10,899 million ($98,446 thousand) of “notes and accounts
receivable, trade” in consolidated balance sheet as of March 31, 2021.
(ac) Additional information
Introduction of Board Benefit TrustWe introduced a new share-based compensation plan, a “Board Benefit Trust (BBT)” (the “Plan” ) for directors (including
executive officer, excluding outside directors; “Directors” ) based on the resolution at the 96th General Meeting of
Shareholders on June 22, 2018 for the purpose of raising awareness of contributing to the improvement of medium- tolong-term business results.
Regarding the accounting treatment for the plan, the gross method is adopted based on the “Practical Solution on Transactionsof Delivering the Company’ s Own Stock to Employees, etc. through Trusts” (ASBJ Practical Issue Task Force No.30, March 26,2015).
(1) Outline of the Plan
The Plan is a share-based compensation plan under which our shares are acquired through a trust (the trust established inaccordance with the Plan, the “Trust”) by using the funds contributed by the Company. Directors will receive theCompany’s shares through the Trust in accordance with the officer stock benefit rules prescribed by the Company. In
principle, Directors will receive benefits, such as the Company’s shares, on their retirement.
(2) The Company’s shares remaining in the Trust
The Company’s shares remaining in the Board Benefit Trust (BBT) are recorded by the Company as treasury stock under
net assets at their book value in the BBT (excluding the amount of ancillary expenses). As of March 31, 2021, the bookvalue of the said treasury stock was ¥160 million ($1,445 thousand), and the number of shares was 43,800.

Note 4. Reduction entries
Reduction entries due to acceptance of prefectural government’s grants relating to property, plant and equipment as of March 31,
2020 and 2021 were as follows:
Land

¥

2020

Millions of yen

101

¥

2021

101

Thousands of U.S. dollars
2021

$

912

Note 5. Short-term loans payable and long-term debt
Short-term loans payable and long-term debt as of March 31, 2020 and 2021 consisted of the following:
Millions of yen
Short-term loans payable
Average interest rate on short-term loans payable, principally from banks, is 0.48%
SecuredUnsecured
Total

2020

¥
¥

Long-term debt
Average interest rate on long-term debt, principally from banks, is 1.01%
SecuredUnsecured
Less: portion due within one year
Total

2,000
4,551
6,551
2020

¥
¥

2021

¥
¥
Millions of yen

3,223
5,378
(3,088)
5,513

900
3,554
4,454

Thousands of U.S. dollars
2021

$

8,129
32,102$ 40,231

2021

Thousands of U.S. dollars
2021

2,832
4,016
(1,667)¥ 5,180$ 25,580
36,275(15,057)$ 46,789¥

The assets pledged as collateral for short-term and long-term debt as of March 31, 2020 and 2021 were summarized as follows:
Millions of yen(1) Factory foundation
Buildings
Machinery and vehicles
Tooling and office furniture
Land
Total
(2) Other
Buildings
Tooling and office furniture
Land
Total

Thousands of U.S. dollars

2020

¥

¥
¥
¥

2021

1,107
60
110
256
1,535

¥

228
1
39
269

¥

¥

¥

2021

1,066
51
90
256
1,465

$

9,629
461
813
2,312
$ 13,233

212
1
39
252

$
$

1,915
9
352
2,276

The aggregate annual maturities of long-term debt (including current portion) outstanding as of March 31, 2021 weresummarized as follows:
Millions of yen
Thousands of U.S. dollars
Year ending March 31,
2022¥ 1,667$ 15,057
2,246
20,287
2023
2024
2,934
26,502——2025
2026 and thereafter
—
—
Total
¥ 6,848$ 61,855

Note 2. U.S. dollar amounts
The U.S. dollar amounts are stated solely for the convenience of the reader at the rate of U.S. $1.00 = ¥110.71, the approximate
rate of exchange at March 31, 2021. The translation should not be construed as a representation that the Japanese yen amounts
actually represent, have been or could be converted into U.S. dollars at that or any other rate.

Note 3. Inventories
Inventories as of March 31, 2020 and 2021 consisted of the following:
Finished products
Work in process
Raw materials and supplies
Total

¥
¥

2020

Millions of yen

2,385
810
3,230
6,426

¥
¥

2021

2,721
707
3,118
6,547

Thousands of U.S. dollars
2021$ 24,578
6,386
28,164$ 59,136

The write-downs of inventories resulting from decreased profitability for the years ended March 31, 2020 and 2021 were as
follows:
Millions of yen

Cost of sales

14 ANNUAL REPORT 2021

¥

2020

523

Thousands of U.S. dollars

¥

2021

370

$

2021

3,342

Note 6. Retirement benefits plans
The Company and certain of its domestic consolidated subsidiaries have either funded or unfunded defined benefit pension
plans and defined contribution benefit pension plans.
The Company has funded corporate pension fund plans and defined contribution pension plans. As a defined benefit pension
plan, the Company has adopted a cash balance plan. Under the cash balance plan, the plan sponsor contributes money into aplan participant’s account based on the points according to the employee’s years of service and job performance and the points
are calculated with an interest credit that reflects changes in market interest rates.
Certain subsidiaries have funded and unfunded lump-sum payment plans and defined contribution pension plans. The simplified
method is applied for the calculation of liability for retirement benefits and retirement benefit expense of certain domestic
subsidiaries.
The changes in the retirement benefit obligation during the years ended March 31, 2020 and 2021 were as follows:
Balance at the beginning of the year
Service cost
Interest cost
Actuarial gain and loss
Retirement benefit paid
Other
Balance at the end of the year

¥

¥

2020

6,530
280
42
(218)
(756)
(1)
5,877

Millions of yen

2021¥ 5,877
262
38
48
(589)
5
¥ 5,644

Thousands of U.S. dollars
2021$ 53,085
2,367
343
434
(5,320)45$ 50,980

ANNUAL REPORT 2021 15

The changes in plan assets during the years ended March 31, 2020 and 2021 were as follows:
Balance at the beginning of the year
Expected return on plan assets
Actuarial gain and loss
Contributions by the Company
Retirement benefits paid
Balance at the end of the year

¥

¥

2020

Millions of yen

7,696
138
(341)
183
(747)
6,929

2021

¥ 6,929
126
945
220
(580)
¥ 7,641

Thousands of U.S. dollars
2021$ 62,587
1,138
8,536
1,987
(5,239)$ 69,018

The funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2020 and 2021
were as follows:
Funded retirement benefit obligation
Plan assets at fair value

¥

2020

Millions of yen

2021

Unfunded retirement benefit obligation
Net liability for retirement benefits in the balance sheet

5,855(6,929)(1,074)22(1,051)¥ 5,623(7,641)(2,017)20(1,996)

Liability for retirement benefits
Asset for retirement benefits
Net liability for retirement benefits in the balance sheet

62(1,114)¥ (1,051)

61(2,058)¥ (1,996)

