ANNUAL REPORT2024

For the ﬁscal year ended March 31, 2024

To Our Shareholders and Investors

We are obliged to you for your continued support andgood patronage.
We would like to report on the outline and resultsof the SMK Group’s business for the 102nd fiscal year
(from April 1, 2023 to March 31, 2024).
We look forward to your continuing support.
June 2024
Yasumitsu Ikeda
President and CEO/COO

Financial Highlights
Percent Change
2023/2024

Millions of yen
Years ended and as of March 31

Thousands of
U.S. dollars

2024

2023

2024

Operating Results
54,842¥ 46,522

Operating income (loss)

1,128(1,243)ー(8,209)Profit (loss) attributable to owners of parent

1,334

(489)

ー

(3,230)56,365¥ 58,444

3.7%$ 385,998

32,27432,143(0.4)

212,291

Net sales¥(15.2)%$ 307,258

Financial Position
Total assets¥

Total net assets

Net sales

Profit (loss) attributable toowners of parent

Operating income (loss)
Millions of yen

Millions of yen

Millions of yen

3,000

75,000

2,992

3,000
1,917

54,842

54,161
48,56050,00048,2431,500
46,522

703

0

0

(244)

(489)

25,000(1,243)(1,500)

0

2020

2021

2022

2023

2024

1,334

1,500

1,128

1,070

(3,000)

2020

2021

2022

2023

2024

(1,500)(3,000)(2,651)
2020

2021

2022

2023

2024

SMK Philosophy

CONTENTS
To Our Shareholders and Investors

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

Financial Highlights
2

Overview of Consolidated Results by Division

4

Financial Section

5

Financial Review

6

Consolidated Balance Sheet

8

Consolidated Statement of Income

8

Consolidated Statement of Comprehensive Income

1 Contribute to society with pride and confidence.

9

Consolidated Statement of Changes in Net Assets

10Consolidated Statement of Cash Flows

2 Be customer-oriented, with zeal and sincerity.

11

Notes to Consolidated Financial Statements

28

Officer Introduction

SMK Action Guidelines

3 Challenge courageously for higher goals without

fear of failure.

4 Trust and respect each other for a brighter working

Corporate Information

atmosphere.

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

perspective.

Percent Change
2023/2024

Yen
Years ended and as of March 31

U.S. dollars

2024

2023

2024

Per Share Data
Profit (loss) attributable to owners of parent
Basic

¥

209.12¥ (75.00)

ー

ー

ー

ー

ー

100.00100.000.0

0.66

DilutedCash dividends$(0.50)

Note 1. The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥151.41 = U.S. $1.00.
2. In the calculation of profit (loss) per share, the Company’s shares remaining in the Board Benefit Trust (BBT), which are recorded astreasury stock under shareholders’ equity, are included in the treasury stocks that are deducted in the calculation of the average numberof shares in the period.
3. The Company and its consolidated subsidiaries have adopted “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29,
March 31, 2020) from the beginning of the fiscal year ended March 31, 2022.
As such, financial position after the year ended March 31, 2022 is calculated after adoptation of its accounting policy.

Total assets / Total net assets
Total assets

Millions of yen

Total net assets

80,000

Basic profit (loss) attributable toowners of parent per shareyenyen
472.14500
400

60,00054,79450,20456,36558,444100

209.12

24,62927,75130,64332,27432,143

2023

2024

50.00
50

0
(75.00)

(100)
(200)

20,000100.00

70.00

75

100
40,000100.00297.92300
200

50,332

Cash dividends per share

40.00

25

(300)
(400) (410.88)

0

2020

2021

2022

2023

2024

(500)

2020

2021

2022

2023

2024

0

2020

2021

2022

ANNUAL REPORT 2024 1

Overview of Consolidated Results by Division(April 1, 2023 to March 31, 2024)

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

CS(Connection System)
Division
Major Products:
Connectors(Coaxial, Board-to-Board, FPC)
Jacks

Sales by Division
Research &Development
CenterOthers¥ 11 Million

0.0%¥ 387 Million

0.8%

Net sales¥ 46,522

44.3%

MillionSCI
Division¥ 25,536 Million

CS
Division¥ 20,586 Million

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

54.9%

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

Sales by Market
Industry / Others¥ 4,513 Million

9.7%

ICT

17.0%

¥ 7,908 Million

Research &Development
CenterMajor Products:
Wireless Modules
NFC Antennas

Net salesCar¥ 46,522
Electronics
Million35.7%¥ 16,599 Million

37.6%

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

2 ANNUAL REPORT 2024

Home
Appliance¥ 17,500 Million

In the car electronics market, sales of connectors exceeded those of the previous
year due to firm sales of camera-related products and expansion in demand forelectrical devices. In the ICT market, although tablet-related demand for US
customers decreased, sales exceeded those of the previous year as smartphonerelated demand for Chinese customers remained strong throughout the year.
Meanwhile, in the home appliance market, although sales of amusement-related
products declined year on year due to the impact of inventory adjustments in themarket, sales in CS Division as a whole exceeded those of the same period of theprevious fiscal year.
As a result, net sales of CS Division amounted to ¥20,586 million (2.9%
increase year on year), and operating income was ¥1,095 million (22.5%
increase year on year).

Net sales / Operating income
25,00020,0002,000

19,997

15,00020,586
1,600

1,095

1,200

894
10,000

800

5,000

400

0

In the home appliance market, sales of remote control units for sanitation
expanded steadily, but sales of remote control units for housing equipment andair conditioners shrank from those in the previous year due to the impact ofsluggish sales in the market. In the car electronics market, inventory adjustments
by major customers continued beyond our projection and sales of in-vehicle
control units and touch sensors shrank from those in the previous year.
In SCI Division as a whole, market conditions stagnated and inventory
adjustments by major customers prolonged longer than projected, resulting in a
year-on-year decline.
As a result, net sales of SCI Division amounted to ¥25,536 million (25.9%
decrease year on year), and operating loss was ¥2,145 million (compared to an
operating income of ¥393 million in the previous fiscal year).

Millions of yen

2023

0

2024

Net sales / Operating income (loss) Millions of yen
40,0004,000

34,48230,0003,000

25,5362,000

20,00010,000

1,000

393

0

0

(1,000)(2,145)(2,000)(3,000)2023

Regarding Bluetooth® modules, the central product of Research & Development
Center’s wireless communication module businesses, sales for payment terminals
and medical devices fell below those of the previous year, but sales for mobile
printers expanded. In addition, sales of Sub-GHz RF modules for lighting
equipment expanded, and sales of Research & Development Center as a whole
exceeded those of the previous year.
As a result, net sales of Research & Development Center amounted to ¥387
million (14.2% increase year on year), and operating loss was ¥184 million(compared to an operating loss of ¥160 million in the previous fiscal year).

(4,000)2024

Net sales / Operating loss

Millions of yen
500

500
339

387

0

0

(160)

2023

(184)

2024

(500)

ANNUAL REPORT 2024 3

Financial Section

Five-Year Summary
SMK Corporation and Consolidated Subsidiaries

Thousands of
U.S. dollars

Millions of yen
Years ended andas of March 31

2020

2021

2022

2023

2024

2024

54,161 ¥48,560 ¥48,243 ¥54,842 ¥46,522$ 307,258

Operating income (loss)

(244)

1,070

703

1,128

(1,243)(8,209)Profit (loss) attributableto owners of parent(2,651)

1,917

2,992

1,334

(489)

(3,230)50,204 ¥50,332 ¥54,794 ¥56,365 ¥58,444$ 385,998

24,62927,75130,64332,27432,143

212,291

Operating Results
Net sales¥

Financial Position
Total assets
Total net assets¥

Yen

U.S. dollars

Per Share Data
Total net assets¥ 3,870.65 ¥ 4,311.91 ¥ 4,914.89 ¥ 4,932.86 ¥ 5,070.15

$

33.49

Profit (loss) attributableto owners of parent
Basic
DilutedCash dividends(410.88)297.92472.14209.12(75.00)(0.50)

ー

ー

ー

ー

ー

ー

40.00

50.00

70.00

100.00100.000.66

Note 1. The U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥151.41 = U.S. $1.00.
2. In the calculation of profit (loss) per share, the Company’s shares remaining in the Board Benefit Trust (BBT), which are recorded astreasury stock under shareholders’ equity, are included in the treasury stocks that are deducted in the calculation of the average numberof shares in the period.
3. The Company and its consolidated subsidiaries have adopted “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29,
March 31, 2020) from the beginning of the fiscal year ended March 31, 2022.
As such, financial position after the year ended March 31, 2022 is calculated after adoptation of its accounting policy.

