SEMI ANNUAL REPORT 2012
For the si x m onth s e n de d Se pte m be r 3 0 ,2 0 1 2

Capacitive Touch Panels

Board to Board Connectors

Micro-USB Connectors

Slide Switches

Financial Highlights
SMK Corporation and Consolidated Subsidiaries

Thousands of
U.S. dollars

Millions of yen

2012

2011

2012

2012

¥ 28,515¥ 26,829$ 345,744

Six months ended September 30

Millions of yen
Year ended March 31

Operating Results
Net sales¥ 55,340

Operating income（loss）

（42）

（327）

（4,215）（1,166）

Net income（loss）（590）（1,782）（22,966）（７９９）¥ 51,611¥ 50,627$ 652,419¥ 53,883

28,06625,157324,196

28,257

Financial Position
Total assets
Total net assets

Per Share Data

Yen

U.S. dollars

Yen$ （0.32）¥（11.04）

Net income（loss）:
Basic¥ （8.10）¥ （24.83）

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥77.60 = U.S. $1.00.

Net sales■ Full year ■ ■ First half

Operating income（loss）
Millions of yen

80,000 72,742■ Full year

■ ■ First half

3,000
64,371

61,914

2,479
1,996

32,280940

33,00228,51526,829

238

2010

2011

2012
Sep.

2012
Mar.

■ First half

30

yen

25.19

（590）

（42）

0

（799）

（327）

（1,500） 2009

Basic net income (loss) per share■ Full year

1,159
1,037

0

（1,620）（1.166）2009

Millions of yen

1,862

2,284

20,0000■ ■ First half

2,000 1,710

1,500

44,60040,000■ Full year

1,643

55,34060,000Millions of yen
2,754

Net income (loss)

2010

2011

2012
Mar.

2012
Sep.

（2,000） 2009

Total assets■ Full year ■ First half
58,16856,11360,000

2011

2012
Mar.

53,883■ Full year

■ First half

Millions of yen

40,00050,62714.14

30,00029,07931,127

29,862

28,25725,15740,00020,0000
20,000（11.04）（21.68）（30）（1,782）2012
Sep.

Total net assets
Millions of yen

53,0592010

2009

10,000（24.83）2010

1 SEMI ANNUAL REPORT 2012

2011

2012
Mar.

2012
Sep.

0

2009

2010

2011

2012
Mar.

2012
Sep.

0

2009

2010

2011

2012
Mar.

2012
Sep.

To Our Shareholders and Investors

We are obliged to you for your continued
support and patronage.
We would like to report on the outline
and results of the SMK Group’sbusinesses for the half period of the
91st fiscal year (April 1, 2012 to
September 30, 2012).
We look forward to your continuing
support and encouragement.
November 2012

Yasumitsu Ikeda
President and COO

Tetsuya Nakamura
Chairman and CEO

Perfomance Overview
During the half period of the 91st fiscal year ended September 30, 2012, although the U.S. economy
showed a moderate recovery as consumer spending recovered against the backdrop of improved
employment, the overall growth of the global economy slowed due to decreased exports and thestagnant growth of capital investments in emerging nations such as China and India, and the impact ofthe deterioration of European economies caused by governmental debt crises. Despite demand forrecovery from damage caused by the Great East Japan Earthquake, the Japanese economy continued
to face severe circumstances due to issues such as the persistently strong yen and the restriction ofelectricity supply. In the electronic component industry, demand for smartphone and tablet devicerelated components expanded, whereas demand for our components for flat-panel televisions andlaptop computers remained low.
Under such circumstances, SMK Corporation strove to develop new products that can bedifferentiated from those of our competitors and reinforce our efficient sales structure. Despite such
efforts, our revenue decline, lingering yen appreciation and increased costs at manufacturing bases
led to decreases in consolidated revenues and income for the half period of the 91st fiscal year ended
September 30, 2012, compared with a year earlier.
Looking ahead, to recover business performance quickly amid uncertainty in the global economy, we
will strive to develop businesses in new markets such as the environmental, energy and healthcare
industries and improve operational efficiency with stronger cost competitiveness, thereby ensuring a
corporate structure that can address market changes.
SEMI ANNUAL REPORT 2012 2

Overview of Consolidated Results by Division(April 1, 2012 to September 30, 2012)

