2010
ANNUAL REPORTFor the fiscal year ended March 31, 2010
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/

Printed in Japan

Financial Highlights“Value Improvement and
New Challenges”— We have to change to remain the same —Percent change
2009/2010

Millions of yen

Thousands of
U.S. dollars

2009

2010

2010

¥ 72,742¥ 64,371(11.5)%$ 691,864

238(1,620)

2,479

938.8

26,647

1,862—

20,013¥ 58,168¥ 56,113(3.5)%$ 603,111

29,07931,127

7.0

334,559

Operating Results
Net sales
Operating income
Net income (loss)● SMK Philosophy

Audio-Visual
Home
Electronics

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

Car Electronics

Financial Position
Total assets
Total net assets

Yen

U.S. dollars

Per Share Data
Net income (loss)Basic¥ (21.68)¥ 25.19

Diluted——Cash dividends

9.00

8.00

—%

$ 0.27—(11.1)—
0.09

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥93.04 = U.S. $1.00.

Information

Communication
Net sales

Operating income

Net income (loss)

Millions of yen

Millions of yen

Millions of yen

90,0006,000

87,65979,074
71,86072,74264,37160,000

5,000

5,654
5,166

4,000

3,473 3,693

4,290

2,500

● Action Guidelines

C o nt ent s
Financial Highlights
To Our Shareholders and Investors
Sales and Market Overview
SMK’s NEW LINEUPTOPICS
Global Network
Financial Section
Five-Year Summary
Financial Review
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors
Shares and Shareholders
Board of Directors and Corporate Auditors
Corporate Data

1

2
3
5
7
9
12
13
13
14
15
17
18
19
20
27
28
29
30

1. Contribute to society with pride and confidence.
2. Be customer-oriented, with zeal and sincerity.
3. Challenge courageously for higher goals without fear of failure.
4. Trust and respect each other for a brighter working atmosphere.
5. Keep an open mind, and view SMK from a global perspective.

2,094

1,862

2,479
30,0000238

02006 2007 2008 2009 2010

Total assets/Total net assets
Total assets
Total net assets

Millions of yen

75,000Cash dividends per share

Yen

Yen

15

30

29,079 31,127

2006 2007 2008 2009 2010

27.32

25.19

10

10.00

9.00

8.00

5

0

(30)

0

14.00 14.00

44.33 47.48

58,168 56,113

32,736 34,564 32,386

2006 2007 2008 2009 2010

Basic net income (loss) per share

65,575 66,737

50,000(1,620)(2,500)2006 2007 2008 2009 2010

60

61,34425,0000

2,000(21.68)2006 2007 2008 2009 2010

0

2006 2007 2008 2009 20102

To Our Shareholders and Investors

Tetsuya Nakamura
President and Chief Operating Officer

3

Overview

Value Improvement and
New Challenges

Environmental Initiatives

Although the global economy is still feeling thelingering effects of the worldwide recession
triggered by the Lehman Brothers crisis, there has
been sustained underlying economic growth inChina and other emerging nations, with theworld’s major economies also beginning to show
signs of a turnaround as the downturn finally
starts bottoming out.
In spite of negative factors such as the current
problems in Greece and a general sense of
uncertainty regarding the future, there is an overall
air of recovery within the Japanese economy too,with an increase of corporate profits backed bybooming overseas demand from the likes ofChina and the government’s stimulus package
also creating an impact.
The electronics industry is experiencing a
gradual recovery on the whole, helped along
primarily by components for digital appliancessuch as flat-panel televisions and automotive
components.
In terms of consolidated sales and profits, thefact that the market is still in recovery from theworldwide recession resulted in a year-on-year
decline in sales for the term under review, despite
our best efforts to actively launch new products.
On the profit front meanwhile, we successfully
managed to increase profits year on year thanks
to initiatives such as reviewing cost structure,
resulting in improved profitability.
We will continue improving our productdevelopment capabilities in line with market
trends in the future, as well as increasing
production capacity and expanding our sales
network. We will also continue working for
more efficient operation through management
streamlining and for fundamental strengtheningof our operations. In this way, we are committed
to making every effort to achieve further
improvements in sales and profits.

— We have to change to remain the same —We at SMK regard coexistence with the global
environment as a corporate duty and havepositioned it as a key management objective. We
will continue tackling the reduction ofgreenhouse gas emissions in order to help prevent
global warming and intend to further reinforce
compliance with environmental legislation theworld over.
We also intend to actively implement
initiatives such as promoting and expanding
environmentally conscious design concepts anddeveloping new lines of business in theenvironmental, energy and health sectors.
Although market conditions are likely toremain unpredictable for the time being, we
intend to capitalize on the current climate as anopportunity to make changes and will make every
possible effort to enhance our corporate value
and increase profits.
We look forward to the continuing support ofour shareholders as we pursue these goals.

With a continuing focus on three key
management objectives over the coming fiscal
year, “enhancement of SMK brand power,”“quality improvement (Zero Defects)” and“another challenge in product creation,” we arecommitted to comprehensively eliminating loss
in all of its forms and actively investing in thedevelopment of technologies and products forthe future.
Within the global market, there is growing
demand for inexpensive products that can still
offer a reasonable level of quality. By “cutting
costs without affecting quality,” we intend toestablish a framework that is capable ofresponding to such paradigm shifts in the market.
Our slogan for fiscal 2010 is “Value
Improvement and New Challenges —We have tochange to remain the same.” Encapsulating ourstrong desire to make changes, this slogan isbased on the principle that enhancing value asindividual employees will enhance the value ofthe company and the belief that we need to bebold in order to adapt to changes in the global
market, including the possibility of establishing a
new business model. With this slogan in mind,
we are fully committed to working as a team tomold SMK into a value-creating company thatwill continue growing.

June 2010

Tetsuya Nakamura
President and Chief Operating Officer

4Sales and Market Overview(April 1, 2009 to March 31, 2010)(Year ended March 31)

Net Sales (Millions of yen)
2007

Audio-Visual

2008

2009

2010

30,00025,262

26,75522,04431.7%

20,00020,401

10,000

Audio-visual parts
20,401 million yen

HDMI Standard Type A receptacle

Car Electronics

0
8,000

7,424

7,242

6,815
6,077

6,000

11.2%
4,000

2,000
“Force-feedback” touch panels

Electronic instruments
7,242 million yen

Communication

0

30,00030,32530,20738.3%

24,62520,00010,000Communications parts
24,625 million yen

Stereo earphone-microphone and Bluetooth unit

Information

12,000

11.8%

8,897

8,000

7,681

7,592

4,000

xD-4 in1 card connectors

Information, office equipment parts
7,592 million yen

Home Electronics

010,000

8,611
7,500

7.0%
5,000

2,500

Electronic toys, home electronics and other parts
4,509 million yen

Despite an increase in sales in the smart-phone sector, revolving primarily
around connectors, switches and touch panels, overall sales were down
due to a slump in sales to overseas cellular phone manufacturers. We
intend to actively develop products in line with new market demand in
the future, keeping a close eye on the emerging next-generation wirelesscommunication market, in order to secure new business.

0

9,661

5

After a prolonged slump since fall 2008, demand for components has
started to pick up again thanks to vehicle sales stimulus measures theworld over, with sales of touch panels for car navigation systems also on
the increase. In the domestic market meanwhile, sales of vehicle-mounted
connectors for electronic toll collection (ETC) systems have also remained
strong. We will continue to develop products such as operating systemcomponents and vehicle-mounted connectors and intend to increase thespeed with which we respond to our customers’ needs in the future.

40,00035,969DS-SS modulation/demodulation engine for PLC

In spite of a contribution from remote control sales thanks to continuing
strong demand for flat-panel televisions, overseas demand for audio
equipment components remained sluggish due to the impact ofworsening market conditions, compounded by declining sales in thedigital camera and video camera sector. With a focus on networking
audio-visual equipment, in the future we intend to actively develop
products for flat-panel televisions and set-top boxes.

0

7,009

6,732
4,509

In spite of continuing healthy demand for components within thecomputer market since the second half of fiscal 2010 and a strong
contribution from sales of new printer components, sales to business
users were down, including products such as projectors and copiers. We
intend to develop products with the aim of preempting market demandin the future, including expanding our touch panel operations in light ofgrowing demand and developing components for the next-generation
data transmission market.
Despite a contribution from sales of components for air purifiers for the
first time, market conditions had a negative impact on demand forremote controls for home electric appliances such as air conditioners andlighting equipment and components for games consoles. We are in theprocess of developing products for the new energy sector and the LED
lighting market, including photovoltaic power generation systems andfuel cells, and intend to expand operations within the environmental
business market in the future.
6

SMK’s NEW LINEUP

7

Product range expanded for photovoltaic module connectors
for the photovoltaic power generation system market

Two-Step Input Force Feedback Touch Panels

As a clean source of energy with minimal environmental
impact, photovoltaic power generation systems have been
attracting a great deal of attention in recent years, a trend
echoed by growing demand. Systems consist of multiple
photovoltaic modules (solar panels), which are connectedusing cables. It is at this point that relay connectors are used toconnect cables to one another.
We have been focusing on this market for some time now
and have developed and released various types of photovoltaic
module connectors, all of which have proved very popular.
Our products have a unique waterproof structure that makes it
easy to waterproof cables and offer excellent workability andall-round waterproof performance. Having obtained
certification in accordance with TÜV standards in Germany
and UL standards in the US, our connectors are compatible
with markets in both Europe and the US. Being IP67
compliant, our products ensure safety and waterproof
performance.
We have recently expanded our range of products with thedevelopment of a new compact connector. We will continue tocater to demand within this market, which is expected to keepon growing in the future, and to develop more environmentallyfriendly products.