4 ANNUAL REPORT 2024

Financial Review

SMK’s net sales for the fiscal year ended March
31, 2024 decreased 15.2% year on year to¥46,522 million (US$307,258 thousand), andTotal net assets(As of March 31)

Millions of yen
34,000operating loss of ¥1,243 million (US$8,209
thousand) and loss attributable to owners of

32,27432,1432023

2024

30,64331,000parent of ¥489 million (US$3,230 thousand)were recorded.

27,751
28,000Net Sales
In the home appliance market, sales for remote control units for
sanitation purposes expanded steadily, but sales of remote control
units for home equipment and air conditioners shrank from thosein the previous fiscal year due to the impact of sluggish sales in themarket. In the car electronics market, in connectors, sales ofcamera-related products were firm, but sales of in-vehicle control
units and touch sensors shrank from those in the previous fiscal
year due to inventory adjustments by major customers. In the ICT
market, sales decreased from the previous fiscal year due to a
decline in tablet-related demand as a result of a reactionary dropof stay-at-home demand during the COVID-19 pandemic.
As a result, net sales were ¥46,522 million (US$307,258
thousand), down 15.2% year on year.

25,00024,6290Profit attributable to owners of parent
Loss attributable to owners of parent was ¥489 million (US$3,230
thousand) as a result of the recording of rent income/expense,
foreign exchange gains, loss on impairment of fixed assets, etc. inother income/expenses.

Total Assets / ROA
As of March 31, 2024, total assets were ¥58,444 million(US$385,998 thousand), with an ROA (a) of 0.4%.
(a) ROA is based on ordinary profit which is added or subtracted interest
income (expenses), dividend income, rent income (expenses), and foreignexchange gains from operating income (losses).

2022

Return on equity (ROE)

%

10.2

12
7.3
8

4.2
4

0
(1.5)
(4)

(8)

(12)

(9.9)

2020

2021

2022

2023

(Years ended March 31)

%
8
6.5
5.2

6

4.5
4

2

Cash FlowsNet cash provided by operating activities amounted to ¥3,719
million (US$24,562 thousand), net cash used in investing activities
totaled ¥1,617 million (US$10,680 thousand), and net cash used infinancing activities was ¥478 million (US$3,157 thousand).

2024

Return on assets (ROA)

Total Net Assets / ROE
As of March 31, 2024, total net assets were ¥32,143 million(US$212,291 thousand), with an ROE of (1.5)%.

2021(Years ended March 31)

Operating Income
Operating loss amounted to ¥1,243 million (US$8,209 thousand)despite the improved variable cost rate and suppression of fixed
costs from our continuous cost reduction efforts, due to thedecrease in net sales and recording of unrecoverable loss on
valuation of inventories.

2020

0.4
0

(2)

(0.3)

2020

2021

2022

2023

2024

ANNUAL REPORT 2024 5

Consolidated Balance SheetSMK Corporation and Consolidated Subsidiaries
As of March 31, 2023 and 2024

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

Assets

2023

2024

2024

¥

¥

$

Current assets
Cash and cash equivalents (Note 18)

8,915

10,197

67,347

Time deposits (Note 18)

54

61

403

Notes receivable, trade (Note 18)

64

50

330

Electronically recorded monetary claims (Note 18)

1,606

3,132

20,686

Accounts receivable, trade (Note 18)

11,505

10,03966,303Inventories (Note 3)

10,073

9,257

61,139Other current assets (Note 20 and 24)

1,080

1,150

7,595

(47)

(64)

(423)

33,251

33,824

223,393

4,041

4,327

28,578Long-term loans receivable (Note 24)

92

90

594

Asset for retirement benefits (Note 8)

2,344

3,788

25,018Other investments (Note 24)

963

900

5,944

Allowance for doubtful accounts

(88)

(94)

(621)

7,352

9,010

59,507

Land (Note 4)

5,869

5,819

38,432

Buildings

19,641

20,697

136,695

Machinery and vehicles

25,23825,851

170,735

Tooling and office furniture

19,385

18,966125,263

29

39

258

2,131

2,314

15,283

198

39

258

72,49673,728486,943(56,928)

58,400385,708

15,567

15,328101,235

Deferred tax assets (Note 15)

97

149

984

Intangible assets (Note 13)

94

130

859

192

279

1,843

58,444$ 385,998

Allowance for doubtful accounts

Investments and long-term loans
Investment securities (Note 18 and 19)

Property, plant and equipment (Note 5, 13 and 21)

Leased assets
Right of use assets
Construction in progressLess-accumulated depreciation
Other assets

Total assets
See accompanying notes to consolidated financial statements.

6 ANNUAL REPORT 2024¥

56,365¥

Consolidated Balance Sheets

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

Liabilities and net assets

2023

2024

2024

¥

¥

5,840

$ 38,571

434

504

3,329

4,878

4,702

31,055

Accrued income taxes

347

270

1,783

Accrued bonuses

596

572

3,778

Accrued directors’ and officers’ bonuses

26

1

7

1,774

1,801

11,895

—

107

707

1,645

1,571

10,376

16,193

15,371

101,519

Long-term debt (Note 5 and 18)

4,863

7,022

46,377

Lease liabilities (Note 18)

1,028

997

6,585

Deferred tax liabilities (Note 15)

1,220

2,005

13,242

Accrued directors’ and officers’ retirement benefits

131

132

872

Liability for retirement benefits (Note 8)

24

37

244

Accrued directors’ and officers’ share awards

29

27

178

Current liabilities
Short-term loans payable (Note 5)
Lease liabilities (Note 18)
Notes and accounts payable, trade

Accounts payable, non-trade
Valuation reserve for inventory purchase commitments
Other current liabilities (Note 6 and 20)

6,491Long-term liabilities

Other long-term liabilities

598

705

4,656

7,897

10,92972,181

7,996

7,996

52,810Capital surplus

12,057

12,057

79,631Retained earnings

14,73013,25387,531

Treasury stock(2,531)(3,030)(20,012)32,25230,276

199,960

Net unrealized gains (losses) on other securities

773

1,159

7,655

Net unrealized gains (losses) from hedging instruments

—

(70)

(462)

(1,149)(497)(3,282)

397

1,274

8,414

21

1,866

12,32432,27432,143

212,291¥ 56,365¥ 58,444$ 385,998

Net assets
Shareholders’ equity (Note 9)
Common stock
Authorized : 19,596,127 shares
Issued: 7,200,000 shares

Accumulated other comprehensive income

Foreign currency translation adjustments
Retirement benefits asset and liability adjustments

Total liabilities and net assets

ANNUAL REPORT 2024 7

Consolidated Statement of Income
SMK Corporation and Consolidated Subsidiaries
Years ended March 31, 2023 and 2024

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

Net sales (Note 22 and 23)
Cost of sales (Note 3 and 10)
Selling, general and administrative expenses (Note 10 and 11)
Operating income (loss) (Note 23)

¥

2023

54,842
45,231
8,483
1,128

¥

2024

2024

46,52239,094
8,671(1,243)$ 307,258
258,200
57,268(8,209)Other income
Interest and dividend income (Note 24)
Rent income
Foreign exchange gains
Gain on sales of fixed assets (Note 12)
Gain on sales of investment securities (Note 19)
Other
Total other income