Other￥119 Million

Touch Panel Division

0.4％￥4,735 Million

17.6％

Net sales￥26,829

Functional Components
Division

Connection System
Division

Million￥12,514 Million

46.7％￥9,460 Million

35.3％

Connection System Division
Driven by positive growth of smartphones, tablet
devices, along with contribution of steady expansionof automotive and photovoltaic modules, the sales ofconnectors grew remarkably compared to theprevious year. However, the serious impact of theplunge in sales in the audiovisual (AV) market andunsatisfactory sales of mobile game consoles kept
Connector for LED lighting
Applications : LED lighting

us from achieving our target.
Despite uncertainty over the super strong yen and

Major Products● RF coaxial connectors● FPC connectors● Board to Board connectors● Jacks

3 SEMI ANNUAL REPORT 2012

the international market, we will strive to develop new
products and product series in our mainstay
information communications field and other markets
that have growth potential.

Functional Components Division
In the audiovisual industry, sales of our functional
components for IP television sets and otheraudiovisual sets progressed favorably. However,sales for flat-panel televisions and disc players
continued to be stagnant. Sales for cellular phones
fell significantly because of customers’ low business
High-load push switches

Applications : Keyless entry systems, car audio equipment
and operational use for other devices and equipment

performance. In contrast, sales for air conditioners,
home appliances and environmentally friendly
products achieved solid figures as a result of shifting

Major Products● Remote controls● Switches● Bluetooth® units● Camera modules

to highly functioned products.
For the second half where uncertainty is expected
to further increase, the Division will focus on
increasing sales by striving to acquire orders ingrowing markets.

Touch Panel Division
Sales of our touch panels for automotives werefavorable with strong demand for touch panels for car
navigation system in Japan and overseas. Demandfor optical touch panels for the ATM market expanded
and sales grew steadily. Although the cellular phonemarket was challenging due to intensified competition,
demand of touch panels for smartphones is growing
Capacitive touch panel integrated withcapacitive switch
Applications : Car navigation, automotive central
control and tablet devices

stronger, for which we will further reinforce order
receiving activities.
We will strive to expand sales of capacitive touch

Major Products● Resistive touch panels

panels and other products in the automotive andtablet device markets which have the potential to grow.

● Capacitive touch panels● Optical touch panels

SEMI ANNUAL REPORT 2012 4

TopicsTEXPO2012
From June 6 (Wednesday) to June 8 (Friday) 2012, we held SMK TEXPO2012, SMK Corporation’s technicalexhibition, at Garden City Shinagawa in Tokyo. Our first exhibition was held in 1985, and this was the eighth
time of this event. With a theme of “Navigating smartly for the people, the future, and the environment” weexhibited approximately 300 items consisting of new products and our latest technologies currently underresearch and development.
At TEXPO2012, which was visited by 2,430 people, we had a full line of exhibitions such as the Future
Technology corner, through which we propose the future that SMK envisions; the EcoTechnology corner, atwhich we introduced environmentally friendly products and technologies; and the High-Speed and HighFrequency Device corner, at which we introduced high-speed communications and high frequency
technologies. Many demonstrations were conducted so visitors could experience the ease of use of our
products, and we in turn received high evaluations.

Demonstration of a speech recognition remote control
Operation through verbal expressions is madepossible.

Demonstration through video image and narration at
the Future Technology corner

3D Touch Sensor

Lightweight andodd-shaped touch
sensor for
automotives with thepotential fordifferentiation indesignTouch panel that can be operated without
touching the screens, as introduced in World
Business Satellite by TV Tokyo

5 SEMI ANNUAL REPORT 2012

Global Network

Sales Oﬃce
Works
Works & Oﬃce
R&D Locations

Head Oﬃce（Tokyo）

ASIA

EUROPESMK High-Tech Taiwan Trading Co., Ltd.

SMK Europe N.V.

SMK Electronics（H.K.）Ltd.

SMK Europe N.V., U.K. Branch

SMK Trading（H.K.）Ltd.

SMK Europe N.V., France Branch

SMK Electronics（Dongguan）Co., Ltd.

SMK Europe N.V., Munich Office

SMK Electronics（Shenzhen）Co., Ltd.

SMK Europe N.V., Dusseldorf Branch

SMK Electronics（Shenzhen）Co., Ltd. Futian Office

SMK Hungary Kft.

