SEMI ANNUAL REPORT 2011
For the six months ended September 30, 2011

Connectors for Photovoltaic Module

Financial Highlights
SMK Corporation and Consolidated Subsidiaries

Thousands of
U.S. dollars

Millions of yen
Six months ended September 30

Millions of yen
2011

2010

2011

2011

¥ 33,002¥ 28,515$ 372,018¥ 61,914

Operating income（loss）

2,284

（42）

（549）

2,754

Net income（loss）

1,159

（590）

（7,701）

1,037¥ 54,420¥ 51,611$ 673,336¥ 53,059

30,49728,066366,159

29,862

Year ended March 31

Operating Results
Net sales

Financial Position
Total assets
Total net assets

Per Share Data

Yen

U.S. dollars

Yen

Net income（loss）
Basic¥ 15.71¥ （8.10）$ （0.11）¥14.14ーーーー

DilutedNote: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥76.65 = U.S. $1.00.

Net sales■ Full year
100,000■ ■ First half

Operating income（loss）
Millions of yen■ Full year
6,000

87,659■ ■ First half

Millions of yen

5,654

Net income (loss)■ Full year

2,337

72,74280,000■ ■ First half

64,371

3,807

61,914

1,710

4,000

44,60040,0002,479
32,28033,00228,5151,862

2,000 2,094

60,00044,031Millions of yen

4,000

1,996

940

2,754

1,037

2,284

1,643

2,000

1,159

0
（590）

20,000238
0 2008

2009

2010

2011
Mar.

2011
Sep.

0

2008

Basic net income (loss) per share■ Full year

■ First half

yen

2009

（42）
2010

2011
Mar.

2011
Sep.

Total assets■ Full year

■ First half

Millions of yen■ Full year

■ First half

32,386
58,16856,11360,000

25.19

2010

2011
Mar.

2011
Sep.

Millions of yen

40,00066,73727.32（1,620）2009

Total net assets

80,00060（2,000） 2008

53,05951,611

29,07931,127

29,862

28,066

2009

2010

2011
Mar.

2011
Sep.

30,00030
14.14
40,00020,00020,00010,0000（8.10）（21.68）
（30）

2008

2009

1 SEMI ANNUAL REPORT 2011

2010

2011
Mar.

2011
Sep.

0

2008

2009

2010

2011
Mar.

2011
Sep.

0

2008

To Our Shareholders and Investors

I am obliged to you for your continued
support and good patronage.
We would like to report on the outline
and results of the SMK Group’s businesses
for the mid-term of the 90th fiscal year
(April 1, 2011 to September 30, 2011).
The Japanese economy is in the recovery
process from damage caused by the Great
East Japan Earthquake which occurredin March 2011. However, while a stablesupply of electric power still stands asa “post-earthquake issue,” future economic
prospects are not optimistic due tothe lasting appreciation of the yen
and the financial problems in Europe.
We will exercise our best efforts to gain
the trust of customers as well as topromptly respond to drasticallychanging environments and pursue
product creation that is always one
step ahead of the times as a leading
supplier of information infrastructure.

November 2011

Tetsuya Nakamura
President and Chief Operating Oﬃcer

SEMI ANNUAL REPORT 2011 2

Perfomance Overview

During the interim term under review, touch panels achieved solid results against the backdropof steady demand in Japan and overseas, and businesses expanded in new markets, such as
the solar-related market and the LED lighting market. We also actively focused on thesmartphone market. Nevertheless, overall net sales declined year-on-year due to factors
including the sluggish video equipment field with flat-panel televisions at its core.
Despite overall cost saving activities through the promotion of cost reduction, control of
expenses and other items, earnings also decreased year-on-year as a result of the impact
of soaring prices of raw materials and other factors, in addition to the decrease of net sales
due to the continuing appreciation of the yen.