115
980
720
18
2
603
2,441

167
987
1,089
183
273
201
2,903

1,103
6,519
7,192
1,209
1,803
1,328
19,173

Other expenses
Interest expense
Rent expense (Note 24)
Loss on investments in investment partnerships
Loss on sales of fixed assets (Note 12)
Loss on disposal of fixed assets (Note 12)
Loss on impairment of fixed assets (Note 13)
Loss on valuation of investment securities
Extra retirement payments (Note 14)
Other
Total other expenses

173
549
263
0
76
517
25
ー
58
1,663

156
581
112
ー
72
562
1
102
125
1,715

1,030
3,837
740
ー
476
3,712
7
674
826
11,327

1,906

(53)

(350)

352
219
1,334
1,334

233
201
(489)
(489)

$

1,539
1,328
(3,230)(3,230)$33.49

Profit before income taxes
Income taxes (Note 15)
Current
DeferredProfit (loss)
Profit (loss) attributable to owners of parent

¥

¥
Yen

Per share data (Note 17)
Total net assets
Profit attributable to owners of parent
Basic
DilutedCash dividends¥ 4,932.86¥ 5,070.15

209.12ー
100.00(75.00)ー
100.00U.S. dollars(Note 2)(0.50)ー0.66

See accompanying notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income
SMK Corporation and Consolidated Subsidiaries
Years ended March 31, 2023 and 2024

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

Profit (loss)
Other comprehensive income (Note 14)
Net unrealized gains (losses) on other securities
Net unrealized gains (losses) from hedging instruments
Foreign currency translation adjustments
Retirement benefits asset and liability adjustments
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of parent
See accompanying notes to consolidated financial statements.

8 ANNUAL REPORT 2024

¥

2023

1,334

¥

2024

(489)

¥

347
2
254
(123)
481
1,815

¥

385
(70)
652
876
1,844
1,355

¥

1,815

¥

1,355

2024

$

(3,230)

$

2,543
(462)
4,306
5,786
12,179
8,949

$

8,949

Consolidated Statement of Changes in Net Assets
SMK Corporation and Consolidated Subsidiaries
Years ended March 31, 2023 and 2024

Millions of yen

Shareholders’ equity

Balance at April 1, 2022
Cash dividends paid
Profit attributable to ownersof parent
Acquisition of treasury stock
Disposition of treasury stock
Cancellation of treasury stock
Transfer to Capital surplus
from retained earnings
Net changes in items otherthan shareholders’ equity
Total changes
Balance at March 31, 2023
Balance at April 1, 2023
Cash dividends paid
Loss attributable to ownersof parent
Acquisition of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes
Balance at March 31, 2024

Number of sharesof commonstock

Commonstock

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

Total
Net unrealized Net unrealized
Retirement accumulated
Total gains (losses) gains (losses)Foreign currency benefits asset
other
Treasury shareholders’on other from hedging
translation and liability comprehensive
stock
equitysecurities instruments adjustments adjustments
income7,500,000 ¥ 7,996 ¥ 12,057 ¥ 15,925 ¥ (4,876) ¥ 31,102 ¥
(439)
(439)
1,334
(2)
1,191
1,156

(933)
(1,156)2,089(300,000)
7,200,000
7,200,000

ー
7,996
7,996

ー
12,057
12,057(2,089)(1,194)
14,73014,730(987)

2,344(2,531)(2,531)

(489)
(500)
1

425 ¥

(2) ¥ (1,404) ¥

520 ¥

Total
net assets(459) ¥ 30,643
(439)

1,334

1,334

(2)
257
ー

(2)
257
ー

ー

ー

1,149
32,25232,252
(987)

347

2

254

(123)

481

481

347
773
773

2
ー
ー

254
(1,149)(1,149)

(123)
397
397

481
21
21

1,630
32,27432,274
(987)

(489)

(489)

(500)
1

(500)
1
385

ー
ー
ー (1,476)(498) (1,975)
385
7,200,000 ¥ 7,996 ¥ 12,057 ¥ 13,253 ¥ (3,030) ¥ 30,276 ¥ 1,159 ¥

(70)

652

876

1,844

1,844

(70)
(70) ¥

652
876
1,844
(131)
(497) ¥ 1,274 ¥ 1,866 ¥ 32,143

Thousands of U.S. dollars (Note 2)

Shareholders’ equity

Balance at April 1, 2023
Cash dividends paid
Loss attributable to ownersof parent
Acquisition of treasury stock
Disposition of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes
Balance at March 31, 2024

Commonstock

CapitalsurplusRetainedearnings

Accumulated other comprehensive income
Net unrealized Net unrealized
Retirement Total accumulated
otherTotal gains (losses) gains (losses)Foreign currency benefits asset
Treasury shareholders’on other from hedging
translation and liability comprehensivestock
incomeequitysecurities instruments adjustments adjustments$ 52,810 $ 79,631 $ 97,286 $ (16,716) $ 213,011 $ 5,105 $(6,519)(6,519)(3,230)(3,302)7

ー $ (7,589) $ 2,622 $Total net
assets139 $ 213,156(6,519)(3,230)(3,230)(3,302)7(3,302)7
2,543

ーー (9,748) (3,289) (13,044)
2,543$ 52,810 $ 79,631 $ 87,531 $ (20,012) $ 199,960 $ 7,655 $

(462)

4,306

5,786

12,17912,179(462)
4,306
5,786 12,179(865)(462) $ (3,282) $ 8,414 $ 12,324 $ 212,291

ANNUAL REPORT 2024 9

Consolidated Statement of Cash FlowsSMK Corporation and Consolidated Subsidiaries
Years ended March 31, 2023 and 2024

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

Cash flows from operating activities
Profit (loss) before income taxes
Depreciation and amortization
Loss on impairment of fixed assets
Increase (decrease) in accrued bonuses
Increase (decrease) in valuation reserve for inventory purchase commitments
Increase (decrease) in accrued directors’ and officers’ retirement benefits
Increase (decrease) in accrued directors’ and officers’ share awards
Increase (decrease) in asset and liability for retirement benefits
Interest and dividend income
Interest expense(Gain) loss on sales of investment securities(Gain) loss on sales of fixed assets(Gain) loss on valuation of investment securities
Loss on disposal of fixed assets
Loss (gain) on investments in investment partnerships
Extra retirement payments(Increase) decrease in notes and accounts receivable, trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable, trade(Increase) decrease in accounts receivable, non-trade
Increase (decrease) in accounts payable, non-trade
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Extra retirement payments
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from time deposits
Purchases of fixed assets
Proceeds from sales of fixed assets
Purchases of intangible fixed assets
Purchases of investment securities
Proceeds from sales of investment securities
Payments for execution of loans
Collection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term debt
Payments of long-term debt
Payments of lease liabilities
Purchases of treasury stock
Proceeds from sales of treasury stock
Dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
10 ANNUAL REPORT 2024

2023

2024

2024

¥

¥

$

1,906
2,884
517
(153)
ー
(41)
2
(294)
(115)
173
(2)
(18)
25
76
263
ー
564
(160)
(1,180)
28
(9)
(442)
4,021
116
(177)
(388)
19
ー
3,591

(53)
2,451
562
(33)
103
0
(1)
(187)
(167)
156
(273)
(183)
1
72
112
102
1,321
1,440
(1,209)
78
(20)
(92)
4,180
169
(169)
(387)
28
(102)
3,719

(350)
16,188
3,712
(218)
680
0
(7)
(1,235)(1,103)
1,030(1,803)(1,209)
7
476
740
674
8,725
9,511
(7,985)
515
(132)
(608)
27,607
1,116(1,116)(2,556)185(674)
24,562(35)
31(1,945)
22
(19)
(20)
7
(11)
28
ー
(1,944)(52)
48(2,379)
260
(58)
(87)
634
(8)
23
2
(1,617)(343)
317(15,712)
1,717
(383)
(575)
4,187
(53)
152
13
(10,680)200
2,700(2,826)
(496)
(1)
0
(438)
(862)
(375)
409
8,505
¥ 8,915