SMK Electronics（Shenzhen）Co., Ltd. Xi’an Office
SMK Electronics（Shenzhen）Co., Ltd. Chongqing Office

NORTH AMERICASMK Electronics Technology Development（Shenzhen）Co., Ltd.

SMK Electronics Corporation U.S.A.

SMK Electronics Trading（Shanghai）Co., Ltd.

SMK Electronics Corporation U.S.A., San Jose Office

SMK Electronics INT’
L Trading（Shanghai）Co., Ltd.

SMK Electronics Corporation U.S.A., East Office

SMK Electronics INT’
L Trading（Shanghai）Co., Ltd. Beijing Office

SMK Electronics Corporation U.S.A., Los Angeles Office

SMK Electronics INT’
L Trading（Shanghai）Co., Ltd. Qingdao Office

SMK Electronics Corporation U.S.A., Seattle Office

SMK Electronics Singapore Pte. Ltd.

SMK Electronics Corporation U.S.A., Chicago Office

SMK Electronics（Malaysia）Sdn. Bhd.

SMK Electronics Corporation U.S.A., Detroit Office

SMK Electronics（Phils.）Corporation

SMK-Link Electronics Corporation

SMK Korea Co., Ltd.

SMK-Link Electronics Corporation, Milpitas Office
SMK Manufacturing, Inc.
SMK Electronica S.A. de C.V.
SMK Mexicana S de RL de C.V.
SMK Mexicana S de RL de C.V. Mexico City Office
SEMI ANNUAL REPORT 2012 6

Consolidated Balance Sheets
SMK Corporation and Consolidated Subsidiaries
As of September 30

Thousands of
U.S. dollars

Millions of yen

AssetsMillions of yen
As of March 31

2011

2012

2012

¥ 6,695¥ 7,903$ 101,839¥ 8,390

115

58

751

83

15,305

14,159182,457

15,2232012

Current assets
Cash and cash equivalents
Time deposits
Notes and accounts receivable, trade
Allowance for doubtful accounts

（44）

（44）

（569）

（45）

Inventories

5,555

5,714

73,637

5,473

Deferred tax assets

949

ー

ー

1,149

Other current assets

2,668

3,771

48,595

3,213

31,24331,561

406,71033,486

2,101

1,713

22,071

2,212

91

131

1,696

102

Other investments

1,332

752

9,685

1,044

Allowance for doubtful accounts

（115）

（118）

（1,518）

（117）

3,409

2,478

31,934

3,241

Land

4,412

4,424

57,018

4,418

Buildings

17,003

17,161

221,148

17,242

Machinery and vehicles

16,687

17,087220,197

16,975Tooling and office furniture

21,032

20,896269,274

20,716

68

122

1,571

19

59,202

59,690769,208

59,370Investments and long-term loans
Investment securities
Long-term loans receivable

Property, plant and equipment

Construction in progress（43,204） （43,628） （562,222）（43,171）

15,99816,062206,986

16,199Deferred tax assets

490

246

3,181

567

Intangible assets

471

280

3,608

390

961

526

6,789

957

¥ 51,611¥ 50,627$ 652,419¥ 53,883

Less-accumulated depreciation

Other assets

Total assets

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥77.60 = U.S. $1.00.

7 SEMI ANNUAL REPORT 2012

Thousands of
U.S. dollars

Millions of yen

Liabilities and net assets

Millions of yen
As of March 31

2011

2012

2012

¥ 8,427¥ 9,121$ 117,539¥ 9,675

3,377

3,111

40,094

3,283

Accrued income taxes

219

89

1,146

94

Accrued bonus

575

633

8,162

630

Accounts payable, non-trade

6,926

6,498

83,740

7,517

Other current liabilities

1,424

1,275

16,425

1,357

20,94820,727

267,106

22,556

1,966

4,213

54,285

2,483

Accrued employees' retirement benefits

17

17

217

21

Accrued directors' and officers' retirement benefits

133

122

1,573

119

Other long-term liabilities

481

391

5,042

447

2,597

4,743

61,1173,070

Issued and outstanding : 79,000,000 shares

7,996

7,996

103,052

7,996

Capital surplus

12,353

12,345

159,091

12,345Retained earnings

14,994

12,571

161,991

14,785

Treasury stock（3,384）（3,697）（47,643）（3,554）

31,95929,215

376,491

31,572（204）（2,630）147（4,075）（3,909）（50,379）（3,499）（4,029）（4,113）（53,009）（3,352）2012