We have developed and started to take orders for a
resistance-sensing two-step input force feedback touch
panel (FFB-TP).
We have been shipping standard FFB-TP and receiving
many positive inquiries for the reason that it directly gives
tactile feeling to users’ fingertips.
We developed the new two-step input FFB-TP to makeusability further better. The tow-step system makes it
possible to operate buttons for two different purposes
simply by changing the inputting force with which thetouch panel is pressed.
In order to make the most of this new technology, we
have prepared an application software called Dokodemo
Touch which displays a main menu button when the user
touches any place on the screen. This enables users toaccess operations without looking, a feature that combineswith force feedback capabilities to make operations eveneasier.
Introduction of Two Step Input FFB-TP to the market,
touch panel operation is expected to be much easier
Human-Machine Interface (HMI).

Photovoltaic module connectors
Application:
Photovoltaic power generation systems

Two-Step Input Force Feedback Touch Panel
Application:
Car navigation systems

Industry’s thinnest capacitive switch developed

Mobile WiMAX™ USB dongle technology
developed

We have developed a capacitive switch that is the thinnest
analog pointing device in the industry.
The growing popularity of cellular phones in recent
years, especially smart-phones, has sent demand for analogoperated switches soaring. We developed our capacitive
switch to cater to such demand. In addition to being
analog-operated, this new product also has a switch heightof just 1.0mm, the industry’s thinnest, which will help
meet current demand for increasingly slim cellular phones.
The analog-operated section of the switch can be
operated from any angle through 360˚, just like a mouse on
a computer. It can also recognize pushing force in the Z
direction as well as the simple X and Y directions, making
it possible to change speed. This means that the switch canbe used for purposes such as controlling the cursor on amap or analog controls within a game. The centrally
mounted metal dome switch meanwhile enables the user toeasily select options just using their thumb.
In addition to switches, we also have a low power
consumption IC, to convert from analog to digital, available
as a standard product.

Working in partnership with Fujitsu Semiconductor
Limited (Head Office: Shin-Yokohama, Kohoku Ward,
Yokohama), we have developed USB dongle technology formobile WiMAX™, which is attracting a great deal ofattention as a means of next-generation wirelesscommunication.
Mobile WiMAX™ is a next-generation wirelessbroadband technology that is capable of higher speed data
communication than current 3G cellular phones. As it alsooffers better quality communication than existing wireless
LAN technology and enables services over a wider area,a range of new markets and services are expected to emerge.
The key features of this newly developed mobile
WiMAX™ USB dongle are (1) coverage of frequency
bands over a wide area, (2) a wide-area transmission rangeof 1-3km and (3) a maximum transmission speed of
40Mbps. Using MIMO technology to transmit and receive
data via multiple antennas, it even enables communication
when traveling at high speeds in excess of 60km/h.
We are committed to commercialization and intend topromote the development and sale of products compatible
with a diverse range of WiMAX™ services in order toexpand our operations.

Capacitive switch
Applications:
Cellular phones, digital still cameras (DSC)

Mobile WiMAX™ USB dongle
Application:
Laptop computers, etc.

8

TOPICS
SMK targeting the car electronics market

Crystal Lipstick Mouse™ launched

The technology contained in each car can be broken down into four main categories: safety,

Launched in December 2009 as an SMK branded product for consumer use, the Crystal Lipstickconnectivity, comfort and the environment. In order to meet demand in these areas, auto

Mouse™ is a lightweight, compact and highly portable wireless mouse that is ideal for use in

manufacturers are increasingly switching to electronic and computerized technology.

limited spaces. Having been picked up by the media, including magazine and TV coverage, it is

Our response to such demand here at SMK revolves around a range of product-based solutions,attracting a great deal of attention.

such as those outlined below.
Features
Comfort

SafetyTouch panels(key device in human-machine interface (HMI))

CamerasModules

Remote controls
Various switches

Stylish lipstick design

Connectivity

Bluetooth® modules(wireless connectivity withvarious information devices)

SMK’s
car electronics
solutions

WiMAX™ modules(permanent internet connection)

Ideal for use in limited spaces(1) Lightweight, compact and highly portable,
ideal for use in limited spaces(2) Unique lipstick design(3) Stylish mouse decorated with
CRYSTALLIZED™ Swarovski Elements(4) Rechargeable system that can be used without
batteries(5) 2.4GHz wireless system to enable stablecommunication

Environment

Various connectors(saving energy, reducing weight,
electric vehicles)

Various connectors(connections between various units and external/internal sources)

Exhibited at FPD International 2009
We organized an SMK exhibit at FPD International 2009, a comprehensive exhibition of flatpanel displays and manufacturing equipment, components and materials that took place at
Pacifico Yokohama over the course of three days from October 28 to 30, 2009.

International Automotive Electronics Technology Expo
We organized an SMK exhibit at the International Automotive Electronics Technology
Expo at Tokyo Big Sight, which took place over the course of three days from January 20
to 22, 2010. Taking place for only the second time, the event is a specialist technology
exhibition designed to showcase automotive electronics technology under one roof.
We exhibited a number of our core car electronics products as part of the Electronic
Components & Devices Zone, including force feedback touch panels, connectors andmodules for vehicle-mounted cameras and antenna connectors.
As a new venture at this year’s event, we also set up a solution section within the SMK
booth in order to introduce potential clients to our development solutions, all of which
went down very well. With a 30% increase in both the number of visitors to the SMK
booth and the number of negotiations initiated compared to the previous year, we
successfully managed to showcase our products and technical capabilities to a large
number of visitors.

9

We showcased a number of industry-leading new products within the SMK booth, revolving
primarily around a demonstration
area that enabled visitors to actually
touch products such as our vehiclemounted specification capacitive
touch panels and force feedback
touch panels, which produce
a “click” sensation when touched.
Our Two-Step Input ForceFeedback Touch Panels inparticular proved to be a big hit,
attracting a great deal ofattention.

10

TOPICS

Global Network

Construction underway on new factory building in the Philippines
Demand for touch panels has risen in recent years on a global scale. This is because an increasing

Sales Office
Works
Works & Office

percentage of compact and medium-sized mobile devices, such as cellular phones, digital cameras,
portable games consoles, electronic dictionaries, e-books and laptops, all of which are produced on
a comparatively large scale, are being equipped with touch panels. This trend is likely to become
even more pronounced in the future. There is also strong demand for car navigation systems, theHead Office(Tokyo)traditional market for touch panels, not least in Europe and China.
We were quick to develop and start manufacturing projected capacitive touch panels for cellular
phones at our Philippines Factory, and the resulting products are performing well in the market.
In order to increase production of touch panels for devices such as cellular phones and overseas car
navigation systems, in March 2010 we started construction of a new factory building in the Philippines.
Located on the same site as our Philippines Factory and with a total floor area of 8,400m2, the
new factory building is scheduled to be completed and up and running by October 2010.
The site’s production capacity after

Dongguan, China SMK Dongguan Gaobu Factory

operations get underway will be 1.5
million panels per month, an increaseof 50% on current levels. We intend
to use the extra items that can beproduced flexibly in line withdemand trends in the future.
Conceptual drawing of the Philippines Factory after the extension(new building on right, from center)

New US office established in Detroit
On April 1, 2010, we established SMK Electronics Corporation USA, Detroit Office and started

Mingyi Ri, General Manager,
Production Department II

SMK Dongguan Gaobu Factory operates
in the city of Dongguan, situatedapproximately 50km east of Guangzhou
in the rapidly developing Chinese
province of Guangdong.
The factory manufactures items suchas dies and automatic assembly testing
systems and handles every stage of the
production process in-house, frommanufacturing components through tofinished products. By playing to its
strengths, SMK Dongguan Gaobu
Factory continues to expand as one of
the SMK Group’s core production bases.

operations in the US city of Detroit. Operating as a small office (SOHO), the new office will
gather information on the latest trends in the auto industry, not only in the US but also in
Europe, China and other key markets around the world, and share it with our clients, along withthe latest updates on SMK technology. Run by highly experienced Japanese and local staff, theoffice will help expand SMK’s automotive businessby providing more precise services out of Detroit
and responding quickly to customer demand within
the automotive industry. This will enable us to stepup our efforts to target the global automotive

ASIA
SMK High-Tech Taiwan Trading Co., Ltd.
SMK Electronics (H.K.) Ltd.
SMK Trading (H.K.) Ltd.
SMK Dongguan Gaobu Factory
SMK Electronics (Shenzhen) Co., Ltd.
SMK Electronics Technology Development (Shenzhen) Co., Ltd.
SMK Electronics Trading (Shanghai) Co., Ltd.
SMK Electronics Trading (Shanghai) Co., Ltd. Beijing Office
SMK Electronics Int’l Trading (Shanghai) Co., Ltd.
SMK Electronics Singapore Pte. Ltd.
SMK Electronics (Malaysia) Sdn. Bhd.
SMK Electronics (Phils.) Corporation
SMK Korea Co., Ltd.