Thousands of U.S. dollars
2021$ 50,790(69,018)(18,219)181(18,029)551(18,589)$ (18,029)

The components of retirement benefit expense for the years ended March 31, 2020 and 2021 were as follows:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain and loss
Retirement benefit expense

¥

¥

2020

Millions of yen

283
42
(138)
(63)
124

¥

¥

2021

259
38
(126)
93
265

Thousands of U.S. dollars
2021

$

2,339
343
(1,138)840$ 2,394

The components of retirement benefits asset and liability adjustments included in other comprehensive income (before tax
effect) for the years ended March 31, 2020 and 2021 were as follows:
Actuarial gain and loss

¥

2020

Millions of yen

(188)

¥

2021

990

Thousands of U.S. dollars
2021

$

8,942

The components of retirement benefits asset and liability adjustments included in accumulated other comprehensive income(before tax effect) as of March 31, 2020 and 2021 were as follows:
Unrecognized actuarial gain and loss

¥

2020

(179)

Millions of yen

¥

2021

811

Thousands of U.S. dollars
2021

$

7,325

The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2020 and 2021 were as
follows:
Bonds
StocksLife insurances
Funds
Other
Total

2020

4.1%
34.6
38.5
9.8
13.0
100.0%

7.1%
34.2
33.4
9.4
15.9
100.0%The required contributions to the defined contribution plans by the Company and its consolidated subsidiaries for the years ended
March 31, 2020 and 2021 amounted to ¥86 million and ¥92 million ($830 thousand), respectively.
Assumptions to calculate the actuarial present value of the benefit obligation and the expected return on plan assets as of March
31, 2020 and 2021 were as follows:
Discount rate
Re-evaluation rate
Expected rates of return on plan assets

16 ANNUAL REPORT 2021

0.6%
0.71%
2.0%

Information regarding changes in net assets for the years ended March 31, 2020 and 2021 was as follows:
1. Shares issued and outstanding / Treasury stock

Types of shares

Shares issued:
Common stock
Treasury stock:
Common stock

Number ofshares at April
1, 2019

2020

Increase

Decrease

Number ofshares at March
31, 2020

Number ofshares at April
1, 2020

2021

0.6%
0.58%
2.0%

2021

Increase

Decrease

Number ofshares at March
31, 2021

7,500,000——

7,500,000

7,500,000——

7,500,000

1,019,483

48,0264,600

1,062,909

1,062,909

1,127

—

1,064,036

The Company’s shares remaining in the Board Benefit Trust (BBT) are included in treasury stock (43,800 shares at March 31, 2020
and 2021).
Number of shares

1. Details of the increase of treasury stock are as follows:
Increase due to purchase of shares
Increase due to purchase of shares of less than standard unit
Increase in shares held by affiliates accounted for by the equity method

2020

2021

46,800
573
653

—
573
554

2. Details of the decrease of treasury stock are as follows:
Decrease due to sales of shares held by subsidiaries

4,600

—

2. Dividends(1) Dividends paid
Resolution

Type of shares

Shareholders’ meeting on Common
June 25, 2019stock

Total dividends Dividends per share(Millions of yen)
(Yen)

326

50

2020

Cut-off date

Effective date

March 31, 2019

June 26, 20192021

Resolution

Type of shares

Shareholders’ meeting on Common
June 23, 2020
stock

Total dividends Dividends per share(Millions of yen)
(Yen)

259

40

2021

Cut-off date

Effective date

March 31, 2020

June 24, 2020

Total dividends(Thousands of
U.S. dollars)

Dividends per share(U.S.dollars)

2,339

0.36

(2) Dividends with the cut-off date in the year ended March 31, 2020 and the effective date in the year ending March 31, 2021
Resolution

Total dividends Dividends per share
Type of shares Source of dividends (Millions of yen)
(Yen)

Shareholders’Commonmeeting on
stock
June 23, 2020

Retainedearnings

259

40

2020

Cut-off date

Effective date

March 31, 2020

June 24, 2020

Dividends with the cut-off date in the year ended March 31, 2021 and the effective date in the year ending March 31, 2022
2021

2021

1. The total plan assets include retirement benefit trusts which constitute 10.5% for the year ended March 31, 2020 and 14.5%
for the year ended March 31, 2021.
2. The expected rates of return on plan assets has been estimated based on the anticipated allocation of plan assets to each asset
category and the expected long-term returns on plan assets held in each category.

2020

Note 7. Net assets

Resolution

Total dividends Dividends per share
Type of shares Source of dividends (Millions of yen)
(Yen)

Shareholders’Commonmeeting on
stock
June 23, 2021

Retainedearnings

324

50

2021

Cut-off date

Effective date

March 31, 2021

June 24, 2021

Total dividends(Thousands of
U.S. dollars)

2,927

Dividends per share(U.S.dollars)

0.45

Dividends of the Company’s shares remaining in the Board Benefit Trust (BBT) ¥2 million ($18 thousand) are included in total
dividends based on the resolution at shareholders’ meeting on June 23, 2021.

Note 8. Research and development costs
Research and development costs included in cost of sales and selling, general and administrative expenses for the years ended
March 31, 2020 and 2021 amounted to ¥2,845 million and ¥2,515 million ($22,717 thousand), respectively.

Note 9. Selling, general and administrative expenses
Major elements of selling, general and administrative expenses for the years ended March 31, 2020 and 2021 were as follows:
Salaries and wages of employees
Provision for bonus
Provision for directors’ and officers’ bonus
Retirement benefit cost
Provision for directors’ and officers’ retirement benefits
Provision for directors’ and officers’ share awards
Provision for doubtful accounts

¥

2020

3,833
261
0
81
0
—
(2)

Millions of yen

2021¥ 3,601
308
28
131
25
14
2

Thousands of U.S. dollars
2021$ 32,526
2,782
253
1,183
226
126
18

ANNUAL REPORT 2021 17

Note 10. Gains and losses of fixed assets

Thousands of U.S. dollars
2021

The components of gains and losses of fixed assets for the years ended March 31, 2020 and 2021 were as follows:
Gains on sales of fixed assets
Buildings
Machinery and vehicles
Tooling and office furniture
Land
Total

¥

Millions of yen

2020

9
28
10
41
90

¥

¥

Buildings
Machinery and vehicles
Tooling and office furniture
Total

¥

Millions of yen

2020

17
18
1
36

¥

¥

¥

Millions of yen

2020

7
52
12
0
72

¥

—
14
7
—
21

2021

¥

Loss on disposal of fixed assets
Buildings
Machinery and vehicles
Tooling and office furniture
Intangible asset
Total

2021

¥

Loss on sales of fixed assets¥

Thousands of U.S. dollars
2021

$

$

—
—
0
0

$

—
—
0
0

$

Thousands of U.S. dollars
2021

—
60
19
—
79

$

—
542
172
—
714

$

Note 11. Loss on impairment of fixed assets
An impairment loss is recognized when the carrying amount of an asset exceeds undiscounted future net cash flows which are
expected to be generated by such asset. The impairment loss is measured by the amount by which the carrying amount of theasset exceeds its recoverable amount being the higher of the discounted future net cash flows or net realizable value.
For the year ended March 31, 2020, impairment losses were recognized for the following assets.