Current liabilities
Short-term loans payable
Notes and accounts payable, tradeLong-term liabilities
Long-term debt

Net assets
Shareholders’equity
Common stock

Authorized :195,961,274 shares

Accumulated other comprehensive income
Net unrealized gains (losses) on other securities
Foreign currency translation adjustments
Subscription rights to shares
Minority interests

Total liabilities and net assets

46

131

55

714

32

5

ー

ー

5

28,06625,157324,196

28,257¥ 51,611¥ 50,627$ 652,419¥ 53,883

SEMI ANNUAL REPORT 2012 8

Consolidated Statements of Income
SMK Corporation and Consolidated Subsidiaries
Six months ended September 30

Thousands of
U.S. dollars

Millions of yen
2012

2011

Net sales
Cost of sales
Selling, general and administrative expenses
Operating income（loss）
Other income		Interest and dividend income
Rent income
Gain on sales of fixed assets
Other
Total other income

Other expenses		Interest expense
Rent expense
Foreign exchange loss, net
Loss on disposal of fixed assets
Loss on valuation of investment securities
Other
Total other expenses

Income (loss) before income taxes and minority interests
Income taxes :Current
DeferredIncome（loss）before minority interests
Minority interests
Net income¥ 28,515
24,5743,983（42）¥ 26,829
22,981
4,175（327）

As of March 31

2012$ 345,744
296,152
53,807（4,215）¥ 55,340
48,564
7,942（1,166）

35
315
26
113
489

40
342
28
120
530

512
4,406
357
1,546
6,821

67
590
45
468
1,170

71
141
684
24
ー
182
1,102

66
140
697
50
67
79
1,099

849
1,804
8,978
649
859
1,020
14,159

152
309
246
35
ー
239
981

（655）

（896）

（11,553）

（977）

138
161
（204）
730
（589）
（1,787）
1（5）¥ （590） ¥（1,782）

2,076
9,407
（23,036）（70）$（22,966）

263
（441）
（799）
0
¥ （799）Yen

Per share data
Net income (loss):
Basic

2012

Millions of yen¥（8.10）U.S. dollars¥（24.83）$（0.32）

Yen¥（11.04）

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥77.60 = U.S. $1.00.			

Consolidated Statements of Comprehensive Income
SMK Corporation and Consolidated Subsidiaries
Six months ended September 30

Millions of yen
2011

Income（loss）before minority interests
Other comprehensive income
Net unrealized gains（losses）on other securities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income

Total comprehensive income attributable to:Shareholders of the Company
Minority interests

9 SEMI ANNUAL REPORT 20122012

Thousands of
U.S. dollars
2012

Millions of yen
As of March 31

2012¥（589）¥（1,787）$（23,036）¥（799）

（220）
（626）
（846）
（1,435）

（351）
（410）
（761）
（2,548）（4,524）（5,284）（9,808）（32,844）

（119）
（50）
（169）
（968）

（1,436）
1（2,543）（5）（32,774）
(70）

（968）
0

Consolidated Statements of Cash FlowsSMK Corporation and Consolidated Subsidiaries
Six months ended September 30

Millions of yen
2011

Cash flows from operating activities
Income（loss）before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Increase（decrease）in accrued employees' retirement benefits
Increase (decrease) in prepaid pension costs
Increase (decrease) in accrued directors' and officers' retirement benefits
Interest and dividend income
Interest expense

Loss on disposal of fixed assets(Increase) decrease in notes and accounts receivable, trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable, trade
Increase (decrease) in accounts payable, non-trade
Other

SubtotalInterest and dividends received
Interest paid
Compensation of products paid
Income taxes paid

Income taxes refunded
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 sale of fixed assets
Purchases of intangible fixed assets

Proceeds from sale of investment securities

Payments for execution of loans
Collection of loans receivable
Other

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 sale of treasury stock
Dividends paid
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
Cash and cash equivalents at end of six months and the year

2012

Thousands of
U.S. dollars

Millions of yen
As of March 31

2012

2012

¥ （655）
1,635
93
2
260
7
（35）
71
24
(1,360）
（189）
1,124
（555）
(45）
377
25
（70）
―
（373）
203
162