2,200
3,300
(3,991)
(504)
(498)
ー
(984)
(478)
(341)
1,282
8,915
¥ 10,197

14,53021,795(26,359)(3,329)(3,289)ー(6,499)(3,157)(2,252)
8,467
58,880$ 67,347

Notes to Consolidated Financial Statements
SMK Corporation and Consolidated Subsidiaries

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 of accounting principles generally accepted in Japan, which are different in certain respects as tothe application and disclosure requirements of International Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as required by the Financial Instruments and Exchange Act ofJapan. For the purpose of this document, certain reclassifications have been made in the accompanying consolidated
financial statements to facilitate understanding by readers outside Japan. In addition, certain reclassifications have been
made to the prior year’s consolidated financial statements to conform to the current year’s presentation.
( b ) Basis of consolidation and investments in affiliated companies
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries over which
substantial control is exercised either through majority ownership of voting stock and/or by other means.
All significant intercompany balances and transactions have been eliminated in consolidation.
Certain foreign subsidiaries’ fiscal period ends on December 31, which differs from the year-end date of the Company;
however, the financial statements of these companies were tentatively closed as of March 31 and necessary adjustments
for consolidation were made.
Investments in affiliates (companies over which the Company has the ability to exercise significant influence) are accounted
for by the equity method. Consolidated profit attributable to owners of parent includes the Company’s equity in the current
profit attributable to owners of parent or loss of such companies, after the elimination of unrealized intercompany profits.
All assets and liabilities of the Company’s subsidiaries are revalued at the acquisition, if applicable, and the excess of costover the underlying net assets at the date of acquisition is amortized over a period of five years on a straight-line basis if
such excess is material, or charged to income when incurred if immaterial.
( c ) Scope of consolidation
Number of consolidated subsidiaries: 24( d ) Application of equity method of accounting
Number of affiliated companies accounted for using the equity method: 1( e ) Translation of foreign currencies
Receivables and payables denominated in foreign currencies are translated into yen at the appropriate closing rate at theend of the reporting period, and differences arising from the translation are included in the consolidated statement ofincome.
All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at the appropriate
closing rate at the end of the reporting period. Revenue and expense accounts are translated at the average rates of
exchange prevailing during the year. Differences arising from the translation are presented as foreign currency translation
adjustments in the consolidated financial statements.
( f ) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in banks which can be withdrawn at any time and short-term
investments with a maturity of three months or less when purchased which can easily be converted to cash and are
subject to little risk of change in value.
( g ) Inventories
Inventories are mainly stated at the lower of cost or market. The following inventories are measured principally by theirrespective methods:
Finished products: Retail cost method
Work in process: Actual raw material cost, determined by the most recent purchase cost method, plus direct labor costs
and manufacturing overheads
Raw materials and supplies: Most recent purchase cost method
Consolidated subsidiaries adopt mainly the moving average method.
( h ) Securities
Marketable securities classified as other securities are carried at fair value with any changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets. Non-marketable securities classified as othersecurities are carried at cost. Cost of securities sold is determined by the moving average method.
( i ) Derivatives
Derivatives are stated at fair value.
( j ) Property, plant and equipment and depreciation (except for leased assets, Right of use assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is calculated principally by
the declining-balance method for the Company and its domestic subsidiaries, and by the straight-line method mainly forforeign subsidiaries. Certain buildings of the Company and its domestic subsidiaries acquired on or after April 1, 1998 andfacilities attached to buildings and other non-building structures acquired on or after April 1, 2016 are depreciated by thestraight-line method.
The estimated useful lives of the assets are as follows:
Buildings:
10 to 50 years
Machinery and vehicles:
4 to 10 years
Tooling and office furniture:
2 to 6 years
The residual values of the property, plant and equipment acquired on or before March 31, 2007 are depreciated equally
over a period of 5 years starting from the year following the year in which they have been depreciated up to theirdepreciable limit or 5% of the acquisition cost.

ANNUAL REPORT 2024 11

( k ) Intangible assets (except for leased assets)
Amortization of intangible assets is calculated by the straight-line method. Software for own use is amortized based on theutilizable period (5 years).
( l ) Leased assets
Noncancellable lease transaction that transfer substantially all risks and rewards associated with the ownership of assets
are accounted for as finance leases. Depreciation of leased assets is calculated by the straight-line method based on thelease life as the useful life and the residual value is zero.
(m ) Right of use assets
Depreciation of right of use assets is calculated by the straight-line method based on the lease term as the useful life andthe residual value is zero.
( n ) Allowance for doubtful accounts
The allowance for doubtful accounts is provided based on past experience for normal receivables and on an estimate of thecollectability of receivables from companies in financial difficulty.
( o ) Accrued bonus
Accrued bonuses are provided on the estimate of the amounts to be paid in the future by the Company, domestic
consolidated subsidiaries and certain overseas subsidiaries based on an accrual basis at the balance sheet date.
( p ) Accrued directors’ and officers’ bonuses
Accrued directors’ and officers’ bonuses are provided on the estimate of the amounts to be paid subsequent to the balance
sheet date.
( q ) Valuation reserve for inventory purchase commitments
Inventories that are reserved to purchase are provided on an estimate of the collectability from the loss resulting fromdecreased profitability.
( r ) 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.
( s ) Accrued board benefit trust
Accrued board benefit trust have been provided at an amount equal to 100% of the amount which would be required to be
paid based on the Company’s bylaws if all directors and officers exercised board benefit trust on the balance sheet date.
( t ) Retirement benefits
Asset and liability for retirement benefits for employees are recorded mainly at the amount calculated based on theretirement benefit obligation and the fair value of the pension plan assets as of balance sheet date.
The retirement benefit obligation for employees is attributed to each period by the benefit formula method over theestimated years of service of the eligible employees. Actuarial gain or loss is amortized in the year following the year inwhich the gain or loss is recognized primarily by the straight-line method over a period of 5 years, which is within theestimated average remaining years of service of employees.
( u ) Significant revenue and expenses
The main performance obligations in key businesses of the Company and its consolidated subsidiaries concerning revenue
from contracts with customers is the sales of the parts for electro-communication device and electronic equipment inJapan and abroad. For the sales of these products, revenue is recognized at the point in time when the products aredelivered to the customer. However, for sales within Japan of these products, revenue is recognized at the time of
shipment in accordance with the alternative treatment prescribed in Paragraph 98 of “the Implementation Guidance on
Accounting Standard for Revenue Recognition”.
( v ) Hedge accounting(1) Method of hedge accounting
Deferral hedge accounting is applied for interest rate swap transactions.
The exceptional treatment is applied for interest rate swap transactions meeting certain conditions.
(2) Hedging instruments and hedged items
Hedging instruments: interest rate swaps
Hedged items: long-term debt subject to interest rate fluctuation risk.
(3 ) Hedging policy
The Company uses interest rate swaps to hedge risks from interest rate fluctuations on borrowings, only whenapproved by the management.
(4) Assessment of effectiveness of hedging activities
The Company evaluates the hedge effectiveness by comparing accumulated fluctuations of the hedging instrument andhedged item every quarter.
When the exceptional treatment is applied for interest rate swaps, the assessment of hedge effectiveness is omitted.
( w ) Income taxes
Deferred income taxes are recognized based on the differences between financial reporting and the tax bases of the assets
and liabilities and are calculated using the enacted tax rates and laws which will be in effect when the differences are
expected to reverse.
( x ) Per share information
Basic net income per share is computed based on the net income available for distribution to shareholders of common
stock and weighted-average number of shares of common stock outstanding during the year. Diluted profit attributable toowners of parent per share is computed based on the profit attributable to owners of parent available for distribution toshareholders and average number of shares of common stock outstanding during each year after giving effect to thedilutive potential of shares of common stock to be issued upon the conversion of convertible bonds.
Net assets per share is computed based on the net assets available for distribution to shareholders of common stock andthe number of shares of common stock outstanding at the balance sheet date. Cash dividends per share shown for eachperiod in the consolidated statement of income represent the dividends applicable to the respective period.
( y ) Consumption taxes on assets
Nondeductible consumption taxes on assets are expensed in the consolidated financial statements.