Asset group

Location

Use

Buildings

Connector/Jack
CS DivisionJapan¥
production facilities
Touch panel production
SCI DivisionJapanfacilities
Research & Development
Wireless module
Japan
Centerproduction facilities
SMK Manufacturing,
Remote controls/Unit
U.S.A.
Inc.
production facilities
SMK Electronica S.A.
Remote controls/Unit
Mexicode C.V.
production facilities
Connector/Jack
production facilities
SMK Electronics
China
Switch/Remote controls/(Dongguan) Co., Ltd.
Unit production facilities
Touch panel/Remote
SMK Electronics
Philippines controls production(Phils.) Corporation
facilities
SMK-LOGOMOTIONJapan
OthersCorporation
Total
¥

8

Millions of yen
2020

MachineryandvehiclesToolingand officefurniture

¥

¥

995

Construction
inprogress

194

¥

—

Intangible
assets

¥

Total

—

¥ 1,197

Research &Japan
Development Center

Other parts business Japan

Use

Wireless module¥
production facilities
Other parts production
facilities

$

$

$

18

—

—

—

Total

$

18

—

—

—

0

—

—

—

0

Ireland Business assets

—

0

0

0

—

117

0

135

SMK Hungary Kft.

Hungary Assets to be sold

135

397

18

18

—

—

—

578

—

18

—

27

—

—

45

99

244

0

36

0

9

—

—

307

45

$ 1,174

SMK Electronics
Technology Development China(Shenzhen) Co.,Ltd.
Showa Enterprize,
Japan
HaibaraTotal

Business assets
Real estate for rent
$

379

$

434

$

63

$

90

$

9

$

117

$

The Company’s assets for business operations are categorized into groups on a division-by-division basis and the Company’s
rental property and idle property on an individual property basis, whereas consolidated subsidiaries’ assets for business operations
are categorized into groups on a subsidiary-by-subsidiary basis and their rental property and idle property on an individual
property basis.
Of the above asset groups, Research & Development Center, Other parts business, SMK Electronics (Europe) Ltd. and SMK
Electronics Technology Development (Shenzhen) Co., Ltd. suffered declining trends in net sales and income due to intense pricecompetition in the market. The future cash flows from their asset groups were estimated and it was found that they could not
generate sufficient profitability to recover the carrying value of the asset groups, and therefore their book value was reduced to
the recoverable amounts. As for SMK Hungary Kft., because its assets are to be sold for the year ended March 31, 2022, its bookvalue was reduced to the recoverable amount. As for Showa Enterprize, Haibara, because it suffered declining trends in rent
income, its book value was reduced to the recoverable amount.
The recoverable amount of the asset group of the Research & Development Center, Other parts business, SMK Electronics(Europe) Ltd. and SMK Electronics Technology Development (Shenzhen) Co., Ltd. were measured at value in use, and since nofuture cash flows are expected, the full amount of the book value of the fixed assets regarding this business is recorded as
impairment loss. The recoverable amount of the asset group of SMK Hungary Kft. was measured at net realizable value, which
was calculated by deducting the estimated disposal cost from the future selling price. The recoverable amount of the asset groupof Showa Enterprize, Haibara was measured at net realizable value, which was calculated based on valuations by external
independent real estate appraisers.

Note 12. Income taxes

—

38

1

—

0

40

Income taxes applicable to the Company and its domestic subsidiaries comprised corporation, inhabitants’ and enterprise taxes
which, in the aggregate, resulted in statutory tax rates of approximately 30.5% for the year ended March 31, 2021.
A reconciliation between the statutory tax rate and the effective tax rate for the years ended March 31, 2021 was as follows. For
the year ended March 31, 2020, note is omitted because it became loss before income taxes.

0

17

9

1

0

30

Statutory tax rate

2

0

1

2

6

904

173

—

—

1,077

174

422

—

—

—

597

—

—

0

—

—

0

183

¥ 2,380¥2¥ 2,953

¥

382

¥

3

Buildings

Machinery
Toolingandand officevehiclesfurniture

LeasedassetsRight ofuse
assetsIntangible
assets

¥

¥

¥

¥

¥

—

—

¥

2

—

—

—

Items such as entertainment expenses permanently non-deductible for tax purposes
Items such as dividend income permanently non-taxable

—

—

0

—

—

—

0

0

0

0

—

13

0

15

SMK Hungary Kft.

Hungary Assets to be sold

15

44

2

2

—

—

—

64

Business assets

—

2

—

3

—

—

5

11

Real estate for rent

27

0

4

0

1

—

—

34

48

¥

7

¥

10

¥

1

¥

13

¥

5

Inhabitant tax on per capita basis
Statutory tax rate differences in subsidiaries
Elimination of dividend income
Accumulated surplus of subsidiaries
Other
Effective tax rate

—%
—
—
—
—
—
—
—
—
—
—
—%

2021

30.5%
1.3
(6.6)
(4.0)
(3.7)
1.6
0.9
(9.0)
8.0
0.4
(2.2)
17.2%

2

—

¥

Tax credit for R&D expenses
Foreign withholding taxes

2020

Total

¥

—

18 ANNUAL REPORT 2021

$

—

2

—

42

$

—

—

Ireland Business assets¥$

SMK Electronics(Europe) Ltd.

Change in valuation allowance—

Intangible
assets

—

0

Land

—

Buildings

1

SMK Electronics(Europe) Ltd.

SMK Electronics
Technology Development China(Shenzhen) Co.,Ltd.
Showa Enterprize,
Japan
Haibara
Total

Wireless module$
production facilities
Other parts production
facilities

Land

Right ofuse
assets0Millions of yen
2021

Location

Research &Japan
Development Center

Use

Leasedassets0

For the year ended March 31, 2021, impairment losses were recognized for the following assets.