EUROPESMK Europe N.V.
SMK Europe N.V., U.K. Branch
SMK Europe N.V., France Branch
SMK Europe N.V., Munich Office
SMK Europe N.V., Dortmund Office
SMK (U.K.) Ltd.
SMK Hungary Kft.
SMK Corporation Helsinki Office

NORTH AMERICASMK Electronics Corporation U.S.A.
SMK-Link Electronics Corporation
SMK Electronics Corporation U.S.A., East Office
SMK Electronics Corporation U.S.A., San Jose Office
SMK Electronics Corporation U.S.A., Los Angeles Office
SMK Electronics Corporation U.S.A., Seattle Office
SMK Electronics Corporation U.S.A., Chicago Office
SMK Electronics Corporation U.S.A., Detroit Office
SMK Mexicana S.R.L. de C.V.
SMK Mexicana S.R.L. de C.V., Mexico City Office
SMK Manufacturing, Inc.
SMK Electronica S.A. de C.V.

market, which is expected to grow over the medium
to long term.

11

12Financial Section

Financial Review
SMK’s net sales for fiscal 2010, which ended March 31,
2010, decreased 11.5% year on year, to ¥64,371
million (US$691,864 thousand). Operating income rose
938.8% year on year, to ¥2,479 million (US$26,647
thousand) with net income of ¥1,862 million(US$20,013 thousand).

Five-Year Summary

Thousands of
U.S. dollars

Millions of yen

2006

2007

2008

2009

2010

36,00034,56432,736¥ 79,074¥ 87,659¥ 72,742¥ 64,371$ 691,864

Operating income

4,290

5,166

5,654

238

2,479

26,647

Net income (loss)

3,473

3,693

2,094

(1,620)1,862

20,01331,127
29,07928,000Net sales recovered moderately for components for flat-panel televisions
24,000of fiscal 2009. As a result, net sales were ¥64,371 million (US$691,864¥ 61,344¥ 65,575¥ 66,737¥ 58,168¥ 56,113$ 603,111

32,73634,56432,38629,07931,127

334,559

Total net assets

Yen

U.S. dollars

02006 2007 2008 2009 2010

thousand), down 11.5% year on year.

(As of March 31)

Operating Income
As a result of the efforts to restore profitability by introducing new

Financial Position

products, reducing costs, and cutting fixed costs in the face of a decline

Return on equity (ROE)%in operating income attributable to lower net sales, operating income was20¥2,479 million (US$26,647 thousand), rising 938.8% from the level ofthe previous fiscal year.

11.5
10

Per Share Data
Total net assets

32,386the impact of the global economic recession that began in the second half
¥ 71,860

Total assets

Net Sales
and other digital home electronics and automobiles, after struggling with2010

Operating Results
Net sales

Millions of yen

32,000

Corporation and Consolidated Subsidiaries

Year ended and as of March 31

Total net assets¥ 416.04¥ 445.33¥ 427.75¥ 392.15¥ 420.07$ 4.51

6.3

Net Income
In spite of the generation of losses on foreign exchange resulting from the

Net income (loss)
Basic

44.33

47.48

27.32

(21.68)

25.19

0.27

Diluted

44.13

47.41

27.30

—

—

—

Cash dividends

10.00

14.00

14.00

9.00

8.00

0.09

11.0
6.2

0

appreciation of the yen, net income was ¥1,862 million (US$20,013
thousand) due to a fall in the loss on the valuation of investment

(5.3)

(10)

securities from the previous fiscal year.

2006 2007 2008 2009 2010
(Year ended March 31)

Total Net Assets/ROE
As of March 31, 2010, total net assets were ¥31,127 million(US$334,559 thousand). ROE stood at 6.2%.

Return on assets (ROA)%

Total Assets/ROA

12

As of March 31, 2010, total assets were ¥56,113 million (US$603,111
thousand). ROA stood at 3.3%.
6

C o nt ent s
Five-Year Summary
Financial Review
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors

13

Net cash flow from operating activities amounted to ¥9,004 million

5.8
3.3

3.2

Cash Flows
13
14
15
17
18
19
20
27

5.8

0

(US$96,775 thousand), net cash used in investing activities totaled¥2,481 million (US$26,661 thousand) and net cash used in financing
activities was valued at ¥6,742 million (US$72,462 thousand).

(2.6)
(6)

2006 2007 2008 2009 2010
(Year ended March 31)

14Consolidated Balance Sheets
Corporation and Consolidated Subsidiaries
As of March 31, 2010 and 2009

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

Assets

2009

2010

2010

Time deposits (Note 16)
Notes and accounts receivable, trade (Note 16)
Allowance for doubtful accounts
Inventories (Note 3)
Deferred tax assets (Note 8)
Other current assets

Liabilities and net assets

2009

2010

2010

Current liabilities

Current assets
Cash and cash equivalents (Note 16)

Thousands of
U.S. dollars(Note 2)Millions of yen¥ 9,072¥ 8,749$ 94,0379994

14,864

16,337

175,592

(77)

(61)

(653)

6,235

5,241

56,333555

1,303

14,001

3,645

2,402

25,81634,30333,980365,220

Short-term loans payable (Notes 4 and 16)

4,406$ 47,360

2,689

3,402

36,567

Accrued income taxes

49

197

2,123

Accrued bonus

592

828

8,896

Accrued directors’ bonus

—

35

371

Accounts payable, non trade (Note 16)

6,502

7,440

79,965

Other current liabilities

1,450

1,325

14,24021,81017,633

189,522

6,366

6,560

70,505

Notes and accounts payable, trade (Note 16)¥ 10,528¥

Long-term liabilities
Investments and long-term loans
Investment securities (Notes 12 and 16)

Long-term debt (Notes 4 and 16)
1,947

2,863

30,772

Accrued employees’ retirement benefits (Note 13)

13

16

173

Long-term loans receivable

876

247

2,655

Accrued directors’ and officers’ retirement benefits

391

153

1,642

Other investments (Note 13)

1,880

1,659

17,835

Other long-term liabilities (Note 8)

509

624

6,710

Allowance for doubtful accounts

(259)

(232)

(2,498)

7,279

7,353

79,030

4,444

4,537

48,764

7,996

7,996

85,951

Capital surplus

12,34812,353

132,773

Retained earnings

13,961

15,798

169,802

Treasury stock (Note 11)(2,873)(2,953)(31,744)

31,43233,194

356,782

(29)

499

5,364

(2,393)(2,687)(28,879)(2,422)(2,188)(23,515)

Net assets
Shareholders’ equity (Note 9)

Property, plant and equipment (Notes 4, 7 and 17)
Land

4,437

4,432

47,635

Common stock

Buildings

16,512

16,906

181,707

Authorized:

Machinery and vehicles

18,032

18,627200,214Issued and outstanding: 79,000,000 shares

Tooling and office furniture

24,794

25,116

269,948

6

10

107

63,78165,091

699,611(45,760)(48,158)(517,609)

18,021

16,933

182,002

Construction in progressLess-accumulated depreciation

195,961,274 shares

Valuation, translation adjustments and otherNet unrealized gains (losses) on other securities
Foreign currency translation adjustments

Other assets
Deferred tax assets (Note 8)

619

111

1,194

Subscription rights to shares

56

117

1,253

Intangible assets (Note 7)

781

552

5,931

Minority interests

13

4

39

1,400

663

7,125

29,07931,127

334,559¥ 58,168¥ 56,113$ 603,111¥ 58,168¥ 56,113$ 603,111

Total assets

Total liabilities and net assets

See accompanying notes to consolidated financial statements.