12 ANNUAL REPORT 2024( z ) Significant accounting estimates
Impairment of fixed assets(1) Amount recorded in the consolidated financial statements
2023

Millions of yen

2024

Thousands of U.S. dollars
2024

2024

Thousands of U.S. dollars
2024

Property, plant and equipment¥ 15,567¥ 15,328$ 101,235
Note: Of which, CS Division: ¥672 million ($4,438 thousand) for the year ended March 31, 2023 and CS Division:¥643 million ($4,246 thousand), SMK Electronics (Phils.) Corporation: ¥417 million ($2,754 thousand) for theyear ended March 31, 2024.
Impairment loss

¥

2023

517

Millions of yen

¥

562

$

3,712

Note: Of which, CS Division: ¥－ million ($－ thousand) for the year ended March 31, 2023 and CS Division: ¥－ million($－ thousand), SMK Electronics (Phils.) Corporation: ¥213 million ($1,407 thousand) for the year ended March
31, 2024.
(2) Other information that facilitates users’ understanding of financial statements( i ) Calculation method
Assets or asset groups that have an indication of impairment are tested for impairment, and when it isdetermined that an impairment loss should be recognized, the book value is reduced to the recoverable amountand an impairment loss is recorded. The recoverable amount is measured at value in use or net realizable value.
Value in use is calculated by discounting future net cash flows estimated based on the future business plan tothe present value.
( ii ) Key assumptions
The key assumptions used in estimating future cash flows and the estimated recoverable amount are forecasts ofsales volume, sales prices and discount rate which serve the basis of the business plan. The forecast of sales
volume and sales prices are calculated based on the estimated future order documents and purchase orders
prepared by the customers. The discount rate is calculated based on inherent risk of interest rate and asset group.
(iii) Effect on the consolidated financial statements for the next fiscal year ending March 31, 2025
The estimation of projected sales volume, sales prices and discount rate, which is the key assumptions, arehighly uncertain. If the assumption that is used for the estimation of the year ended March 31, 2024 due to thechange of business environment, impairment losses may be incurred in the year ending March 31, 2025.
(aa) Change in presentation(Consolidated Statement of Income)“Subsidies for employment adjustment” has been reclassified to “other” in non-operating expenses for the year ended
March 31, 2024 because it becomes less than 10% of total non-operating expenses.
As a result, ¥79 million ($522 thousand) of “Subsidies for employment adjustment” in consolidated statement of income
for the year ended March 31, 2023 have been reclassified to “other” in non-operating income in consolidated statement ofincome for the year ended of March 31, 2024.
(ab) Additional information
Introduction of Board Benefit TrustWe introduced a new share-based compensation plan, a “Board Benefit Trust (BBT)” (the “Plan”) for directors (including
executive officer, excluding outside directors; “Directors”) based on the resolution at the 96th General Meeting of
Shareholders on June 22, 2018 for the purpose of raising awareness of contributing to the improvement of medium- tolong-term business results.
Regarding the accounting treatment for the plan, the gross method is adopted based on the “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees, etc. through Trusts” (ASBJ Practical Issue Task Force
No.30, March 26, 2015).
(1) Outline of the Plan
The Plan is a share-based compensation plan under which our shares are acquired through a trust (the trust
established in accordance with the Plan, the “Trust”) by using the funds contributed by the Company. Directors will
receive the Company’s shares through the Trust in accordance with the officer stock benefit rules prescribed by theCompany. In principle, Directors will receive benefits, such as the Company’s shares, on their retirement.
(2) The Company’s shares remaining in the Trust
The Company’s shares remaining in the Board Benefit Trust (BBT) are recorded by the Company as treasury stock
under net assets at their book value in the BBT (excluding the amount of ancillary expenses). As of March 31, 2024, thebook value of the said treasury stock was ¥149 million ($984 thousand), and the number of shares was 40,800.

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 = ¥151.41, the approximate
rate of exchange at March 31, 2024. 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.

ANNUAL REPORT 2024 13

Note 3. Inventories
Inventories as of March 31, 2023 and 2024 consisted of the following:
Finished products
Work in process
Raw materials and supplies
Total

¥
¥

2023

Millions of yen

4,277
660
5,134
10,073

¥
¥

2024

3,424
592
5,240
9,257

Thousands of U.S. dollars
2024$ 22,614
3,910
34,608$ 61,139

The write-downs of inventories resulting from decreased profitability for the years ended March 31, 2023 and 2024 were as
follows:
Millions of yen

Cost of sales

¥

2023

366

Thousands of U.S. dollars

¥

2024

932

$

2024

6,155

Note 4. Reduction entries
Reduction entries due to acceptance of prefectural government’s grants relating to property, plant and equipment as of March 31,
2023 and 2024 were as follows:
Land

¥

2023

Millions of yen

101

¥

2024

101

Thousands of U.S. dollars
2024

$

667

Note 5. Short-term loans payable and long-term debt
Short-term loans payable and long-term debt as of March 31, 2023 and 2024 consisted of the following:
Millions of yen
Short-term loans payable
Average interest rate on short-term loans payable, principally from banks, is 0.51%
SecuredUnsecured
Total

2023

¥
¥

Long-term debt
Average interest rate on long-term debt,principally from banks, is 1.06%
SecuredUnsecured
Less: portion due within one year
Total

—
2,500
2,500
2023

¥
¥

2024

¥
¥
Millions of yen

5,474
3,380
(3,991)
4,863

1,566
3,133
4,700
2024

¥
¥

3,483
4,680
(1,140)
7,022

Thousands of U.S. dollars
2024$ 10,343
20,692$ 31,042
Thousands of U.S. dollars
2024$ 23,004
30,909(7,529)$ 46,377

The assets pledged as collateral for short-term and long-term debt as of March 31, 2023 and 2024 were summarized as follows:
Millions of yen(1) Factory foundation
Buildings
Machinery and vehicles
Tooling and office furniture
Land
Total
(2) Other
Buildings
Tooling and office furniture
Land
Total

Thousands of U.S. dollars

2023

¥

¥
¥
¥

2024

993
195
64
256
1,510

¥

¥

185
1
39
226

¥
¥

1,037
172
69
256
1,536
171
1
39
211

2024

$

6,849
1,136
456
1,691
$ 10,145
$
$

1,129
7
258
1,394

The aggregate annual maturities of long-term debt (including current portion) outstanding as of March 31, 2024 weresummarized as follows:
Millions of yen
Thousands of U.S. dollars
Year ending March 31,
2024¥ 1,140$ 7,529
1,140
7,529
2025
2026
1,140
7,529
1,324
8,744
2027
416
2,748
2028
2029 and thereafter
3,000
19,814
Total¥ 8,163$ 53,913

Note 6. Other current liabilities
Of which, contract liabilities as of March 31, 2023 and 2024 were summarized as follows.
Contract liabilities

14 ANNUAL REPORT 2024

¥

2023

224

Millions of yen

¥

2024

61

Thousands of U.S. dollars
2024

$

403

Note 7. Notes receivable maturing on the balance sheet dateNotes receivable on the balance sheet date are treated as if they were settled at the cleaning date of notes. Consequently, as
the balance sheet date for the fiscal year ended March 31, 2024 was a bank holiday, the following notes receivable maturing on
the balance sheet date were included in the amount of balance at March 31, 2024.
Notes receivable