Asset group

Location

Other parts business Japan

Thousands of U.S. dollars
2021

2021

¥

—
126
63
—
190

Asset group

Machinery
Toolingandand officevehiclesfurniture¥

130
ANNUAL REPORT 2021 19

The significant components of deferred tax assets and liabilities at March 31, 2020 and 2021 were as follows:
Millions of yen

2020

Deferred tax assets:
Inventory write-down
Accrued bonuses
Intercompany profit on inventory
Liability for retirement benefits
Allowance for doubtful accounts
Impairment loss
Operating loss carryforwards for tax purposes
Other
Total gross deferred tax assets
Valuation allowance for net operating loss carryforwards
Valuation allowance for deductible temporary differences
Total valuation allowance
Total deferred tax assets¥

Deferred tax liabilities:
Asset for retirement benefits
Deferred gain on land
Advanced depreciation on buildings
Reserve for special depreciation
Net unrealized gains on other securities
Accumulated surplus of foreign subsidiaries
Valuation difference on subsidiaries
Other
Deferred tax liabilities
Net deferred tax assets

¥

358
180
52
8
38
1,248
1,790
529
4,207
(1,782)(1,937)(3,720)
487

2021

¥

(340)
(36)
(6)
(8)
(37)
(107)
(309)
(32)
(878)
(391)

93
202
45
7
858
736
1,186
825
3,955
(1,140)(2,422)(3,563)392

Thousands of U.S. dollars
2021

840
1,825
406
63
7,750
6,648
10,713
7,452
35,724(10,297)(21,877)(32,183)
3,541(5,672)
(325)
(45)
(36)
(1,030)(1,048)(2,782)(343)(11,327)$ (7,777)

1. Valuation allowance has decreased by ¥156 million ($1,409 thousand). This decrease is due to the additional recognition ofvaluation allowance for allowance for doubtful accounts in SMK Corporation ¥818 million ($7,388 thousand) with the exclusionof SMK-LOGOMOTION from scope of consolidation due to the filing of petition for bankruptcy, and due to the reversal ofvaluation allowance for net operating loss carryforwards in SMK-LOGOMOTION ¥590 million ($5,329 thousand), valuation
allowance for inventory write-down in SMK-LOGOMOTION ¥270 million ($2,438 thousand) and valuation allowance for
impairment loss in SMK-LOGOMOTION ¥264 million ($2,384 thousand).
2. A breakdown of net operating loss carryforwards and valuation allowance by expiry date as of March 31, 2020 and 2021 is asfollows:

2020

Net operating loss carryforwards (a)Valuation allowance
Deferred tax assets

2021

Net operating loss carryforwards (a)Valuation allowance
Deferred tax assets

2021

Net operating loss carryforwards (a)Valuation allowance
Deferred tax assets

Due inone yearor less

¥

¥

8
(8)
—

Due inone yearor less

¥

¥

14
(14)
—

Due inone yearor less

$

$

126
(126)
—

Millions of yen

Due after
two years
throughthree years

Due after
three years
throughfour years

¥

¥

¥

¥

13
(13)
—

¥

1
(1)
—

¥

4
(4)
—

Millions of yen

Due after
one yearthrough
two years

Due after
two years
throughthree years

Due after
three years
throughfour years

¥

¥

¥

¥

1
(1)
—

Due after
one yearthrough
two years

$

$

9
(9)
—

¥

4
(4)
—

¥

149
(149)
—

Thousands of U.S. dollars

Due after
two years
throughthree years

$

$

36
(36)
—

Due after
three years
throughfour years$ 1,346(1,346)$—

Due after
four years
throughfive years

¥

¥

189
(189)
—

Due after
four years
throughfive years

¥

¥

31
(31)
—

Due after
four years
throughfive years

$

$

280
(280)
—

Due after
five years¥ 1,573(1,566)¥
7

Due after
five years

¥

¥

983
(938)
45

Due after
five years

$

8,879
(8,473)
$
406

Total

¥ 1,790(1,782)¥
7

Total¥ 1,186(1,140)
¥
45

Total

$ 10,713(10,297)$406(a) The amount is determined by multiplying the corresponding net operating loss carryforwards by the effective statutory tax rate.

20 ANNUAL REPORT 2021

The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income for the years ended March 31, 2020 and 2021.

$

(628)
(36)
(5)
(4)
(114)
(116)
(308)
(38)
(1,254)¥ (861)

Due after
one yearthrough
two years

Note 13. Other comprehensive income

Net unrealized gains (losses) on other securities:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effectNet unrealized gains (losses) on other securities
Net unrealized gains (losses) from hedging instruments:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effectNet unrealized gains (losses) from hedging instruments
Foreign currency translation adjustments:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effectForeign currency translation adjustments
Retirement benefits asset and liability adjustments:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effect
Retirement benefits asset and liability adjustments
Total other comprehensive income

Millions of Yen

2020

¥

¥

(275)

Thousands of U.S. dollars
2021

2021

¥

259

$ 2,339

2

(0)

(0)

(272)
81
(191)

259
(77)
181

2,339
(696)
1,635

(18)

(7)

(63)

7

18

163

(10)
—
(10)

10
—
10

90
—
90

(272)

325

2,936

—

(22)

(199)

(272)
3
(268)

302
(4)
297

2,728
(36)
2,683

(124)

896

8,093

(63)

93

840

(188)
55
(132)
(603)

990
(300)
690
¥ 1,180

8,942(2,710)6,232$ 10,658

Note 14. Amounts per share
1. In the calculation of net assets and profit (loss) per share, the Company’s shares remaining in the Board Benefit Trust (BBT),
which are recorded as treasury stock under shareholders’ equity, are included in the treasury stocks that are deducted in thecalculation of the number of shares as of March 31, 2020 and 2021 and the average number of shares for the year ended
March 31, 2020 and 2021. In the calculation of total net assets per share, the said treasury stock deducted as of March 31,
2020 and 2021 is 43,800 and 43,800, respectively. In the calculation of profit (loss) per share, the said treasury stock
deducted for the year ended March 31, 2020 and 2021 is 43,800 and 43,800, respectively.
2. Profit (loss) attributable to owners of parent per share of common stock is based on the following information:
Basic Profit (loss) attributable to owners of parent per share:
Profit (loss) attributable to owners of parent
Profit (loss) attributable to owners of parent not attributable tocommon stockholders
Profit (loss) attributable to owners of parent attributable tocommon stock
Average number of shares of common stock outstanding during
the year

Millions of yen

2020

Thousands of U.S. dollars
2021

2021

¥(2,651)¥1,917$17,316———(2,651)

1,917

17,316

2020

Thousands of shares

6,452

2021

6,436

Note 15. Financial instruments(1) Policy for financial instruments
The Company and consolidated subsidiaries manage temporary cash surpluses through low-risk financial assets.
The Company and consolidated subsidiaries raise funds through bank borrowings.
The Company and consolidated subsidiaries use derivatives for the purpose of reducing risk and do not enter into derivatives
for speculative or trading purposes.