15

16

Consolidated Statements of Income

Consolidated Statements of Changes in Net Assets

Corporation and Consolidated Subsidiaries

Corporation and Consolidated Subsidiaries

Year ended March 31, 2010 and 2009

Year ended March 31, 2010 and 2009

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

2009

2010

2010

¥ 72,742¥ 64,371$ 691,864

Cost of sales (Notes 3 and 5)

63,65154,010580,499

Selling, general and administrative expenses (Notes 5 and 6)

8,853

7,882

84,718238

2,479

26,647

Interest and dividend income

170

72

772

Rent income

903

960

10,321

Foreign exchange gain, net

249

—

—

Gain on sales of fixed assets

69

91

977

Other

234

365

3,926

1,625

1,488

15,996

Interest expense

311

214

2,301

Rent expense

280

306

3,286

Foreign exchange loss, net

—

595

6,397

Loss on disposal of fixed assets

75

152

1,639

Loss on valuation of investment securities

1,681

1

9

Impairment loss of fixed assets (Note 7)

692

24

255

Other

166

601

6,460

3,205

1,893

20,347

Net sales

Operating income
Other income

Total other income
Other expenses

Total other expenses

Shareholders’ equity

Valuation, translation adjustments and otherForeign Total valuation,
Net unrealized
Number of
Total gains (losses) currency translation Subscription
shares of Common Capital Retained Treasury shareholders’rights to Minority Total net
on other translation adjustments
and otherstock surplus earnings
stock
common stock
equitysecurities adjustments
shares interests assets

Balance at March 31, 2008 79,000,000 ¥ 7,996 ¥ 12,370 ¥ 16,741 ¥ (2,264) ¥ 34,843 ¥ (161) ¥ (2,304) ¥ (2,465) ¥ —
(981)
(981)
—
Cash dividends paid
Decrease due to inclusion of
—
(179)
(179)
subsidiaries in consolidation(1,620)(1,620)—Net loss
(667)
(667)
—
Acquisition of treasury stock
(22)
58
36
—
Disposition of treasury stock
Items other than
(89)
—
132
43
56
shareholders’ equity, net
(
)
(
)
(
)
(
)
(
)
—
—
22
2,780
609
3,411
132
89
43
56
Total changes(29) (2,393) (2,422)
56
Balance at March 31, 2009 79,000,000 7,996 12,348 13,961 (2,873) 31,432
(222)
(222)
—
Cash dividends paid
Decrease due to exclusion of
197
197
—
subsidiaries from consolidation
1,862
1,862
—
Net income
(66)
(66)
—
Acquisition of treasury stock
5
10
15
—
Disposition of treasury stock
Change in treasury stock resulting
from change in equity in affiliates
(24)
(24)
—
accounted for by equity method
Items other than
(294)
—
528
234
61
shareholders’ equity, net
(
)
(
)
—
—
5
1,837
80
1,762
528
294
234
61
Total changes
(
)
(
)
(
)
Balance at March 31, 2010 79,000,000 ¥ 7,996 ¥ 12,353 ¥ 15,798 ¥ 2,953 ¥ 33,194 ¥ 499 ¥ 2,687 ¥ 2,188 ¥ 117¥

8 ¥ 32,386
(981)
(179)
(1,620)
(667)
36
5
5
13

104
(3,307)
29,079
(222)
197
1,862
(66)
15

(24)

¥

(9)
286
(9) 2,048
4 ¥ 31,127

Thousands of U.S. dollars (Note 2)

Income (loss) before income taxes and minority interests(1,342)

2,074

22,296

Shareholders’ equity

Income taxes (Note 8)
Current

(67)

561

6,029

Deferred

350

(349)

(3,746)

Minority interests

(5)

—

—

Net income (loss)¥ (1,620)¥ 1,862$ 20,013
U.S. dollars(Note 2)Yen

Per share data
Total net assets¥ 392.15¥ 420.07$

4.51

Net income (loss)
Basic(21.68)

25.19

0.27

Diluted

—

—

—

9.00

8.00

0.09

Cash dividends
See accompanying notes to consolidated financial statements.

17

Valuation, translation adjustments and otherForeign Total valuation,
Net unrealized
Total gains (losses) currency translation Subscription
Common Capital Retained Treasury shareholders’rights to Minority Total net
on other translation adjustments
and otherstock surplus earnings
stock
equitysecurities adjustments
shares interests assets

Balance at March 31, 2009
Cash dividends paid
Decrease due to exclusion ofsubsidiaries from consolidation
Net income
Acquisition of treasury stock
Disposition of treasury stock
Change in treasury stock resulting
from change in equity in affiliates
accounted for by equity method
Items other thanshareholders’ equity, net
Total changes
Balance at March 31, 2010

$ 85,951 $ 132,717 $ 150,054 $ (30,887) $ 337,835 $ (313) $ (25,714) $ (26,027) $ 599(2,388)(2,388)—2,123
20,01356$ 145 $ 312,552(2,388)

(712)
109

2,123
20,013
(712)
165

—
—
—
—

2,123
20,013
(712)
165

(254)

(254)

—

(254)

—
(857) 18,947—
56 19,748$ 85,951 $ 132,773 $ 169,802 $ (31,744) $ 356,782

5,677 (3,165) 2,512
654
5,677 (3,165) 2,512
654$ 5,364 $ (28,879) $ (23,515) $ 1,253(106) 3,060(106) 22,007$ 39 $ 334,559

See accompanying notes to consolidated financial statements.

18

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Corporation and Consolidated Subsidiaries

Corporation and Consolidated Subsidiaries

Year ended March 31

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

Cash flows from operating activities
Income (loss) before income taxes and minority interests
Depreciation and amortization
Impairment loss of fixed assets
Amortization of goodwil
Increase (decrease) in accrued directors’ bonus
Increase (decrease) in accrued employees’ retirement benefits
Increase (decrease) in prepaid pension costs
Increase (decrease) in accrued directors’ retirement benefits
Interest and dividend income
Interest expense
Loss on disposal of fixed assets
Loss on valuation of investment securities
Loss on liquidation of subsidiaries and affiliates
Loss on compensation of products(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
Subtotal
Receipts for interest and dividend income
Payments of interest expenses
Loss on compensation of products paid
Payments of income taxes
Refunds of income taxes
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from time deposits
Purchases of fixed assets
Proceeds from sale of fixed assets
Purchases of intangible fixed assets
Purchases of investment securities
Proceeds from sale of investment securities
Payment on loans receivable
Proceeds from 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
Redemption of bonds
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
Increase in cash and cash equivalents arising from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of the year
See accompanying notes to consolidated financial statements.

19

2009

2010

2010

¥ (1,342)
5,611
692
172
(83)
3
(852)
2
(170)
311
75
1,681
—
—
5,523
1,886
(1,686)(220)(1,389)10,214179(324)—(1,248)429
9,249¥ 2,074
4,021
24
159
34
(3)
210
(238)
(72)
214
152
1

73
(219)
(114)
(165)
578
9,004

$ 22,296
43,214
255
1,705
371
(35)
2,257
(2,555)
(772)
2,301
1,639
9
834
4,063
(19,091)
9,272
14,372
12,494
2,506
95,135789(2,358)(1,225)(1,779)6,213
96,775435(4,970)
74
(116)
(13)
506
(136)
202
(2)
(4,020)—(2,843)
325
(6)
—
56
(204)
135
56
(2,481)—(30,553)
3,489
(64)
—
603
(2,195)
1,458
601(26,661)(1,585)
1,790(1,990)
—
(667)
13
(980)
(3,419)
55
1,865
7,073

(6,268)
600
(466)
(300)
(65)
8
(251)
(6,742)
(182)
(401)
9,073

(67,373)
6,449(5,004)(3,224)(698)
90(2,702)(72,462)(1,957)(4,305)97,515134¥ 9,072