Audio
VisualOther￥110 Million

0.4％
18.1％

Car
Electronics

Net sales

Communication

43.2％

Information
Home
Electronics/Industry

3 SEMI ANNUAL REPORT 2011

Touch Panel Division￥5,162 Million
Connection System
Division
38.3％￥10,919 Million
Functional
Components
Division￥12,324 Million

Overview of Consolidated Results by Division(April 1, 2011 to September 30, 2011)

Connection System
Division

LED lighting connectors(LT-6 series)
Application : LED lighting

Principal Products● RF Coaxial Connectors● FPC Connectors● Board to Board Connectors● Jacks

Functional Components
Division

50W/20W enabled AC ADAPTER(EPM series)
Applications : scanners, printers, etc.

Principal Products● Switches● Bluetooth Units● Remote Control Units● Camera Modules

Touch Panel
Division

Vehicle-mounted Capacitive touch panel
Applications : automotive devices such as car navigation

Principal Products● Resistance Sensitive Touch Panels● Capacitive Touch Panels● Optical Touch Panels

Sales in the first quarter were comparatively sluggish compared to theentire interim term because of restricted demand for components dueto the impact of the Earthquake; however, by September, a recovery
in set production along with a sharp increase in demand forconnectors led to sales exceeding the previous year during the second
quarter. Particularly, sales for smartphones, laptop PCs and solarrelated fields were robust throughout the interim period, exceeding theprevious year.
Under a difficult economic environment characterized by the sharp
appreciation of the yen, the European credit problems and concerns
about an economic slowdown in the United States, the Division will
push ahead with developing new products for the communications
market, our main market, and other expanding markets including
digital appliances, car electronics, and new energy.

Sales in the audio-visual devices market, mainly the video equipment
field with flat-panel televisions at its core, were sluggish. Additionally,
sales of components for cellular phones and other communications
equipment, particularly smartphones, remained stagnant because
customers had sharp ups and downs in their business performance.
In contrast, sales of components for air conditioners and home
appliances achieved solid results thanks to expanding business
opportunities of the Division resulting from a shift to high function in
those fields. For the second half of the fiscal year, the Division will
endeavor to expand sales by focusing on developing newcomponents.

Sales of the touch panel division as a whole increased substantiallycompared with both the previous fiscal year and our management
plan. Sales in the automotive products market recovered smoothly
despite concerns about the impact of the Earthquake. Sales in thesmartphone market showed solid performance resulting from strong
sales for models utilizing our products, and the ATM market saw
increased demand in the Chinese market.
Looking ahead, the Division will proceed with its efforts to expand
sales further by developing and launching medium-sized capacitive
touch panels for the automotive products market and the tablet device
market.

SEMI ANNUAL REPORT 2011 4

Topics

01 SMK exhibit at CEATEC JAPAN 2011
We exhibited at thecomprehensive IT andelectronics trade fair
“CEATEC JAPAN 2011”
held at the Makuhari
Messe (Chiba) for fivedays from October 4th toOctober 8th.
With “Let’s see, touch, feel NEW Technology” asa concept, we displayed enhanced demonstration
exhibits including “mutual-capacitance” automotive
capacitive touch panels, and exercised ouringenuity in turning our booth into a place wheremodules, demonstrating to visitors our commitment

visitors were able to physically experience SMK

to the eco-friendly equipment market.

products. In the ecology zone, we exhibited LED
lighting connectors and connectors for photovoltaic

We had a record high of approximately 5,900
visitors to our booth during the event.

02 Business Development in Asia
SMK’s business in Asia accounts for about 40% in total
net sales of the group and about 80% of the total
number of employees of the SMK group. It has become

Production Bases
Sales Bases
Production and Sales Bases

Beijinga major pillar of SMK’s transnational management.
In order to further strengthen our production and

Seoul

Xian, China

sales system in Asia, we are promoting various

Shanghai

activities. On the production front, we established asecond Malaysian factory in April 2011 at Kota Bharu,

Dongguan, China

TaipeiHong Kong Shenzhen

which is located on the east coast of the Malay
Peninsula. Furthermore, in October 2011, we turned

Clark, Philippines

the factory in Dongguan, China, to which our
subsidiary SMK Electronics (H.K.) Ltd. previously
outsourced its manufacturing, into one of our
subsidiaries. On the sales front, we established a sales
office at Xi’an, China in May 2011, and are actively
promoting sales to our customers in China.