ANNUAL REPORT 2021 21

(2) Types of financial instruments and related risk
Trade receivables – trade notes and accounts receivable, electronically recorded monetary claims – are exposed to credit riskin relation to customers. Regarding this risk, the credit management is executed periodically.
Marketable securities and investment securities are exposed to market risk. The fair value of those securities is reported in aboard meeting periodically.
Substantially all trade payables – trade notes and accounts payable – have payment due dates within one year.
Short-term loans payable are raised mainly in connection with business activities, and the repayment dates of long-term debt
extend up to five years from the balance sheet date. Long-term debt with variable interest rates is exposed to interest rate
fluctuation risk. However, to reduce such risk and fix interest expense for long-term debt bearing interest at variable rates, theCompany and consolidated subsidiaries utilizes interest rate swap transactions as a hedging instrument. Information regarding
the method of hedge accounting, hedging instruments and hedged items, hedging policy, and the assessment of effectivenessof hedging activities is found in Note 1 (t).
Execution and management of derivatives transactions are carried out in accordance with the company rules specifying thetransaction authority. In addition, in order to alleviate credit risk, derivative transactions are only dealt with banks with highcredit ratings. Although operating liabilities and loans payable are exposed to liquidity risk, the Group’s companies are able tomanage it by using methods such as preparing monthly cash management plans.
(3) Additional information regarding fair value of financial instruments
Fair value of financial instruments includes the value based on the market price. In addition, if such information is absent,
reasonable assessments of their value are included. Furthermore, the contract amounts, etc. relating to derivatives
transactions are described in Note 17. Derivatives themselves do not serve as indicators of market risk involved in derivatives
transactions.

Cash and cash equivalents
Time deposits
Notes and accounts receivable,
tradeElectronically recorded monetaryclaimsInvestment securities
Notes and accounts payable, trade
Short-term loans payable
Accounts payable, non-tradeLong-term debt
Derivatives

2020

2021

Thousands of U.S. dollars
2021

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

Fair value

Difference

10,89910,899—11,242

11,242—

101,545

101,545

—

1,432

1,432

—

1,325

1,325

—

11,968

11,968

—

1,651
5,101
6,551
1,468
8,601
(21)

1,651
5,101
6,551
1,468
8,569
(21)

—
—
—
—
(32)
—

1,904
5,029
4,454
1,775
6,848
(47)

1,904
5,029
4,454
1,775
6,776
(47)

—
—
—
—
(71)
—

17,19845,42540,231
16,03361,855(425)

17,19845,42540,231
16,033
61,205
(425)

—
—
—
—
(641)
—

¥ 10,437
77¥ 10,437
77

¥

—
—

¥ 8,74257¥ 8,74257¥——$ 78,963
515$ 78,963
515

$

—
—

Long-term debt includes current portion of long-term debt recorded as short-term loans payable in the consolidated balance
sheets.
The assets and liabilities arising from derivatives are shown on a net basis with the amount in parentheses representing a net
liability position.
1. Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions
Cash and cash equivalents, time deposits, notes and accounts receivable, trade and electronically recorded monetary claims
Since these items are settled in a short period of time, their carrying value approximates fair value.
Investment securities
The fair value of stocks is based on quoted market prices.
Short-term loans payable, notes and accounts payable, trade and accounts payable, non-trade
Since these items are settled in a short period of time, their carrying value approximates fair value.
Long-term debt
The fair value of long-term debt is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new loans were entered into.
Derivatives
Please refer to Note 17. Derivatives of the notes to the consolidated financial statements.
2. Financial instruments whose fair value is extremely difficult to determine
Unlisted securities¥

Millions of yen

2020

841

¥ 1,209

Millions of yen

2020

Cash equivalents and time deposits
Notes and accounts receivable,
tradeElectronically recorded monetaryclaimsTotal
22 ANNUAL REPORT 2021

2021

Due after
five years
throughten years

Due inone yearor less

Due after
one yearthroughfive years

Due after
five years
throughten years—$ 79,397

10,899——11,242——

101,545

1,432

—

—

1,325

—

—

11,968—¥ 21,358—$ 192,918¥ 10,506¥ 22,839

¥

¥

—

—

¥

¥

—

¥ 8,790

¥

¥

—

—

¥

¥

Due inone yearor less

Due after
one yearthroughfive years$—

Due after
five years
throughten years

$

—

$

—

—
—

$

¥

¥

960
960

546
546
¥ 1,506

¥

Book
value

Acquisition¥ 1,896
1,896¥ 1,498
1,498

(182)
7
(182)
7
144 ¥ 1,904

8
8¥ 1,506

327
327

Thousands of U.S. dollars
2021

Unrealized
gain (loss)

¥

Book
value

Acquisition

Unrealized
gain (loss)$ 17,126
17,126$ 13,531
13,531$ 3,595
3,595

(1)
63
(1)
63
397 $ 17,198

72
72$ 13,603(9)(9)$ 3,586

398
398

¥

Unlisted stocks of ¥532 million at March 31, 2020 and ¥853 million ($7,704 thousand) at March 31, 2021 are not included in theabove table because there were no quoted market prices available and the fair value is extremely difficult to determine.
Investment securities in unconsolidated subsidiaries and affiliates are as follows:
Investment securities

Millions of yen

2020

¥

Proceeds from sales of securities
StocksGains on sales
Stocks
Losses on sales
Stocks

308

2020

¥

Thousands of U.S. dollars
2021

2021

¥

355

$ 3,207

Millions of yen

—
—
—
—
—
—

2021

¥

Thousands of U.S. dollars
2021

0
0
0
0
0
0

$

0
0
0
0
0
0

Impairment of investment securities classified as other securities for the years ended March 31, 2020 and 2021 were as follows:
StocksMillions of yen

2020

¥

2020
Forward foreign exchange contracts:
Sell: US$ / Buy: Yen¥
744
Sell: US$ / Buy: EUR
59
Sell: US$ / Buy: GBP
30
Total
¥
834

Thousands of U.S. dollars
2021

Due after
one yearthroughfive years

Unrealized
gain (loss)

Contract amount$ 10,920

Due inone yearor less

Securities whose book value exceeds
their acquisition
Stocks¥ 1,288
Subtotal
1,288
Securities whose acquisition exceeds
their book value
Stocks363
Subtotal
363
Total¥ 1,651

Acquisition

2021

23

Thousands of U.S. dollars
2021

2021

¥

112

$ 1,012

As a matter of policy, the Company does not speculate in derivative transactions. The Company does not anticipate
nonperformance by any of the counterparties to the derivative transactions, all of whom are leading domestic financial institutions
with high bond ratings.
In accordance with the Company’s policy, the accounting department controls derivative transactions and requires approval by
the director responsible for accounting and the representative directors of the Company. The director who has the responsibility
to control the performance and the related risks connected with derivatives reports these to the Management Committee of theCompany.
The Company uses interest rate swaps to hedge the risks from interest rate fluctuations on borrowings. The exceptional methodof hedge accounting is used to account for those transactions.
Millions of yen
Thousands of U.S. dollars(Currency related)

Unlisted securities are not included in the investment securities because there were no quoted market prices available and the fairvalue is extremely difficult to determine.
3. The schedules for redemption of monetary assets and securities with maturities

Book
value

Millions of yen

2020

Note 17. Derivatives

Thousands of U.S. dollars
2021

2021

Information regarding securities classified as other securities at March 31, 2020 and 2021 was summarized as follows:

Information regarding sales of securities classified as other securities for the years ended March 31, 2020 and 2021 was asfollows:

Information regarding fair value of financial instruments at March 31, 2020 and 2021 was summarized as follows:
Millions of yen