¥

2023

Millions of yen

ー

¥

2024

0

Thousands of U.S. dollars
2024

$

0

Note 8. Retirement benefits plans
The Company and certain of its domestic consolidated subsidiaries have either funded or unfunded defined benefit pension
plans and defined contribution benefit pension plans.
The Company has funded corporate pension fund plans and defined contribution pension plans. As a defined benefit pension
plan, the Company has adopted a cash balance plan. Under the cash balance plan, the plan sponsor contributes money into aplan participant’s account based on the points according to the employee’s years of service and job performance and the points
are calculated with an interest credit that reflects changes in market interest rates.
Certain subsidiaries have funded and unfunded lump-sum payment plans and defined contribution pension plans. The simplified
method is applied for the calculation of liability for retirement benefits and retirement benefit expense of certain domestic
subsidiaries.
The changes in the retirement benefit obligation during the years ended March 31, 2023 and 2024 were as follows:
Balance at the beginning of the year
Service cost
Interest cost
Actuarial gain and loss
Retirement benefit paid
Other
Balance at the end of the year

¥

¥

2023

Millions of yen

5,362
234
37
(13)
(553)
2
5,070

2024

Thousands of U.S. dollars
2024

2024

Thousands of U.S. dollars
2024¥ 5,070
225
36
(124)
(557)
10
¥ 4,661

The changes in plan assets during the years ended March 31, 2023 and 2024 were as follows:
Balance at the beginning of the year
Expected return on plan assets
Actuarial gain and loss
Contributions by the Company
Retirement benefits paid
Balance at the end of the year

¥

¥

2023

Millions of yen

7,567
129
12
223
(544)
7,390

¥ 7,390
123
1,234
212
(549)
¥ 8,412$ 33,485
1,486
238
(819)
(3,679)66$ 30,784$ 48,808
812
8,150
1,400
(3,626)$ 55,558

The funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2023 and 2024
were as follows:¥ 4,624(8,412)(3,788)37(3,750)Thousands of U.S. dollars
2024

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

5,045(7,390)(2,344)24(2,319)2024

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

24(2,344)¥ (2,319)37(3,788)¥ (3,750)

244(25,018)$ (24,767)

Funded retirement benefit obligation
Plan assets at fair value

¥

2023

Millions of yen$ 30,540(55,558)(25,018)244(24,767)

The components of retirement benefit expense for the years ended March 31, 2023 and 2024 were as follows:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain and loss
Retirement benefit expense

¥

¥

2023

Millions of yen

232
37
(129)
(206)
(66)

¥

¥

2024

219
36
(123)
(115)
17

Thousands of U.S. dollars
2024

$

$

1,446
238
(812)
(760)
112

The components of retirement benefits asset and liability adjustments included in other comprehensive income (before tax
effect) for the years ended March 31, 2023 and 2024 were as follows:
Actuarial gain and loss

¥

2023

(176)

Millions of yen

2024¥ 1,249

Thousands of U.S. dollars
2024

$

8,249

ANNUAL REPORT 2024 15

The components of retirement benefits asset and liability adjustments included in accumulated other comprehensive income(before tax effect) as of March 31, 2023 and 2024 were as follows:
Unrecognized actuarial gain and loss

Millions of yen

2023

¥

556

Thousands of U.S. dollars
2024

2024

¥ 1,806$ 11,928

The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2023 and 2024 were as
follows:
2023

Bonds
StocksLife insurances
Funds
Other
Total

2024

7.3%
34.9
31.2
10.8
15.8
100.0%

6.8%
44.6
25.6
9.2
13.8
100.0%

1. The total plan assets include retirement benefit trusts which constitute 19.5% for the year ended March 31, 2023 and 27.5%
for the year ended March 31, 2024.
2. The expected rates of return on plan assets has been estimated based on the anticipated allocation of plan assets to each asset
category and the expected long-term returns on plan assets held in each category.
The required contributions to the defined contribution plans by the Company and its consolidated subsidiaries for the years ended
March 31, 2023 and 2024 amounted to ¥90 million and ¥85 million ($561 thousand), respectively.
Assumptions to calculate the actuarial present value of the benefit obligation and the expected return on plan assets as of March
31, 2023 and 2024 were as follows:
2023

Discount rate
Re-evaluation rate
Expected rates of return on plan assets

2024

0.6%
0.52%
2.0%

0.6%
0.55%
2.0%

Note 9. Net assets
Information regarding changes in net assets for the years ended March 31, 2023 and 2024 was as follows:
1. Shares issued and outstanding / Treasury stock

Types of shares

Shares issued:
Common stock
Treasury stock:
Common stock

Number ofshares at April
1, 2022

2023

Increase

Decrease

Number ofshares at March
31, 2023

Number ofshares at April
1, 2023

2024

Increase

Decrease

Number ofshares at March
31, 2024

7,500,000—

300,000

7,200,000

7,200,000——

7,200,000

1,265,186

1,266

609,200

657,252

657,252

203,444400

860,296

The Company’s shares remaining in the Board Benefit Trust (BBT) are included in treasury stock (41,200 shares at March 31, 2023
and 40,800 shares at March 31 2024).
Number of shares

2023

1. Details of the decrease of shares issued are as follows:
Decrease due to cancellation of shares
2. Details of the increase of treasury stock are as follows:
Increase due to purchase of shares
Increase due to purchase of shares of less than standard unit
Increase in shares held by affiliates accounted for by the equity method
Increase due to free acquisition of shares as restricted stock
3. Details of the decrease of treasury stock are as follows:
Decrease due to cancellation of shares
Decrease due to disposal of shares
Decrease due to disposal of shares as restricted stock
Decrease due to payment of executive compensation based on BBT

300,000

—

—
535
731
—

200,000
770
874
1,800

300,000
200,000
106,600
2,600

—
—
—
400

2. Dividends(1) Dividends paid
Resolution

Type of shares

Shareholders’ meeting on Common
stockJune 22, 2022

16 ANNUAL REPORT 2024

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

440

70

2024

2023

Cut-off date

Effective date

March 31, 2022

June 23, 2022

2024

Resolution

Type of shares

Shareholders’ meeting on Common
June 27, 2023
stock
Board of Directors’Commonmeeting on October 25,
stock
2023

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

2024

Cut-off date

Effective date

Total dividends(Thousands of
U.S. dollars)

Dividends per share(U.S. dollars)

659

100

March 31, 2023

June 28, 2023

4,352

0.66

329

50

September 30,
2023

November 28,
2023

2,173

0.33

(2) Dividends with the cut-off date in the year ended March 31, 2023 and the effective date in the year ending March 31, 2024
Resolution

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

Shareholders’Commonmeeting on
stock
June 27, 2023

Retainedearnings

659

100

2023

Cut-off date

Effective date

March 31, 2023

June 28, 2023

Dividends with the cut-off date in the year ended March 31, 2024 and the effective date in the year ending March 31, 2025
2024

Resolution

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

Shareholders’Commonmeeting on
stock
June 25, 2024

Retainedearnings

319

50

2024

Total dividends(Thousands of
U.S. dollars)

Cut-off date

Effective date

March 31, 2024

June 26, 2024

2,107

Dividends per share(U.S. dollars)

0.33

Dividends of the Company’s shares remaining in the Board Benefit Trust (BBT) ¥2 million ($13 thousand) are included in total
dividends based on the resolution at shareholders’ meeting on June 25, 2024.

Note 10. Research and development costs
Research and development costs included in cost of sales and selling, general and administrative expenses for the years ended
March 31, 2023 and 2024 amounted to ¥2,390 million and ¥2,557 million ($16,888 thousand), respectively.