5 SEMI ANNUAL REPORT 2011

Beranang, Malaysia

Kota Bharu, Malaysia
SingaporeGlobal Network

Sales Oﬃce
Works
Works & Oﬃce

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., Dortmund Oﬃce

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

SMK (U.K.) Ltd.

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

SMK Hungary Kft.

SMK Electronics Technology Development (Shenzhen) Co., Ltd.
SMK Electronics Trading (Shanghai) Co., Ltd.

NORTH AMERICASMK Electronics INT L Trading (Shanghai) Co., Ltd.

SMK Electronics Corporation U.S.A.

SMK Electronics INTL Trading (Shanghai) Co., Ltd. Beijing Oﬃce

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

SMK Electronics Singapore Pte. Ltd.

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

SMK Electronics (Malaysia) Sdn. Bhd.

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

SMK Electronics (Phils.) Corporation

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

SMK Korea Co., Ltd.

SMK Electronics Corporation U.S.A., Chicago Oﬃce
SMK Electronics Corporation U.S.A., Detroit Oﬃce
SMK-Link Electronics Corporation
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 2011 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

2010

2011

2011

¥ 7,335¥ 6,695$ 87,347¥ 7,383

71

115

1,498

60

16,28915,305

199,678

14,842

Allowance for doubtful accounts

（52）

（44）

（574）

（48）

Inventories

5,615

5,555

72,488

5,672

Deferred tax assets

1,108

949

12,376885

Other current assets

2,831

2,668

34,812

3,060

33,197

31,243

407,625

31,854

2,301

2,101

27,415

2,493

247

91

1,185

103

Other investments

1,587

1,332

17,3801,602

Allowance for doubtful accounts

（211）

（115）

（1,511）

（116）

3,924

3,409

44,469

4,082

Land

4,422

4,412

57,5584,424

Buildings

16,66017,003

221,830

17,143

Machinery and vehicles

17,888

16,687217,705

16,843Tooling and oﬃce furniture

24,734

21,032

274,390

20,503

258

68

889

29

63,962

59,202

772,372

58,942（47,410） （43,204） （563,657）（42,696）2011

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

Investments and long-term loans
Investment securities
Long-term loans receivable

Property, plant and equipment

Construction in progressLess-accumulated depreciation

16,552

15,998208,715

16,246

Deferred tax assets

324

490

6,388

271

Intangible assets

423

471

6,139

606

747

961

12,527877¥ 54,420¥ 51,611$ 673,336¥ 53,059

Other assets

Total assets

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥76.65 = U.S. $1.00.

7 SEMI ANNUAL REPORT 2011

Thousands of
U.S. dollars

Millions of yen

Liabilities and net assets

Millions of yen
As of March 31

2010

2011

2011

¥ 3,067¥ 8,427$ 109,937¥ 3,207

3,607

3,377

44,056

3,290

Accrued income taxes

283

219

2,852

344

Accrued bonus

778

575

7,502

771

Accounts payable, non-trade

7,894

6,926

90,355

7,691

Other current liabilities

1,202

1,424

18,585

1,459

16,831

20,948273,287

16,762

6,370

1,966

25,654

5,720

Accrued employees' retirement beneﬁts

17

17

226

16

Accrued directors' and oﬃcers' retirement beneﬁts

108

133

1,731

125

Other long-term liabilities

597

481

6,279

574

7,092

2,597

33,890

6,435

7,996

7,996

104,329

7,996

Capital surplus

12,353

12,353

161,158

12,353Retained earnings

16,36614,994

195,614

15,876（3,039）（3,384）（44,146）（3,308）33,676

31,959416,955

32,917

160

46

603

266

（3,469）（4,075）（53,170）(3,449）（3,309）（4,029）（52,567）（3,183）

124

131

1,702

123

6

5

69

5

30,49728,066366,159

29,862¥ 54,420¥ 51,611$ 673,336¥ 53,059

2011

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

Issued and outstanding : 79,000,000 shares

Treasury stock

Accumulated other comperehensive income
Net unrealized gains (losses) on other securities
Foreign currency translation adjustments