Note 16. Securities¥¥

Fair value

2021

722
—
—
722

¥

¥

2020

(1) ¥
(0)
(0)
(1) ¥

Unrealized gain (loss)

2021(39) ¥——(39) ¥

2020

(1) ¥
(0)
(0)
(1) ¥

2021

Contract
amount2021(39) $ 6,522 $————(39) $ 6,522 $(1) Calculation of fair value
The fair value is calculated by the price offered by financial institution.
(2) Derivative transactions to which hedge accounting was applied are excluded from the above table.
Millions of yen(Interest related)
Contract amountInterest rate swaps(Deferral hedge accounting)Interest rate swaps(Exceptional treatment)

2020

2021

¥ 5,004¥600

Due after one year2021

¥ 3,072¥ 3,072¥ 1,940¥(18) ¥

¥

¥

¥

¥

—

—

—

—

2020

(352) $——
(352) $

2021

(352)
—
—
(352)

Thousands of U.S. dollars

Due after
one year

Fair value(7) $ 27,748$ 17,523

$

(63)

—

$

$

—

2021

¥

2021

Unrealized
gain (loss)

Contract
amountFair value

2020

Fair value

2021

$

—

2021

—

2021

(1) Calculation of fair value
The fair value is calculated by the price offered by financial institution.
(2) Regarding interest rate swaps to which the exceptional treatment applied, they are accounted for as if they were an integral
part of the hedged long-term debt, and their fair value is included in the fair value of long-term debt in Note 15.

—
ANNUAL REPORT 2021 23

Note 18. Investment and rental property
The profit of investment and rental property for the year ended March 31, 2020 amounted to ¥491 million, the gain on sales of
fixed assets amounted to ¥50 million and the loss on sales of fixed assets amounted to ¥17 million.
The profit of investment and rental property for the year ended March 31, 2021 amounted to ¥498 million ($4,498 thousand) andthe loss on impairment of fixed assets amounted to ¥28 million ($253 thousand).
Information on the fair value of investment and rental property at March 31, 2020 and 2021 was summarized as follows:
Millions of yen

2020

Book value
Book value
beginning
end of theof the year Net change
year

¥

6,402

¥

534

¥

6,936

Fair value
end of theyear¥ 14,305

2021

Book value
Book value
beginning
end of theof the year Net change
year

¥

6,936

¥

(154) ¥

6,782

Thousands of U.S. dollars
2021

Fair value
end of theyear

Book value
Book value
beginning
end of theof the year Net changeyear¥ 14,741$ 62,650

Fair value
end of theyear$ (1,391) $ 61,259$ 133,150

1. The fair value represents the acquisition cost less accumulated depreciation.
2. The components of net change in book value for the year ended March 31, 2020 included increases mainly due to acquisitionsin the amount of ¥578 million and reclassifications from assets for business operation ¥147 million, and decrease mainly due tosales and disposal of fixed assets ¥50 million and depreciation ¥142 million. The components of net change in book value forthe year ended March 31, 2021 included increases mainly due to acquisitions in the amount of ¥22 million ($198 thousand),and decrease mainly due to depreciation ¥148 million ($1,336 thousand) and impairment of fixed assets ¥28 million ($253
thousand).
3. The fair value is mainly based upon the amount appraised by outside independent real estate appraisers.

(Overview)
The reporting segments of the Company and consolidated subsidiaries are designed as business segments whose segregatedfinancial information can be obtained and to which the management reviews to decide on the allocation of managerial andfinancial resources and to evaluate their financial performance.
The Company and consolidated subsidiaries are primarily engaged in the three divisions as follows;
CS (Connection System) Division: The division produces and sells connectors and jacks.
SCI (Sensing, Communications and Interface) Division: The division produces and sells remote controls, switches, camera
modules and touch sensor.
Research & Development Center: The center produces and sells wireless module.
The business segment information is prepared in a manner similar to the accounting treatment as described in Note 1. Segment
performance is evaluated based on operating income or loss.

18,670—18,670
141
9,791

¥

¥

35,137—35,137
10
16,856¥

Millions of yen

Subtotal

Total

Adjustment

281 ¥
—
281
(279)
247

54,088 ¥—54,088(127)
26,895

73 ¥
—
73
(117)
7,272

54,161 ¥—54,161(244)
34,168————16,036

Consolidated¥

54,161—
54,161(244)
50,204Other

2,276 $ 438,298
―
―
2,276
438,298(2,502)9,882
2,493
247,493$

Total

325 $ 438,623――
325
438,623(217)
9,665
62,072309,566

Adjustment

Consolidated

$

―
―
―
―
145,055$ 438,623―
438,623
9,665
454,629

9,918

8,554

54

18,526

1,680

20,206―

20,206

14,217

5,826

36

20,098271

20,378―20,378Other is business segments not included in the reportable segments. It includes other parts, leasing, property rental and worker
dispatch businesses.
Adjustment includes corporate assets which are not allocable to the reportable segments.
2. Geographical information(1 ) Net sales
Japan

Net sales¥ 15,688

2021

China

Net sales¥ 13,657

2021

China

Net sales$ 123,358

China

¥

¥

5,605

Other

5,591

Other

$ 50,501(2 ) Fixed assets
2020

Japan

¥ 11,366¥

Japan

Fixed assets¥ 11,412

2021

¥

Japan

Fixed assets$ 103,080

China

China

China

¥

¥

Asia

$ 27,080

¥

857

¥

2,307

Consolidated¥ 54,161

North America
U.S.A.
Other¥ 16,941¥

Europe

660

¥

1,208

Consolidated¥ 48,560

North America
U.S.A.
Other$ 153,021

$

5,962

EuropeConsolidated$ 10,911$ 438,623

Other

862

North
America¥6

Europe¥Consolidated

281¥ 15,392

Millions of yen

Asia

2,998

¥ 19,002

EuropeMillions of yen

Asia

2,875

North America
U.S.A.
Other

Thousands of U.S. dollars

Asia$ 94,851

Other

Millions of yen

Asia¥ 10,501

Japan

Millions of yen

Asia¥ 10,699

Japan

2021

Other

$ 256,806 $―
256,806(650)
141,460

Subtotal

Other

735

North
America¥54

Europe¥Consolidated

202¥ 15,403

Thousands of U.S. dollars

$

Other

6,639

North
America$

488

Europe$Consolidated

1,825$ 139,129

3. Information about major customers
Sales amount and ratio of the major customers which account for 10% or more of net sales is as follows:
Millions of yen

Thousands of U.S.dollars

1,704

1,387

23

3,115

176

3,292

—

3,292

1,633

722

1

2,357

639

2,996

—

2,996

Total

Adjustment

Consolidated(1) Company name is not disclosed because there is a confidentiality clause in the contract with Company A.
(2) For the year ended March 31, 2021, note is omitted because sales amount of Company A is less than 10% of net sales.