77¥ 8,749827$ 94,03778
378(1,776)
863
1,337
1,162
233

8,851

Note 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 ofaccounting principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as required by the Financial
Instruments and Exchange Law of Japan. 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 all subsidiaries over which substantial control is exercisedeither 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 December 31, which differs from the year-end date of the Company; however, the accounts of thesecompanies were tentatively closed as of March 31 and the necessary adjustments for consolidation were made.
Investments in affiliates (companies over which the Company has the ability to exercise significant influence) are stated at cost plus equity in their
undistributed earnings or losses. Consolidated net income includes the Company’s equity in the current net income or loss of such companies, after theelimination of unrealized intercompany profits.
All assets and liabilities of the Company’s subsidiaries are revalued at the acquisition, if applicable, and the excess of cost over the underlying net assets atthe 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: 26
The remaining 2 subsidiaries which are unconsolidated are deemed immaterial and, accordingly, their results of operations had no significant effect on the
consolidated financial statements.
From the year ended March 31, 2010, SMK Electronics Technology Development (Shenzhen) Co., Ltd., SMK Mexicana S.R.L. de C.V., Showa EnterpriseCo., Ltd. and Ibaraki SMK Co., Ltd. were included in the scope of consolidation.
(d) Application of equity method of accounting
Number of affiliated companies accounted for by the equity method: 2
The 2 unconsolidated subsidiaries and 1 other affiliated company are deemed immaterial. As the effect of their results of operations on the consolidated
financial statements would be insignificant, the equity method of accounting has not been applied to these companies.
(e) Translation of foreign currencies
All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at the appropriate year-end exchange rates except forshareholders’ equity, which is translated at rates of exchange prevailing at the time the transactions occurred. Revenue and expense accounts are translated at
the average rates of exchange prevailing during the year.
(f ) Cash and cash equivalents
Cash and cash equivalents are composed of cash and time deposits all of which are low-risk, short-term financial instruments readily convertible into cash.
(g) Inventories
The following inventories are measured principally by their respective 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(Change in accounting policy)
From the year ended March 31, 2009, the Company and consolidated subsidiaries accounted for inventories in accordance with the Accounting Standard
for Measurement of Inventories issued by the Accounting Standards Board of Japan. Under this standard, inventories held for sale in the ordinary course ofbusiness are stated at cost, written down due to decreased profitability.
Due to the application of this standard, operating income for the year ended March 31, 2009 decreased by ¥115 million and loss before income taxes andminority interests increased the same amount.
The impact on the segment is listed in the concerned note.
(h) Securities
Securities are classified into three categories depending upon the holding purpose and accounted for as follows:i) trading securities, which are held for the purpose of earning capital gains in the short-term, are stated at fair market value, with related gain and loss
realized on disposal and unrealized gain and loss from market fluctuations recognized as gain or loss in the statement of income in the year of the change;ii) held-to-maturity debt securities, which a company has the positive intent to hold until maturity, are stated at amortized cost; and iii) other securities,
which are not classified as either of the aforementioned categories but are stated at fair market value if such value is available, or, if not, at moving-average
cost, with unrealized gain and loss, net of the applicable taxes, reported as a separate component of net assets. Realized gain and loss on sales of suchsecurities are calculated based on the moving-average cost.
(i) Derivatives
Derivatives are stated at fair value.
(j) Property, plant and equipment and depreciation
Property, plant and equipment is 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 for foreign subsidiaries.
(Additional information)
From the year ended March 31, 2009, the Company and consolidated subsidiaries changed the residual term of a part of machinery under the 2008
revision of the Corporation Tax Law.
As a result of this change, operating income decreased by ¥198 million and loss before income taxes and minority interests increased by the same amount.
The impact on the segment is listed in the concerned note.
(k) Intangible assets
Amortization of intangible assets is calculated by the straight-line method. Software for own use is amortized based on the utilizable period (5 years).
(l) Leases
Finance leases which are deemed to transfer the ownership of the leased assets to the lessee are capitalized and depreciated over their lease term with noresidual value.
However, such finance lease agreements executed on or before March 31, 2008 are accounted for by a method similar to that applicable to operating leases.
(m) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at the amount of estimated uncollectable accounts, based on individual collectability with respect toidentified doubtful receivables and past experience of doubtful receivables.
(n) Accrued bonuses
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.
(o) Accrued directors’ bonuses
Accrued directors’ bonuses are provided on the estimate of the amounts to be paid in the future by the Company based on an accrual basis at the balance
sheet date.
(p) Accrued retirement benefit obligations
To cover projected employee retirement benefits, the Company records the estimated obligations at the end of the fiscal year based on projected year-end
benefit obligations and plan assets, as adjusted for unrecognized actuarial gains or losses and unrecognized prior service cost.
Unrecognized actuarial gains or losses are amortized in the year following the year in which the gains or losses are incurred by the straight-line method over20

the period of 5 years which is within the average remaining years of service of the employees.
Unrecognized prior service cost is amortized by the straight-line method over the period of 5 years which is within the average remaining years of service ofthe employees.
(Change in accounting policy)
From the year ended March 31, 2010, the Company and consolidated subsidiaries applied the Partial Amendments to Accounting Standard for Retirement
Benefits (Part 3) issued by the Accounting Standards Board of Japan. The application of this standard, had no impact on profit and loss for the year ended
March 31, 2010.
(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) Hedge accounting(1) Method of hedge accounting
The exceptional method of hedge accounting is applied for the transactions of interest rate swaps, in cases meeting certain conditions.
(2) Hedge instrument and hedged item
Hedge instrument: interest rate swap
Hedged item: interest rate for long-term borrowings subject to interest rate fluctuations.
(3) Hedge policy
The Company uses interest rate swaps to avoid risks from interest rate fluctuations on borrowings, only when approved by the management.
(4) Assessment of hedge effectivenessAs the exceptional method is applied for interest rate swap, the assessment of hedge effectiveness is omitted.
(s) 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 calculatedusing the enacted tax rates and laws which will be in effect when the differences are expected to reverse.
(t) 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 numberof shares of common stock outstanding during the year. Diluted net income per share is computed based on the net income available for distribution toshareholders and weighted-average number of shares of common stock outstanding during each year after giving effect to the dilutive potential of shares ofcommon 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 and the number of shares of common
stock outstanding at the balance sheet date. Cash dividends per share shown for each period in the consolidated statements of income represent thedividends applicable to the respective period.
(u) Change in method of accounting(1) Accounting standard for lease transactions
From the year ended March 31, 2009, the Company and consolidated subsidiaries accounted for leased assets in accordance with the AccountingStandard for Lease Transactions and the Guidance on Accounting Standard for Lease Transactions issued by the Accounting Standards Board of Japan.
Under this standard and guidance, finance leases other than those which are deemed to transfer the ownership of the leased assets to the lessee areaccounted for in a manner similar to ordinary sales and purchase transactions.
However, such finance lease agreements executed on or before March 31, 2008, are accounted for in a manner similar to the accounting for ordinary
rental transactions.
The application of this standard, had no impact on profit and loss for the year ended March 31, 2009.
(2) Unification of accounting policies applied to foreign subsidiaries for consolidated financial statements
From the year ended March 31, 2009, the Company applied the Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements and made necessary modifications for the consolidated process.
The application of this standard, had a slight impact on net loss for the year ended March 31, 2009.
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 = ¥93.04, the approximate rate of exchange at March
31, 2010. 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, 2009 and 2010, consisted of the following:
Millions of yen
Finished products
Work in process
Raw materials and supplies
Total

Thousands of U.S. dollars

2009

2010

2010

¥ 3,255527
2,453¥ 6,235¥ 2,469
588
2,184¥ 5,241$ 26,540
6,321
23,472$ 56,333

The write-downs of inventories resulted from decreased profitability for the year ended March 31, 2009 and 2010 were as follows:
Millions of yen
Thousands of U.S. dollars
Cost of sales

2009

2010

2010

¥ 387

¥ 459

$ 4,932

Note 4. Short-term loans payable and long-term debt
Short-term loans payable principally to banks were unsecured and represented with interests ranging from 0.71% to 1.48% per annum as of March 31,
2010.
Long-term debt as of March 31, 2009 and 2010, consisted of the following:
Millions of yen
Thousands of U.S. dollars
Loans, principally to banks with interest
rates ranging from 0.89% to 2.40%:
SecuredUnsecured
Less: portion due within one year
Total

2009

2010

2010

¥

¥ 4,7662,450(656)¥ 6,560$ 51,227
26,333(7,055)$ 70,505

668
6,464
(766)
¥ 6,366

The assets pledged as collateral for short-term and long-term debt as of March 31, 2010 are summarized as follows:
Millions of yen
Thousands of U.S. dollars
Property, plant and equipment-book value¥ 1,973$ 21,209
The aggregate annual maturities of long-term debt outstanding as of March 31, 2010 are summarized as follows:
Millions of yen
Thousands of U.S. dollars
Year ending March 31,
2011
¥ 656
$ 7,055
2012
840
9,026
2013
3,903
41,952
2014
1,692
18,188125
1,3392015 and thereafter¥ 7,216$ 77,560
Total

21

Note 5. Research and development costs
Research and development costs included in cost of sales and selling, general and administrative expenses for the year ended March 31, 2009 and 2010
amounted to ¥3,168 million and ¥2,770 million ($29,768 thousand), respectively.
Note 6. Selling, general and administrative expenses
Major elements of selling, general and administrative expenses for the year ended March 31, 2009 and 2010 were as follows:
Millions of yen
Thousands of U.S. dollars
Salaries and wages of employees
Provision for bonus
Provision for directors’ and officers’ bonus
Retirement benefit cost
Provision for directors’ and officers’ retirement benefit
Provision for doubtful accounts

2009

2010

2010

¥ 3,876
204
—
(69)
57
2

¥ 3,454
264
34
271
41
—

$ 37,127
2,841
371
2,921
442
—

Note 7. Impairment of fixed assets
An impairment loss is recognized when the carrying amount of 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 the asset exceeds its recoverable amount being higher of discounted
future net cash flows or net realizable value.
For the year ended March 31, 2009 and 2010, the impairment loss was recognized for the following assets:
Millions of yen
2009