¥ （896）
1,561
81
（4）
276
4
（40）
66
50
311
（464）
746
（747）
106
1,050
28
(66）
―
（150）
10
872

$（11,553）
20,116
1,043
（49）
3,558
45
（512）
849
649
4,014
（5,980）9,619（9,632）
1,370
13,537357（855）―（1,929）123
11,233¥ （977)
3,664
184
6
522
（7）
（67）
152
35
（339）
196
（166）
（121）
（330）
2,752
68
（147）
（246）
（644）
218
2,001

(100）
41
（1,930）
83
（19）
0
（15）
21
32
（1,887）（8）
29（1,957）
84
（9）
―
（49）
45
5
（1,860）（100）
373（25,218）
1,086
（110）
―
（632）
574
70
（23,957）（138）
118（3,926）
130
（31）
87
（145）
112
29
（3,764）

1,693
―
（190）
（75）
0
（291）
1,137
（100）
（688）
7,383
¥ 6,695

1,400
2,400
（2,579）
（141）
0
（429）
651
（150）
（487）
8,390
¥ 7,903

18,04230,928（33,228）（1,823）0（5,533）
8,386（1,939）（6,277）108,116$ 101,839

3,261
816
（840）
（262）
3
（292）
2,686
84
1,007
7,383
¥ 8,390

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥77.60 = U.S. $1.00.

SEMI ANNUAL REPORT 2012 10

Corporate Information(As of September 30, 2012)

Corporate Data

Shares and Shareholders

Name

SMK Corporation

Total number of Authorized shares

195,961,274

Established

January 15, 1929

Total number of Issued shares

79,000,000

Primary business

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

Number of shareholders
Major shareholders (top ten)

10,700Shares owned(1,000 shares)

Percentageof shares (%)

Capital￥7,996,828,021

Nippon Life Insurance Company

3,601

5.04

Stock exchange listing

Tokyo Stock Exchange

Mizuho Corporate Bank, Ltd.

3,562

4.99

Administrator ofshareholders register

Mitsubishi UFJ Trust andBanking Corporation

Dai Nippon Printing Co., Ltd.

3,200

4.48

Independent auditors

Ernst & Young ShinNihon LLC
Tokyo, JapanSMK Cooperating Company Share
Holding Association

2,952

4.13

Employees（SMK-Group）

7,660

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,508

3.51

Head office5-5, Togoshi 6-chome,
Shinagawa-ku,
Tokyo 142-8511, Japan
TEL : 81-3-3785-1111
FAX : 81-3-3785-1878

Mitsubishi UFJ Trust and Banking
Corporation

1,937

2.71

SMK Employees Share Holding
Association

1,924

2.69

Japan Trustee Services Bank, Ltd.
(Trust Account)

1,666

2.33

The Showa Ikeda Memorial Foundation

1,500

2.10

Terutaka Ikeda

1,466

2.05

Subsidiaries & affiliates
Domestic

Subsidiaries - 5companies
Affiliates -Overseas
Website1companies

Subsidiaries - 22companies
http://www.smk.co.jp/

Note: SMK holds 7,618 thousand shares of treasury stock, but theseare excluded from the above list. Figures for percentage ofshares are calculated excluding the treasury stock.

Board of Directors and Corporate Auditors
Directors

Corporate Executive Officers

Chairman and CEO

Tetsuya Nakamura

President and COO

Yasumitsu Ikeda

Director,
Executive Deputy President, Chief Information Officer Yoshio Sakurai
Director,
Executive Vice President, Chief Technology Officer Yoshiyuki Kaku

Yuji Tanahashi

Director

Auditors

Executive Vice President

Paul Evans

Executive Vice President

Mikio Wakabayashi

Executive Vice President, Chief Financial Officer

Kohei Ohgaki

Vice President

Hideo Matsumoto

Vice President

Tsutomu Isoda

Vice President

Hiroshi Miyakawa

Vice President

Shigechika Yanagi

Auditor and Chairman of Auditors Meeting

Terutaka Ikeda

AuditorHajime Yamada

AuditorKouichiro Sugihara

Vice President

Takemi Ishibashi

AuditorNaru Nakashima

Vice President

Harutaka Seki

5-5, Togoshi 6-chome, Shinagawa-ku, Tokyo 142-8511, JAPAN
Telephone: 81-3-3785-1111 Fax: 81-3-3785-1878

http://www.smk.co.jp/