36 ¥
—
36
(24)
6,872

48,560—48,5601,070
34,272¥¥

4. Information about the loss on impairment of fixed assets

Reporting Segments
Research &SCI
Development
Division
CenterCS
Division

2021

Net sales
Outside customers
Intersegment sales
Total
Operating income (loss)
Identifiable assets
OthersDepreciation
Increase in fixed assets andintangible fixed assets

Reporting Segments
Research &SCI
Development
Division
CenterCS
Division¥$ 179,207―
179,207
13,043
103,523

Fixed assets

1. Business segment information

Net sales
Outside customers
Intersegment sales
Total
Operating income (loss)
Identifiable assets
OthersDepreciation
Increase in fixed assets andintangible fixed assets

Net sales
Outside customers
Intersegment sales
Total
Operating income (loss)
Identifiable assets
OthersDepreciation
Increase in fixed assets andintangible fixed assets

CS
Division

2020

Note 19. Segment information

2020

2021

Thousands of U.S. dollars

Reporting Segments
Research &SCI
Development
Division
Center

19,840—19,8401,444
11,461¥Millions of yen

Subtotal

Other28,431 ¥—28,431(72)
15,661

252 ¥
—
252
(277)
276

48,524—
48,524
1,094
27,400¥————16,05948,560—48,5601,070
50,332

1,098

947

6

2,051

186

2,237

—

2,237

1,574

645

4

2,225

30

2,256

—

2,256

Major Customer

Company A

Related Segment

CS Division
SCI Division

CS Division
SCI Division
Research & Development Center
Subtotal
Other
Adjustments and eliminations
Consolidated

2020

¥

6,337

2021

¥

2021

—

¥

¥

2020

1,512
1,399
40
2,952
0
—
2,953

$

—

Millions of yen

¥

¥

2021

8
18
2
30
35
64
130

Thousands of U.S.dollars
2021

$

72
163
18
235
316
578
$ 1,174

5. Information about the amortization of goodwill and the balance of goodwill
For the years ended March 31, 2020 and 2021, there was no amortization and balance of goodwill.

24 ANNUAL REPORT 2021

ANNUAL REPORT 2021 25

Note 20. Related party transactions
Significant transactions with related parties for the years ended March 31, 2020 and 2021 were as follows:
Transactions

2020

Terutaka Ikeda (Supreme corporate adviser)¥

Millions of yen

Balances
Other
Other
current
investments
assets

Rent

14

¥

14

¥

Report of Independent Auditors
SMK Corporation and Consolidated Subsidiaries

Independent Auditor’s Report1Millions of yen

Paul Evans (Director)

Transactions
Collection ofInterest
loan
receivable
income¥1¥

Transactions

2021

Terutaka Ikeda (Supreme corporate adviser)¥

1

Balances
Other
Long-term
current
loans
assetsreceivable

¥

1

¥

29

Millions of yen

Balances
Other
Other
current
assetsinvestments

Rent

14

¥

14

¥

1

Millions of yen

Paul Evans (Director)

Transactions
Collection ofloanInterest
receivable
income¥1¥0Balances
Other
Long-term
current
loans
assetsreceivable

¥

1

¥

28

Thousands of U.S. dollars

Transactions

2021

Balances
Other
Other
current
assetsinvestments

Rent

Terutaka Ikeda (Supreme corporate adviser)

$ 126

$ 126

$

9

Thousands of U.S. dollars

Paul Evans (Director)

Transactions
Collectionof loanInterest
receivable
income$9$0Balances
Other
Long-term
current
loans
assetsreceivable

$

9

$ 253

1. Business transactions with related parties are carried out on an arm’s-length basis similar to third party transactions.
2. Terutaka Ikeda is the parent of President and CEO / COO Yasumitsu Ikeda.

Note 21. Subsequent Events
There were no subsequent events for the year ended March 31, 2021.

The Board of Directors
SMK Corporation
OpinionWe have audited the accompanying consolidated financial statements of SMK Corporation and its
consolidated subsidiaries (the Group), which comprise the consolidated balance sheet as at March 31,
2021, and the consolidated statements of income, comprehensive income, changes in net assets, and cash
flows for the year then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at March 31, 2021, and its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with accounting
principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of the audit of the consolidated financial statements as a whole, and in forming the auditor’sopinion thereon, and we do not provide a separate opinion on these matters.

26 ANNUAL REPORT 2021

ANNUAL REPORT 2021 27

Impairment of Property, Plant and Equipment of SMK Electronics (Phils.) Corporation

Recoverability of Deferred Tax Assets

Description of Key Audit Matter

Auditor’s Response

Description of Key Audit Matter

Auditor’s Response

On March 31, 2021, property, plant and equipment
are valued at ¥15,403 million ($139,129 thousand)in the consolidated balance sheet, which
represented 31% of total assets.
As described in the Note (Significant Accounting
Estimates), the Company determined that there
was an indication of impairment for the asset
group related to property, plant and equipment of¥383 million ($3,459 thousand) of SMK
Electronics (Phils.) Corporation during the year
ended March 31, 2021 due to the decline inprofitability as a result of changes in the businessenvironment. However, the Company did notrecognize an impairment loss as the undiscounted
estimated future cash flows generated from theasset group exceeded the carrying amount.
The estimated future cash flows generated fromthe continued use of an asset group are determinedbased on the business plan approved by the Boardof Directors and forecasts of sales volume andsales prices for the periods subsequent to theperiod covered by the business plan.
As described in Note (Significant Accounting
Estimates 1.), the significant assumptions inestimating future cash flows include forecasts ofsales volume and sales prices which serve as thebasis of the business plan.
Given that the significant assumptions used toestimate the future cash flows are subject touncertainty and require management’s judgement,
we determined impairment of property, plant andequipment to be a key audit matter.

The audit procedures we performed to assess theestimated amount of undiscounted future cash
flows used in determining the necessity ofrecognition for impairment loss on property, plantand equipment of SMK Electronics (Phils.)
Corporation include the following, among others:• We compared the cash flows projection periodwith the remaining economic lives of the major
assets.
• We evaluated consistency with the estimatedfuture cash flows and the business plan approvedby the Board of Directors.
• Regarding the business plan for the second andsubsequent terms that reflects future uncertainty,
we considered the management’s assessment of
future uncertainty.
• In order to evaluate the effectiveness ofmanagement’s estimation process in formulating
business plan, we compared business plans inprevious years to actual results.
• With respect to the forecasts of sales volume andsales prices which is the significant assumptions
serve as the basis of the business plan, we
discussed with the management and obtained theestimated future order documents and thepurchase orders prepared by the customers toevaluate consistency with the business plan.