Asset group
Functional components
Touch panel
Total

Buildings
¥
68
3
¥
71

Location
Use
Japan Switch/Unit production facilities
Japan Touch panel production facilities

Machinery
Tooling andand vehicles office furniture
¥ 257
¥ 124
147
10
¥ 404
¥ 134

Leasedassets¥80—¥
80

Software
¥
3
—
¥
3

Total
¥ 532
160
¥ 692

Millions of yen
2010

Asset group
SMK U.K.Ltd.
Total

Machinery
Tooling andand vehicles office furniture
¥
17
¥
7
¥
17
¥
7

Location
Use
U.K. Switch production facilities

Total
¥
24
¥
24

Thousands of U.S. dollars
2010

Asset group
SMK U.K.Ltd.
Total

Machinery
Tooling andand vehicles office furniture
$ 182
$
73
$ 182
$
73

Location
Use
U.K. Switch production facilities

Total
$ 255
$ 255

Note 8. Income taxes
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 40.5% for the year ended March 31, 2009 and 2010 respectively.
Reconciliations between the statutory tax rate and the effective tax rates for the year ended March 31, 2009 and 2010 are as follows, however those for theyear ended March 31, 2009 are omitted because the operating result ended with net loss:
2010

Statutory tax rate
Items such as entertainment expenses permanently not deductible for tax purposes
Items such as dividend income permanently not deductible for tax purposesTax credit for research and development cost
Foreign tax credit
Change in valuation allowance
Statutory tax rate differences in subsidiaries
Elimination of dividend income
Other
Effective tax rates

40.5%
2.1
(14.7)(1.1)(18.4)(4.9)(18.5)
23.5
1.7
10.2%

The significant components of deferred tax assets and liabilities at March 31, 2009 and 2010 were as follows:
Millions of yen
Deferred tax assets:
Inventory write-down disallowed
Accrued bonuses disallowed
Intercompany profit on inventory
Retirement benefits disallowed
Allowance for doubtful accounts
Impairment loss
Operating loss carryforwards for tax purposes
Net unrealized losses on other securities
Carried forward foreign tax credit
Other
Valuation allowance
Deferred tax assets
Deferred tax liabilities:
Deferred gain on land
Advanced depreciation on buildings
Reserve for special depreciation
Net unrealized gains on other securities
Other
Net deferred tax assets

2009

2010

¥

¥

91
224
54
178
—
361
384
22
—
726
(403)
1,637

(108)
(128)
(39)
—
(188)
¥ 1,174

Thousands of U.S. dollars
2010

137
320
70
263
56
252
145
—
425
638
(320)
1,986

$ 1,469
3,440
753
2,832
598
2,712
1,562
—
4,571
6,856
(3,437)
21,356

(108)
(117)
(30)
(331)
(155)
¥ 1,245(1,165)(1,260)(326)(3,552)(1,669)$ 13,384

Note 9. Shareholders’ equity
The Corporation Law of Japan provides that an amount equal to 10% of the amount to be distributed as distributions of capital surplus (other than thecapital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal reserve, respectively, until the sum of
the capital reserve and the legal reserve equals 25% of the common stock account. Such distributions can be made at any time by resolution of theshareholder’s meeting, or by the Board of Directors if certain conditions are met, but neither the capital reserve nor the legal reserve is available for
distributions.

22

(d) Assumptions to calculate the actuarial present value of the benefit obligation and the expected return on plan assets

Note 10. Contingent liabilities
Contingent liabilities as of March 31, 2009 and 2010 were as follows:
Millions of yen

Guarantees of loans

Thousands of U.S. dollars

2009

2010

¥

¥

250

2010

—

$

—

Note 11. Treasury stock
The number of common stock of the Company held by the Company, consolidated subsidiaries and affiliated companies subject to the equity method at
March 31, 2009 and 2010 totaled 5,021,837 shares and 5,185,336 shares, respectively.
Note 12. Securities
Information regarding marketable securities classified as other securities at March 31, 2009 was summarized as follows:
Millions of yen
2009

Costs
Securities whose fairvalue exceeds their cost
StocksSecurities whose costexceeds their fair value
StocksOthers
Total¥

Fair value

Unrealized
gain (loss)

196
196

¥ 275
275

¥

1,582
55
1,637
¥ 1,833

1,452
55
1,507
¥ 1,782

(130)
(0)
(130)
¥ (51)

Forward foreignexchange contracts:
Sell:
US$
EUR
Total

2009

¥

19

Information regarding securities classified as other securities at March 31, 2010 was summarized as follows:
Millions of yen
Thousands of U.S. dollars

Securities whose fairvalue exceeds their cost
StocksOthersSecurities whose costexceeds their fair value
Stocks
Total

2010

Fair value

Costs

Unrealized
gain (loss)¥ 2,36047
2,407¥ 1,469
36
1,505

¥ 891
11
902

248
248
¥ 2,655

320
320¥ 1,825

(72)
(72)
¥ 830

Fair value

Costs

Unrealized
gain (loss)$25,363511
25,874$15,790387
16,177$ 9,573
124
9,697

2,660
2,660
$28,534

(780)
(780)
$ 8,917

3,440
3,440
$19,617

Unlisted stocks of ¥36 million at March 31, 2010 are not included in the above table because there were no quoted market prices available andthe fair value is extremely difficult to determine.

Information regarding sales of securities for the year ended March 31, 2009 and 2010 was as follows, however that for the year ended March 31, 2009 wasomitted because of low materiality:
Millions of yen
Thousands of U.S. dollars
2010

Proceeds from sales of securities
Gains on sales
Losses on sales

¥

53
16
(0)

2010

$

573
179
(2)

Note 13. Accrued employees’ retirement benefits(a) Outline of retirement benefit plans
The Company and certain of its domestic consolidated subsidiaries transferred the retirement benefit plans to the corporate pension fund plans under
the Defined Benefits Enterprise Pension Law of Japan on April 1, 2004. On the same day the approval was obtained for the exemption from thesubstituted portion of the welfare pension fund plans from the Minister of Health, Labor and Welfare. At the same time, the Company and certain ofits domestic consolidated subsidiaries revised the retirement benefit schemes and adopted the cash balance pension plans and the defined contribution
pension plans for a part of future contribution.
(b) Retirement benefit obligation as of March 31, 2009 and 2010
Millions of yen
Thousands of U.S. dollars
Retirement benefit obligation
Fair value of plan assets
Funded status
Unrecognized actuarial gains (losses)
Net amount recognized in the consolidated balance sheets
Prepaid pension costs
Accrued employees’ retirement benefits

2009

2010

2010

¥ 7,114(5,245)
1,869(3,085)(1,216)1,229¥ 13¥ 7,199(6,289)910(1,913)(1,003)1,019¥ 16$ 77,372(67,596)
9,776(20,556)(10,780)
10,953$ 173(c) Retirement benefit cost
Millions of yen

23

Service cost, net of plan participants’ contributions
Interest cost
Expected returns on plan assets
Amortization of unrecognized actuarial (gains) losses
Amortization of unrecognized prior service cost
Contribution to defined contribution pension plan
Net periodic costThousands of U.S. dollars

2009

2010

¥

¥

289
139
(205)
(27)
(465)
54
¥ (215)

322
142
(162)
471
—
53
¥ 826

Thousands of U.S. dollars
Contract
Unrealized
amountFair value gain (loss)

Unrealized
gain (loss)

Fair value

2009

2010

2009

2010

2009

2010

¥ 1,13735¥ 1,172¥ 1,780—¥ 1,780¥ 1,20836¥ 1,244¥ (46)—¥ (46)¥ (71)(1)¥ (72)¥ (46)—¥ (46)

2010

Due after five years
through ten years
¥ 22

2010

2.0%
3.5%
5 years
—

2010

2010

2010

$19,140—$19,140$ (503)—$ (503)$ (503)—$ (503)

2010

2010

2010

Interest rate swaps¥ 2,636¥ 2,468$28,332$26,526
Since interest rate swaps transaction applied a exceptional treatment is accounted for as if they were a integral part of the headged long-term loans
payables, it’s fair value is included in the fair value of long-term loans payable in Note 16.