Note 11. Selling, general and administrative expenses
Major elements of selling, general and administrative expenses for the years ended March 31, 2023 and 2024 were as follows:
Salaries and wages of employees
Provision for bonus
Provision for directors’ and officers’ bonus
Retirement benefit cost
Provision for directors’ and officers’ retirement benefits
Provision for directors’ and officers’ share awards
Provision for doubtful accounts¥

Millions of yen

2023

4,189
271
26
4
21
11
12

2024

¥ 4,294
247
1
39
2
(0)
11

Thousands of U.S. dollars
2024$ 28,360
1,631
7
258
13
(0)
73

Note 12. Gains and losses of fixed assets
The components of gains and losses of fixed assets for the years ended March 31, 2023 and 2024 were as follows:
Gains on sales of fixed assets
Buildings
Machinery and vehicles
Tooling and office furniture
Land
Total

¥

¥

Millions of yen

2023

—
9
9
—
18

Loss on sales of fixed assets
Machinery and vehicles
Total

¥
¥

2023

Buildings
Machinery and vehicles
Tooling and office furniture
Intangible asset
Total

¥

¥

¥
Millions of yen

00

Loss on disposal of fixed assets
2023

¥

0
54
21
0
76

¥
¥
Millions of yen

¥

¥

2024

Thousands of U.S. dollars
2024

2024

Thousands of U.S. dollars
2024

42
3
2
135
183

2024

—
—

0
50
21
—
72

$

277
20
13
892
$ 1,209$$——

Thousands of U.S. dollars
2024

$

$

0
330
139
—
476

ANNUAL REPORT 2024 17

Note 13. Loss on impairment of fixed assets
An impairment loss is recognized when the carrying amount of an asset exceeds undiscounted future net cash flows which are
expected to be generated by such asset. The impairment loss is measured by the amount by which the carrying amount of theasset exceeds its recoverable amount being the higher of the discounted future net cash flows or net realizable value.
For the year ended March 31, 2023, impairment losses were recognized for the following assets.

Asset group

Location

CS Division

Japan

Use

Buildings

Connector¥
production facilities
Remote controls/
Switches/Camera
SCI DivisionJapan
modules
production facilities
Research &Wireless module
Japan
Development Center
production facilities
Remote controls/
SMK Manufacturing,
U.S.A. Unit productionInc.
facilities
Remote controls/
SMK Electronica S.A.
Mexico Unit production
de C.V.
facilities
SMK Electronics (Phils.)
Connector
Philippines
Corporation
production facilities
Total
¥

—

Millions of yen
2023

MachineryandvehiclesToolingand officefurniture

Right of Construction Intangible
use assets in progress
assetsLong-term
prepaid
expenses

¥

¥

¥

¥

—

12

—

¥

—

¥

—

—

Total

¥

12

4

298

67

—

—

2

—

372

—

—

0

—

—

—

—

0

—

48

3

33

0

0

—

85

3

16

2

—

—

3

—

25

—

0

18

—

—

—

—

19

7

¥

363

¥

106

¥

33

¥

0

¥

6

¥

—

¥

517

For the year ended March 31, 2023, impairment losses were recognized for the following assets.

Asset group

Location

Use

Buildings

Remote controls/
Switches/Camera
SCI Division
Japan modules/Touch¥
sensor production
facilities
Research &Wireless module
Japan
Development Center
production facilities
Remote controls/
SMK Manufacturing,
U.S.A. Unit productionInc.
facilities
Remote controls/
SMK Electronica S.A.
Mexico Unit production
de C.V.
facilities
Connector/Remote
SMK Electronics (Phils.)
controls/Touch
Philippines
Corporation
sensor production
facilities
Total¥

Asset group

Location

Use

7

MachineryandvehiclesToolingand officefurniture

Right of Construction Intangible
use assets in progress
assetsLong-term
prepaid
expenses

¥

¥

¥

¥

77

43

40

¥

—

¥

1

44

Total

¥

215

—

—

0

—

—

0

8

9

5

1

0

—

23

0

—

31

73

16

2

—

—

—

—

92

17

170

26

—

—

—

—

213

103

Buildings

Remote controls/
Switches/Camera
SCI Division
Japan modules/Touch$
sensor production
facilities
Research &Wireless module
Japan
Development Center
production facilities
Remote controls/
SMK Manufacturing,
U.S.A. Unit productionInc.
facilities
Remote controls/
SMK Electronica S.A.
Mexico Unit production
de C.V.
facilities
Connector/Remote
SMK Electronics (Phils.)
controls/Touch
Philippines
Corporation
sensor production
facilities
Total$

Millions of yen
2024

46

¥

266

¥

73

MachineryandvehiclesToolingand officefurniture

$

$

509

284

¥

40

¥

23

¥

2

Thousands of U.S. dollars
2024

¥

53

Right of Construction Intangible
use assets in progress
assetsLong-term
prepaid
expenses

$

$

264

$

—

$

7

¥

562

Total

291

$ 1,420

—

—

0

—

—

0

53

59

33

7

0

—

152

0

—

205

482

106

13

—

—

—

—

608

112

1,122

172

—

—

—

—

1,407

680

$ 1,757350$ 3,712

$

482

$

264

$

152

$

13

$

The Company’s assets for business operations are categorized into groups on a division-by-division basis and the Company’s
rental property and idle property on an individual property basis, whereas consolidated subsidiaries’ assets for business operations
are categorized into groups on a subsidiary-by-subsidiary basis and their rental property and idle property on an individual
property basis.
Of the above asset groups, SCI Division, Research & Development Center, SMK Manufacturing, Inc., SMK Electronica S.A. de C.V.
and SMK Electronics (Phils.) Corporation suffered declining trends in net sales and income due to intense price competition in the

18 ANNUAL REPORT 2024

market. The future cash flows from their asset groups were estimated and it was found that they could not generate sufficientprofitability to recover the carrying value of the asset groups, and therefore their book value was reduced to the recoverable
amounts.
The recoverable amount of the asset group of the SCI Division, Research & Development Center, SMK Manufacturing, Inc. and
SMK Electronica S.A. de C.V. were measured at value in use, and since no future cash flows are expected, the full amount of thebook value of the fixed assets regarding this business is recorded as impairment loss.
The recoverable amount of asset group of SMK Electronics (Phils.) Corporation was measured at value in use, which was
calculated by discounting future cash flows at 14.5%

Note 14. Extra retirement payments
Extra retirement payments were due to reorganization of North American group.

Note 15. 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 30.5% for the year ended March 31, 2023.
A reconciliation between the statutory tax rate and the effective tax rate for the years ended March 31, 2023 was as follows. For
the year ended March 31, 2024, note is omitted because it became loss before income taxes.
2023

2024

30.5%
1.1
(10.1)
4.5
(5.2)
1.7
1.1
(8.3)
14.2
0.2
0.3
30.0%

Statutory tax rate
Items such as entertainment expenses permanently non-deductible for tax purposes
Items such as dividend income permanently non-taxable
Change in valuation allowance
Tax credit for R&D expenses
Foreign withholding taxes
Inhabitant tax on per capita basis
Statutory tax rate differences in subsidiaries
Elimination of dividend income
Accumulated surplus of subsidiaries
Other
Effective tax rate

—%
—
—
—
—
—
—
—
—
—
—
—%

The Company and its domestic subsidiaries adopted the group tax sharing system from the beginning of the current fiscal year. In
accordance with this, the accounting procedures and disclosure of corporate and local income taxes and tax effect accounting are
based on the “Practical solution on the Accounting and Disclosure under the Group Tax Sharing System” (ASBJ Practical Issue
Task Force No. 42, August 12,2021).
The significant components of deferred tax assets and liabilities at March 31, 2023 and 2024 were as follows:
Deferred tax assets:
Inventory write-down
Accrued bonuses
Intercompany profit on inventory
Liability for retirement benefits
Allowance for doubtful accounts
Impairment loss
Operating loss carryforwards for tax purposes
Other
Total gross deferred tax assets
Valuation allowance for net operating loss carryforwards
Valuation allowance for deductible temporary differences
Total valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Asset for retirement benefits
Deferred gain on land
Advanced depreciation on buildings
Net unrealized gains on other securities
Accumulated surplus of foreign subsidiaries
Valuation difference on subsidiaries
Other
Deferred tax liabilities
Net deferred tax assets