As described in Note (Income taxes), theCompany offset deferred tax assets of ¥392
million ($3,541 thousand), which were determined
to be recoverable, with deferred tax liabilities, andrecorded deferred tax assets of ¥92 million ($831
thousand) and deferred tax liabilities of ¥954
million ($8,617 thousand) in the consolidated
financial statements as of March 31, 2021. Of thisamount, deferred tax assets determined to be
recoverable at SMK Corporation amounted to¥264 million ($2,385 thousand).
The Company determines the recoverability ofdeferred tax assets for future deductible temporary
differences and operating loss carryforwards fortax purposes by estimating taxable income basedon its estimated future profitability.
Estimate of taxable income based on its estimatedfuture profitability is calculated based on the
future business plan and the significant
assumptions including forecasts of sales volume
and sales prices. The Company discloses thesignificant assumptions in Note (Significant
Accounting Estimates 2.).
Given that the significant assumptions applied in
the future business plan involve uncertainties andrequire management’s judgement in assessing therecoverability of deferred tax assets, we
determined it to be a key audit matter.

The audit procedures we performed to assess therecoverability of deferred tax assets included thefollowing, among others:• We examined the amount of deductible
temporary differences and tax loss carryforwards
by involving our tax professionals, and we also
examined the schedule of the years in which
they were expected to be reversed or expired.
• We assessed the underlying business plan toevaluate the estimate of future taxable income.
We assessed the future business plan, by
evaluating its consistency with the business plan
approved by the Board of Directors.
• In order to evaluate the effectiveness ofmanagement’s estimation process in formulating
business plan, we compared business plans inprevious years to actual results.
• With respect to the forecasts of sales volume andsales prices which is the significant assumptions
serve as the basis of the business plan, we
discussed with the management and obtained theestimated future order documents and thepurchase orders prepared by the customers toevaluate consistency with the business plan.

Responsibilities of Management, the Corporate Auditor and the Board of Corporate Auditors for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern and disclosing, as required by accounting principles generally
accepted in Japan, matters related to going concern.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisionsof users taken on the basis of these consolidated financial statements.

28 ANNUAL REPORT 2021

ANNUAL REPORT 2021 29

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
• Consider internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances for our risk assessments, while the purpose of the audit of the consolidated financial
statements is not expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation in accordance with accounting
principles generally accepted in Japan.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Corporate Auditor and the Board of Corporate Auditors regarding, among
other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statement that wehave complied with the ethical requirements regarding independence that are relevant to our audit of thefinancial statements in Japan, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Corporate Auditor and the Board of Corporate Auditors, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

Ernst & Young ShinNihon LLC
Tokyo, Japan
June 23, 2021/s/ Daisuke Ishida
Designated Engagement Partner
Certified Public Accountant/s/ Takeo Sato
Designated Engagement Partner
Certified Public Accountant

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2021 are presented solely for convenience. Our audit also included the translation ofJapanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on
the basis described in Note 2 to the consolidated financial statements.

30 ANNUAL REPORT 2021

ANNUAL REPORT 2021 31

Officer Introduction(As of June 23, 2021)

Directors

Yoshiyuki Kaku

Paul Evans

Director andExecutive Deputy President,
Chief Technology Officer

Director andExecutive Vice President

Yasumitsu Ikeda

President,
Chief Executive Officer andChief Operating Officer

Tetsuo Hara

Toshio Nakamura

Director andExecutive Vice President

Kaoru Ishikawa

Director (Outside)

Director (Outside)

Auditors

Morikazu Fukui
Full-Time Auditor(Outside)

Naru Nakashima
Auditor (Outside)

Fumio Nishimura
Auditor (Outside)

Corporate Executive Officers

Kohei Ohgaki

Executive Vice President,
Chief Financial Officer

Mitsuyuki Masubuchi
Vice President

32 ANNUAL REPORT 2021

Masanobu Ikeo

Executive Vice President

Hiroshi Usami

Vice President,
Chief Information Officer

Takemi Ishibashi
Vice President

Atsushi Obinata
Vice President

Mitsuhiko Goto
Vice President

Fumikazu Hata
Vice President

Mikio Otsubo
Vice PresidentCorporate Information(As of March 31, 2021)

Corporate Data

Shares and Shareholders

Name

SMK Corporation

Established

April 3, 1925

Registered

January 15, 1929

Primary business

Manufacture and sale ofvarious parts forelectro-communication device
and electronic equipment

Capital¥ 7,996,828,021

Stock exchange listing

Tokyo Stock Exchange

Administrator ofshareholders register

Mitsubishi UFJ Trust and Banking
Corporation

Independent auditors

Ernst & Young ShinNihon LLC
Tokyo, Japan

Employees (SMK-Group)

5,407

Global network（As of July 31, 2021）

Domestic bases（7 Bases）

Overseas bases（15 Countries/Areas, 32 Bases）

Tokyo（Head office）, Toyama,
Hitachi, Osaka, Nagoya, Ibaraki
and Fukuoka
Taiwan, Hong Kong, China,
Singapore, Thailand, Malaysia,
Philippines, Korea, Ireland, U.K.,
France, Germany, Belgium,
U.S.A. and Mexico

Authorized shares

19,596,127
7,500,000(including 1,052,489 shares of treasury stock)

Issued shares
Number of shareholders

Major shareholders (top ten)

6,204
Shares owned(1,000 shares)

Percentage ofshares (%)

SMK Cooperating Company Share
Holding Association

413

6.42

The Master Trust Bank of Japan, Ltd.
(Trust Account)

334

5.19

Nippon Life Insurance Company

324

5.03

Mizuho Bank, Ltd.

322

5.00

Dai Nippon Printing Co., Ltd.

320

4.96

MUFG Bank, Ltd.

250

3.89

SMK Employees Share Holding Association

213

3.31

Mitsubishi UFJ Trust and Banking Corporation

180

2.79

Custody Bank of Japan, Ltd. (Trust Account)

163

2.54

The Showa Ikeda Memorial Foundation

150

2.33

Note: The Company holds 1,052 thousand shares of treasury stock,
but is excluded from the above list. Figures for percentage ofshares are calculated after subtracting the number of treasury
stock. The number of treasury stock includes the 43 thousand
shares of the Company held by the Officer Stock Benefit Trust.

Share ownership by shareholder type
Financial institutions

29.53%

Financial instruments dealers

0.77%

Other entities

12.96%

Foreign entities, etc.

6.02%

Individuals and others

50.72%

Please see our website for detailed IR
information.
The IR Information section of SMK’s website includes
annual reports and presentation materials. The website
also carries information about SMK’s products, corporate
data and CSR/ESG initiatives.

Head Office

WebsiteToyama Works

https://www.smk.co.jp/

Hitachi Works＊ The Bluetooth® word mark and logos are registered trademarks owned by Bluetooth SIG, Inc. and any use of such marks by SMK Corporation isunder license.
＊ Other products and company names listed in this report are the registered trademarks or trademarks of their respective holders.

SMK CORPORATION
5-5, Togoshi 6-chome, Shinagawa-ku, Tokyo 142-8511, JAPAN
Tel: +81-3-3785-1111 Fax: +81-3-3785-1068