2009

Due after one year
through five years
¥ 14

2010

2.0%
3.5%
5 years
5 years(1) Calculation of fair value
The fair value is calculated by the forward exchange rate.
(2) Derivative transactions to which hedge accounting was applied are excluded from the above table.
Millions of yen
Thousands of U.S. dollars(Interest related)
Contract
Due after
Contract
Due after
amountone yearamountone year

Unlisted securities¥ 35
The schedules for redemption of other securities with maturity dates at March 31, 2009 was summarized as follows:
Millions of yen

OthersMillions of yen

Contract
amount

79
79

2009

Note 14. Derivatives
As a matter of policy, the Company does not speculate in derivative transactions. The Company does not anticipate nonperformance by any of thecounterparties 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 foraccounting 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 the Company.
The Company uses interest rate swaps to avoid risks from interest rate fluctuations on borrowings. The exception method of hedge accounting is used toaccount for those transactions.
(Currency related)

Information regarding other securities without market value at March 31, 2009 was as follows:
Millions of yen

Due in one year

Discount rate
Expected return on plan assets
Amortization period of unrecognized actuarial gains or losses
Amortization period of unrecognized prior service cost2010

$ 3,461
1,532(1,743)
5,060—
572$ 8,882

Note 15. Leases
The following pro forma amounts represent the acquisition costs, accumulated depreciation and net book value of the leased assets commenced prior to theinitial year of application of the Accounting Standard for Lease Transactions as of March 31, 2009 and 2010, which would have been reflected in thebalance sheets if finance lease accounting had been applied to finance leases currently accounted for as operating leases.
Acquisition costs
Accumulated depreciation
Net book value
2009
2010
2009
2010
2009
2010
(Millions of yen)
Machinery and vehicles
¥ 896
¥—
¥ 644
¥—
¥ 251
¥—
53
—
46
—
8
—
Tooling and office furniture
¥ 949
¥—
¥ 690
¥—
¥ 259
¥—
Total
The amount of outstanding future lease payments for finance leases subsequent to March 31, 2009 and 2010 were as follows:
Millions of yen
2009

Due within one year
Due over one year
Total
Balance of accumulated impairment loss on leased assets

2010

¥ 151
204
¥ 355
¥ 74

¥—
—
¥—
¥—

Lease expenses and pro forma amounts of depreciation and interest expense for finance leases for the year ended March 31, 2009 and 2010 were as follows:
Millions of yen
Thousands of U.S. dollars
2009

2010

2010

Lease expenses
¥ 176
¥ 1
$ 10
Reversal of allowance for impairment loss on leased assets
10——
Depreciation
144
1
8Interest expense
27
00
Impairment loss
80——
Depreciation is calculated based on the straight-line method, assuming that useful life is within the lease term with no residual value.
Interest is calculated based on the discrepancy between total lease expenses and acquisition cost and is allocated to each term by the interest method.
The amount of future leasing fee for operating leases that could not be canceled in advance subsequent to March 31, 2010 is as follows:
Millions of yen
Thousands of U.S. dollars
Due within one year
Due over one year
Total

2010

2010

¥ 5
5
¥ 10

$ 62
49
$ 111

Note 16. Financial instruments(Additional information)
From the year ended March 31, 2010, the Company and consolidated subsidiaries applied the Accounting Standard for Financial Instruments and its
Implementation Guidance issued by the Accounting Standards Board of Japan.
(1) Policy for financial instruments
The Company and consolidated subsidiaries raise funds through bank borrowings.
The Company and consolidated subsidiaries uses derivatives for the purpose of reducing risk and does not enter into derivatives for speculative or
trading purposes.
(2) Types of financial instruments and related risk
Trade receivables—trade notes and accounts receivable—are exposed to credit risk in 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 a board meeting periodically.
Substantially all trade payables – trade notes and accounts payable – have payment due dates within one years.
Short-term borrowings are raised mainly in connection with business activities, and the repayment dates of long-term debt extend up to four years fromthe balance 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, the Company and consolidated subsidiaries utilizes interest rate swap transactions as ahedging instrument.

24

Information regarding fair value of financial instruments at March 31, 2010 was summarized as follows:
Millions of yen

Thousands of U.S. dollars

2010

2010

Book value Fair value Difference Book value Fair value Difference
Cash and cash equivalents¥ 8,749¥ 8,749¥ —$ 94,037 $ 94,037$ —Time deposits
9
9
—
94
94
—
Notes and accounts receivable, trade16,337
16,337—
175,592
175,592—
Investment securities
2,654
2,654
—
28,53428,534—
Short-term loans payable
3,750
3,750
—
40,30540,305—
Notes and accounts payable, trade
3,402
3,402
—
36,56736,567—
Accounts payable, non trade
7,440
7,440
—
79,96579,965—(89)(949)
Long-term loans debt
7,216
7,127
77,56076,611
(46)
(46)
(503)
(503)
Derivatives——
Long-term loans debt includes current portion of long-term loans debt which is booked as short-term loans payable in Balance sheets.
1. Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivative transactions
Cash and deposits, notes and accounts receivable, trade
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 loans payable
The fair value of long-term loans payable 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 14 Derivatives of the notes to the consolidated financial statements.
2. Financial instruments whose fair value is extremely difficult to determine
Thousands ofMillions of yen
U.S. dollars
2010

Unlisted securities

¥ 208

2010

$ 2,238

Unlisted securities are not included in the investment securities because there were no quoted market prices available and the fair value is extremely difficult todetermine.

3. The schedules for redemption of monetary assets and securities with maturities
Millions of yen

Thousands of U.S. dollars

2010

2010

Due after one year Due after five years
Due after one year Due after five years
Due in one year through five years through ten years Due in one year through five years through ten years¥ 8,749¥ —¥ —$ 94,044$ —$ —16,337——
175,592
—
—
—
15
31
—
171
340
25,0861531269,636
171
340

Cash and deposits
Notes and accounts receivable, trade
Investment securities (other)
Total

Note 17. Investment and rental property(Additional information)
From the year ended March 31, 2010, the Company and consolidated subsidiaries applied the Accounting Standard for Disclosures about Fair Value inInvestment and Rental Property issued by the Accounting Standards Board of Japan.
The profit of investment and rental property for the year ended March 31, 2010 amounted to ¥655 million ($7,035 thousand).
Information on the fair value of investment and rental property at March 31, 2010 was summarized as follows:
Millions of yen
Thousands of U.S. dollars
2010

2010

Book value
Book value
beginning of the year end of the year
¥ 4,150¥ 4,119

Fair value¥ 8,833

Book value
Book value
beginning of the year end of the year
$ 44,610$ 44,275

Fair value$ 94,946

1. The fair value represents the acquisition cost less accumulated depreciation.
2. The fair value is mainly estimated by real estate agency.

Note 18. Segment information
The business segments are not presented because the Company’s primary business activity consists of a single segment of electronic components.
Geographic segments
Year ended or as of March 31

2009
Net sales
Outside customers
Intersegment sales
Total
Cost and expenses
Operating income (loss)
Identifiable assets

Japan

Asia

¥ 31,162
27,90959,07159,011
60
55,118¥ 24,574
23,09047,664
48,471(807)
14,811Millions of yen
North America
Other areas¥ 15,850
132
15,982
14,9631,019
6,064¥ 1,156
158
1,314
1,542
(228)
1,074

Elimination of corporate¥—(51,289)(51,289)(51,483)
194(18,899)

Consolidated¥ 72,742—
72,74272,504238
58,168

1. The division of these groups depends on the geographic proximity and region.
Asia ------------------------Singapore, Malaysia, China, Taiwan, Korea and Philippines
North America -----------U.S.A. and Mexico
Other areas ---------------United Kingdom, Belgium and Hungary
2. As described in Note 1./(g)/(Change in accounting policy), from the year ended March 31, 2009, the Company and consolidated subsidiaries accounted forinventories in accordance with the Accounting Standard for Measurement of Inventories. Due to the application of this standard, operating income decreasedby ¥41 million in Japan and by ¥6 million in North America, and operating loss increased by ¥66 million in Asia and ¥0 million in other areas compared withthe amount which would have been recorded by the method applied in the previous year.
3. As described in Note 1./(j)/(Additional information), from the year ended March 31, 2009, the Company and consolidated subsidiaries changed the residual
term of a part of machinery under the 2008 revision of the Corporation Tax Law. As a result of this change, operating income decreased by ¥198 million in
Japan compared with the amount which would have been recorded by the method applied in the previous year.