Subscription rights to shares
Minority interests

Total liabilities and net assets

SEMI ANNUAL REPORT 2011 8

Consolidated Statements of Income
SMK Corporation and Consolidated Subsidiaries
Six months ended September 30
Thousands of
U.S. dollars

Millions of yen

Millions of yen
As of March 31

2010

2011

2011

¥ 33,002
26,775
3,943
2,284¥28,515
24,5743,983（42）$ 372,018
320,598
51,969（549）¥ 61,914

Other income
Interest and dividend income
Rent income
Gain on sales of ﬁxed assets
Other

38
471
6
91

Total other income

606

35
315
26
113
489

455
4,111
339
1,474
6,379

68
927
39
167
1,201

84
147
846
68
39
1,184

71
141
684
24
182
1,102

920
1,834
8,922
311
2,381
14,368

156
301
879
166
636

2,138

1,706

（655）

（8,538）

1,817

402
142

138
（204）
1
¥（590）

1,808（2,655）
10$（7,701）434
345
1¥ 1,037

U.S. dollars

Yen$（0.11）ー¥ 14.14ーNet sales
Cost of sales
Selling, general and administrative expenses
Operating income(loss)

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

Income before income taxes and minority interests
Income taxes
Current
Deferred
Minority interests
Net income

3¥ 1,159
Yen

Per share data
Net income
Basic
Diluted¥ 15.71ー¥（8.10）ー

2011

51,345
7,815
2,754

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥76.65 = U.S. $1.00.

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

Income before minority inrterests
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 2011

Thousands of
U.S. dollars

Millions of yen
As of March 31

2010

2011

2011

¥ 1,161¥（589）$（7,691）¥1,038（339）（783）（1,122）
39

（220）
（626）
（846）
（1,435）（2,873）（8,170）（11,043）（18,734）

（233）
（762）
（995）
43

37
2

(1,436)
1（18,743）
10

42
1

2011

Consolidated Statements of Cash FlowsSMK Corporation and Consolidated Subsidiaries
Six months ended September 30
Thousands of
U.S. dollars

Millions of yen
2010

2011

Millions of yen
As of March 31

2011

2011

Cash ﬂows from operating activities
Income before income taxes and minority interests¥ 1,706¥（654）$（8,538）¥ 1,817

1,659

1,635

21,336

3,653

Amortization of goodwill

76

93

1,209

155

Increase（decrease）in accrued employees' retirement beneﬁts

3

2

31

0

Increase（decrease）in prepaid pension costs

45

260

3,390

87

Increase（decrease）in accrued directors' and oﬃcers' retirement beneﬁts

（45）

7

94

（28）

Interest and dividend income

Depreciation and amortization

（38）

（35）

（455）

（68）

Interest expense

84

71

920

156

Loss on disposal of ﬁxed assets

68

24

311

166

(Increase) decrease in notes and accounts receivable, trade（995）（1,360）（17,740）

706(Increase) decrease in inventories

（718）

（189）

（2,467）（683）

Increase (decrease) in notes and accounts payable, trade

1,386

1,124

14,667990

Increase (decrease) in accounts payable, non-trade

697

（555）

(7,246)

221

（855）

（46）

（602)

（464）

3,073

377

4,910

6,708

26

25

340

58

Interest paid

（84）

（70）

（910)

（157）

Income taxes paid

（271）

（373）

（4,872）

（418）

39

203

2,647

39

2,783

162

2,115

6,230

Payments into time deposits

（52）

（100）

（1,298）（87）

Proceeds from time deposits

10

41

539

59

（1,819）（1,930）（25,185)（3,598）Proceeds from sale of ﬁxed assets

14

83

1,087

68

Purchases of intangible ﬁxed assets

ー

（19）

（246)