25

2010
Net sales
Outside customers
Intersegment sales
Total
Cost and expenses
Operating income (loss)
Identifiable assets

Japan

Asia

¥ 28,501
25,15953,66053,166494
51,602¥ 19,709
22,91842,627
41,214
1,413
14,406

Millions of yen
North America
Other areas¥ 15,300
112
15,412
14,614
798
7,303

¥

861
74
935
1,150
(215)
972

Elimination of corporate¥—(48,263)(48,263)(48,252)(11)(18,170)

Consolidated¥ 64,371—
64,371
61,892
2,479
56,1132010
Net sales
Outside customers
Intersegment sales
Total
Cost and expenses
Operating income (loss)
Identifiable assets

Japan

Asia

$ 306,334
270,413576,747
571,4275,320
554,617$ 211,838
246,321458,159442,968
15,191
154,839

Thousands of U.S. dollars
North America
Other areas$ 164,440
1,199
165,639
157,074
8,565
78,496$ 9,252799
10,051
12,366(2,315)
10,449Elimination of corporate$

Consolidated—(518,732)(518,732)(518,618)(114)(195,290)$ 691,864—
691,864
666,218
26,647603,111

Other areas
¥
683

Total
¥ 52,510
72,74272.2

The division of these groups depends on the geographic proximity and region.
Asia ------------------------Singapore, Malaysia, China, Taiwan, Korea and Philippines
North America -----------U.S.A. and Mexico
Other areas ---------------United Kingdom, Belgium and Hungary

Overseas sales

2009
Overseas sales
Consolidated sales
Ratio of overseas sales (%)
2010
Overseas sales
Consolidated sales
Ratio of overseas sales (%)
2010
Overseas sales
Consolidated salesAsia¥ 31,595

43.4
Asia¥ 26,696

41.5
Asia$ 286,925

North America¥ 16,681

22.9
North America¥ 15,643

24.3

Millions of yen
Europe¥ 3,551

4.9
Millions of yen
Europe¥ 1,911

3.0

1.0
Other areas
¥
382

0.6

Thousands of U.S. dollars
North America
EuropeOther areas$ 168,134$ 20,538
$
4,105

Total
¥ 44,632
64,371
69.4
Total$ 479,702
691,865

The division of these groups depends on the geographic proximity and region.
Asia ------------------------Singapore, Malaysia, China, Taiwan, Korea and others
North America -----------U.S.A. and others
Europe ---------------------United Kingdom, Belgium and others
Other areas ---------------Brazil and others

Note 19. Stock option plan2009
At the shareholders’ meeting held on June 20, 2003, a stock option plan was approved. Under this plan, certain employees and employees of affiliatedcompanies were granted options to purchase common stock of 482,000 shares in total at an exercise price of ¥442. Those eligible could exercise the options
when the market price exceeded 130% of the exercise price for preceding day within the term of exercise, which was from July 1, 2005 to June 30, 2008.
Stock option activities during the year ended March 31, 2009 were as follows:
Number of Shares
Outstanding at beginning of year
100,000
Exercised
15,000
Expired
85,000The weighted average price of stocks when exercised is¥580.
At the board of directors meeting held on April 24, 2008, a stock option plan was approved. Under this plan, certain employees of the Company and a
director and employees of affiliated companies were granted options to purchase common stock of 1,102,000 shares in total at an exercise price of ¥509.
Those eligible could exercise the options when the market price exceeded 130% of the exercise price for preceding day within the term of exercise, which
was from June 1, 2010 to May 31, 2013.
Stock option activities during the year ended March 31, 2009 were as follows:
Number of Shares
Granted
1,102,000
Non-eligible at end of year
1,102,000
The fair value of stocks when granted is
¥115.
2010
At the board of directors meeting held on April 24, 2008, a stock option plan was approved. Under this plan, certain employees of the Company and a
director and employees of affiliated companies were granted options to purchase common stock of 1,102,000 shares in total at an exercise price of ¥509($5.47). Those eligible could exercise the options when the market price exceeded 130% of the exercise price for preceding day within the term of exercise,
which was from June 1, 2010 to May 31, 2013.
Stock option activities during the year ended March 31, 2010 were as follows:
Number of Shares
Outstanding at beginning of year
1,102,000
Non-eligible at end of year
1,102,000
The fair value of stocks when granted is¥115 ($1.24).
Note 20. Related party transactions
Significant transactions with related parties for the year ended March 31, 2009 and 2010 were as follows:
Millions of yen
Transactions
Balances
Loans
Guarantees
LeasesLoan receivable
Guarantees
Outstanding future lease payments
2009
Showa Enterprise Co., Ltd.
¥ 50
¥ 250
¥ 163
¥ 734
¥ —
¥ 332
Millions of yen
Transactions
Balances
Guaranty money deposited
Rent
Other investments
Rent
2010
Terutaka Ikeda
¥ —
¥ 14
¥ 15
¥ —
Thousands of U.S. dollars
Transactions
Balances
Guaranty money deposited
Rent
Other investments
Rent
2010
Terutaka Ikeda
$ —
$ 150
$ 156
$ —
(Additional information)
From the year ended March 31, 2009, the company applied the Accounting Standard for Related Party Disclosures and its Implementation Guidance.
The adoption of this standard had no effect in the scope of the disclosures.
Note 21. Subsequent events
The following appropriation of retained earnings of the Company, which has not been reflected in the accompanying consolidated financial statements forthe year ended March 31, 2010, was approved at a shareholder’s meeting held on June 24, 2010.
Millions of yen
Thousands of U.S. dollars
Cash dividends (¥8.00 = $0.09 per share)

2010

2010

¥ 591

$ 6,358

26

Report of Independent Auditors

Shares and Shareholders(As of March 31, 2010)

Authorized shares:

195,961,274

Issued shares:

79,000,000

Number of shareholders:

11,364

Major shareholders (top ten)

Shares Owned (1,000 shares)

Japan Trustee Services Bank, Ltd.
Nippon Life Insurance Company
Mizuho Corporate Bank, Ltd.
Dai Nippon Printing Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
SMK Cooperating Company Share Holding Association
Terutaka Ikeda
Meiji Yasuda Life Insurance Company
The Showa Ikeda Memorial Foundation

Percentage of Shares (%)

4,757
4,001
3,663
3,200
3,134
1,937
1,771
1,717
1,566
1,500

6.43
5.41
4.95
4.33
4.24
2.62
2.40
2.32
2.12
2.03

Notes: 1. SMK holds 5,049 thousand shares of treasury stock, but is excluded from the above list. Figures for percentage of shares are calculated excluding treasury stock.
2. Of the above shares owned by major shareholders, the following number of shares are held in trust operations:Japan Trustee Service Bank, Ltd.: 4,757 thousand shares

Share ownership by number

Share ownership by shareholder type (unit: share)

1~999 shares

2,153 (18.95%)

Financial institutions

22,252,685 (28.17%)

1,000~9,999 shares

8,517 (74.94%)

Financial instruments dealers

2,843,526

10,000~99,999 shares

617 (5.43%)

Companies and other entities

11,271,092 (14.27%)

Foreign investors

4,845,722

100,000~499,999 shares

61 (0.54%)

Individuals and others

32,737,804 (41.44%)

500,000 shares~

16 (0.14%)

Treasury stock

5,049,171(3.60%)(6.13%)(6.39%)

Share price chart (unit: yen)

Nikkei 225 stock average
750

26,000Stock Price (the candle)
high

high
close

600

open

22,000

open

close
low
low
open price < close price open price > close price450

18,000300

14,000150

10,000

0

6,000

4 5
2008

27

6

7

8

9

10 11 12

1 2
2009

3

4

5

6

7

8

9

10 11 12

1 2
2010

3
(year/month)28

Board of Directors and Corporate Auditors(As of June 24, 2010)

D I R E C TO R S

COR P OR AT E EXECUT I V E OF F I CER S

Yasumitsu Ikeda

Yoshiyuki Kaku

Paul Evans

Hideo Matsumoto

Akira Utazaki

Mikio Wakabayashi

Director, Executive Deputy President
Sales Division

Executive Vice President
Connection System
Division

Executive Vice President
Sales Division, Americas

Vice President
Sales Division, Europe

Vice President
Deputy Division Directorof Sales Division

Vice President
Functional Components
Division

Tetsuya Nakamura

Tsutomu Isoda

Hiroshi Miyakawa

Shigechika Yanagi

Takemi Ishibashi

Kohei Ohgaki

President and COO

Vice President
Research and Development

Vice President
Sales Division

Vice President
Touch Panel Division

Vice President
Production Management

Vice President
Corporate Planning andGeneral Affairs

Corporate Data
(As of March 31, 2010)

Yoshio Sakurai

Hajime Yamada

Yuji Tanahashi

Director, Executive Vice President,
Chief Technology Officer

Director, Executive Vice President,
Chief Financial Officer

Director

AU D I TO R S

Terutaka Ikeda

Kenji Kobayashi

Hidefumi Kobayashi

Kouichiro Sugihara

Naru Nakashima

Auditor andChairman of Auditors
Meeting

Auditor

Auditor

Auditor

AuditorName:

SMK Corporation

Established:

January 15, 1929

Primary business:

Manufacture and sale of various parts for electro-communication device andelectronic equipment

Capital:7,996,828,021 yen

Stock exchange listing:Tokyo Stock Exchange

Administrator of shareholders’ register:

Mitsubishi UFJ Trust and Banking Corporation

Independent auditors:

Ernst & Young ShinNihon LLC
Tokyo, Japan

Employees (SMK-Group):

12,906

Head office:5-5, Togoshi 6-chome, Shinagawa-ku, Tokyo 142-8511, JapanTEL 81-3-3785-1111
FAX 81-3-3785-1878

Subsidiaries & affiliates:
Domestic:
Overseas:
Website:29

Subsidiaries
Affiliates
Subsidiaries

5 companies
2 companies
22 companies

http://www.smk.co.jp/30