（49）

Proceeds from sale of investment securities

0

0

0

0

Payments for execution of loans

（30）

（15）

（200)

（52）

Collection of loans receivable

94

21

268

112

（8）

32

413

(454)

（1,791）（1,887）（24,622）(4,001)（1,327）

1,693

22,080（1,383）

Payments of long-term debt

（202）

（190）

（2,477）(656）

Purchases of treasury stock

（85）

（75）

（977）

(355）

0

0

3

1

（590）

（291）

（3,794）(954）

Net cash provided by (used in) ﬁnancing activities（2,204）

1,137

14,835(3,347）

Eﬀect of exchange rate changes on cash and cash equivalents

（202）

（100）

(1,300)(248）

Increase (decrease) in cash and cash equivalents（1,414）（688）(8,792)(1,366）

Cash and cash equivalents at beginning of the year

8,749

7,383

96,3198,749

Cash and cash equivalents at end of six months and the year

¥ 7,335¥ 6,695$ 87,347¥ 7,383

Other
SubtotalInterest and dividends received

Income taxes refunded
Net cash provided by (used in) operating activities
Cash ﬂows from investing activities

Purchases of ﬁxed assets

Other
Net cash provided by (used in) investing activities
Cash ﬂows from ﬁnancing activities

Increase(decrease) in short-term loans payable

Proceeds from sale of treasury stock
Dividends paid

Note: The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ￥76.65 = U.S. $1.00.

SEMI ANNUAL REPORT 2011 10

Corporate Information(As of September 30, 2011)

Corporate Data

Shares and Shareholders

Name

SMK Corporation

Authorized shares

195,961,274

Established

January 15, 1929

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)

11,243
Shares Owned(1,000 shares)

Percentageof Shares (%)

Capital￥ 7,996,828,021

Nippon Life Insurance Company

4,001

5.50

Stock exchange listing

Tokyo Stock Exchange

Mizuho Corporate Bank, Ltd.

3,619

4.98

Administrator ofshareholders register

Mitsubishi UFJ Trust andBanking Corporation

Dai Nippon Printing Co., Ltd.

3,200

4.40

Independent auditors

Ernst & Young ShinNihon LLC
Tokyo, JapanThe Bank of Tokyo-Mitsubishi UFJ, Ltd.

3,134

4.31

SMK Cooperating Company Share
Holding Association

2,314

3.18

Mitsubishi UFJ Trust and Banking
Corporation

1,937

2.66

Japan Trustee Services Bank, Ltd.
(Trust Account)

1,764

2.43

SMK Employees Share Holding
Association

1,621

2.23

Terutaka Ikeda

1,540

2.12

The Showa Ikeda Memorial Foundation

1,500

2.06

Employees (SMK-Group)

11,493

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

Subsidiaries - 5companies
Aﬃliates -Overseas
Website2companies

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

Note: SMK holds 6,274 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
Tetsuya Nakamura

President and Chief Operating Oﬃcer

Director, Executive Deputy President Sales Division Yasumitsu Ikeda

Executive Vice President Connection System Division

Yoshiyuki Kaku

Executive Vice President Sales Division, Americas

Paul Evans

Vice President Sales Division, Europe

Hideo Matsumoto

Vice President Deputy Division Director of Sales Division

Akira Utazaki

Vice President Functional Components Division

Mikio Wakabayashi

Vice President Research and Development

Tsutomu Isoda

Vice President Sales Division

Hiroshi Miyakawa

Vice President Touch Panel Division

Shigechika Yanagi

Vice President Production Management

Takemi Ishibashi

Vice President Corporate Planning and General Aﬀairs

Kohei Ohgaki

Director, Executive Vice President,Chief Financial Oﬃcer Hajime Yamada
Director, Executive Vice President,Chief Technology Oﬃcer Yoshio Sakurai

Yuji Tanahashi

Director

Auditors
Auditor and Chairman of Auditors Meeting

Terutaka Ikeda

AuditorHarutaka Seki

AuditorKenji Kobayashi

AuditorKouichiro Sugihara

AuditorNaru Nakashima

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/