2023

¥

108
170
66
8
35
611
2,267
539
3,807
(2,205)(1,164)(3,369)
438

(713)
(36)
(5)
(329)
(140)
(305)
(30)
(1,561)¥ (1,122)

Millions of yen

2024

¥

277
123
66
9
38
605
2,424
682
4,227
(2,347)(1,564)(3,912)314(1,137)
(36)
(4)
(497)
(136)
(304)
(53)
(2,170)¥ (1,855)

Thousands of U.S. dollars
2024

$

1,829
812
436
59
251
3,996
16,0104,504
27,918(15,501)(10,330)(25,837)
2,074(7,509)(238)(26)(3,282)(898)(2,008)(350)(14,332)$ (12,252)

ANNUAL REPORT 2024 19

1. Valuation allowance has increased by ¥542 million ($3,579 thousand). This increase is due to the valuation allowance forinventory write-down in the Company and its consolidated subsidiaries and due to the additional recognition of valuation
allowance for net operating loss carryforwards in subsidiaries.
2. A breakdown of net operating loss carryforwards and valuation allowance by expiry date as of March 31, 2023 and 2024 is asfollows:

2023

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

2024

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

2024

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

¥
¥

¥
¥

$
$

Due inone yearor less———

Due inone yearor less4(4)—

Due inone yearor less26(26)—

Due after
one yearthrough
two years

¥
¥

3
(3)
—

Due after
one yearthrough
two years

¥

¥

10
(10)
—

Due after
one yearthrough
two years

$

$

66
(66)
—

Millions of yen

Due after
two years
throughthree years

¥

4
(4)
—

¥

Due after
three years
throughfour years

¥

¥

3
(3)
—

Due after
four years
throughfive years¥¥

Millions of yen

Due after
two years
throughthree years

¥

9
(9)
—

¥

Due after
three years
throughfour years

¥

¥

166
(166)
—

Due after
four years
throughfive years¥¥

Thousands of U.S. dollars

Due after
two years
throughthree years

$

$

59
(59)
—

Due after
three years
throughfour years

$

1,096
(1,096)
$
—

187
(187)
—

124
(124)
—

Due after
four years
throughfive years

$
$

819
(819)
—

Due after
five years

¥

2,067
(2,006)¥61

Due after
five years

¥

2,109
(2,033)¥76

Due after
five years$ 13,929(13,427)
$
502

¥

Total

2,267
(2,205)
¥
61

¥

Total

2,424
(2,347)
¥
76

Total

$ 16,010(15,501)$
502(a) The amount is determined by multiplying the corresponding net operating loss carryforwards by the effective statutory tax rate.

Note 16. Other comprehensive income
The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income for the years ended March 31, 2023 and 2024.
Net unrealized gains (losses) on other securities:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effectNet unrealized gains (losses) on other securities
Net unrealized gains (losses) from hedging instruments:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effectNet unrealized gains (losses) from hedging instruments
Foreign currency translation adjustments:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effectForeign currency translation adjustments
Retirement benefits asset and liability adjustments:
Amount arising during the year
Reclassification adjustments for gains and losses included in
profit attributable to owners of parent
Amount before tax effectTax effect
Retirement benefits asset and liability adjustments
Total other comprehensive income

20 ANNUAL REPORT 2024

Millions of Yen

2023

¥

¥

504

Thousands of U.S. dollars
2024

2024

¥

826

$ 5,455

(2)

(273)

(1,803)

502
(154)
347

552
(167)
385

3,646
(1,103)
2,543

—

(70)

(462)

2

—

—

2
—
2

(70)
—
(70)

(462)
—
(462)

308

652

4,306

(78)

—

—

230
23
254

652
—
652

4,306
—
4,306

29

1,364

9,009

(206)

(115)

(760)

(176)
53
(123)
481

1,249
(372)
876
¥ 1,844

8,249(2,457)
5,786$ 12,179

Note 17. Amounts per share
1. In the calculation of total net assets and profit per share, the Company’s shares remaining in the Board Benefit Trust (BBT),
which are recorded as treasury stock under shareholders’ equity, are included in the treasury stocks that are deducted in thecalculation of the number of shares as of March 31, 2023 and 2024 and the average number of shares for the year ended
March 31, 2023 and 2024. In the calculation of total net assets per share, the said treasury stock deducted as of March 31,
2023 and 2024 is 41,200 and 40,800, respectively. In the calculation of profit per share, the said treasury stock deducted forthe year ended March 31, 2023 and 2024 is 41,958 and 40,917, respectively.
2. Profit attributable to owners of parent per share of common stock is based on the following information:
Millions of yen

2023

Basic Profit attributable to owners of parent per share:
Profit (loss) attributable to owners of parent
Profit (loss) attributable to owners of parent not attributable tocommon stockholders
Profit (loss) attributable to owners of parent attributable tocommon stock¥1,334¥ (489)$(3,230)

—

—

—

1,334

(489)

(3,230)2023

Average number of shares of common stock outstanding during
the yearThousands of U.S. dollars
2024

2024

Thousands of shares

6,382

2024

6,525

Note 18. Financial instruments(1) Policy for financial instruments
The Company and consolidated subsidiaries manage temporary cash surpluses through low-risk financial assets.
The Company and consolidated subsidiaries raise funds through bank borrowings.
The Company and consolidated subsidiaries use derivatives for the purpose of reducing risk and do not enter into derivatives
for speculative or trading purposes.
(2) Types of financial instruments and related risk
Trade receivables - trade notes, electronically recorded monetary claims and trade 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 aboard meeting periodically.
Substantially all trade payables - trade notes and accounts payable - have payment due dates within one year.
Short-term loans payable are raised mainly in connection with business activities, and the repayment dates of long-term debt
extend up to five years from the balance sheet date and lease liabilities are raised mainly in connection with capital
investment. Long-term debt with variable interest rates is exposed to interest rate fluctuation risk. However, to reduce suchrisk and fix interest expense for long-term debt bearing interest at variable rates, the Company and consolidated subsidiaries
utilizes interest rate swap transactions as a hedging instrument. Information regarding the method of hedge accounting,hedging instruments and hedged items, hedging policy, and the assessment of effectiveness of hedging activities is found in
Note 1 (v).
Execution and management of derivatives transactions are carried out in accordance with the company rules specifying thetransaction authority. In addition, in order to alleviate credit risk, derivative transactions are only dealt with banks with highcredit ratings. Although operating liabilities and loans payable are exposed to liquidity risk, the Group’s companies are able tomanage it by using methods such as preparing monthly cash management plans.
(3) Additional information regarding fair value of financial instruments
The contract amounts, etc. relating to derivatives transactions are described in Note 20. Derivatives themselves do not serve
as indicators of market risk involved in derivatives transactions.
Information regarding fair value of financial instruments at March 31, 2023 and 2024 was summarized as follows:

Investment securities
Long-term debt
Lease liabilities
Derivatives

Book value¥ 2,608
8,854
1,463
(13)

2023

Fair value¥ 2,608
8,877
1,463
(13)

Millions of yen

Difference

¥

—
23
(0)
—

2024

Book value

Fair value¥ 2,869
8,163
1,502
(99)

¥ 2,869
8,303
1,501
(99)

Difference

¥

—
140
(0)
—

Thousands of U.S. dollars
2024Book value$ 18,949
53,9139,920(654)

Fair value$ 18,949
54,8389,913(654)

Difference

$

—
925
(0)
—

1. “Cash and cash equivalents, time deposits”, “notes receivable, trade”, “electronically recorded monetary claims”, “accounts
receivable, trade”, “notes and account payable, trade”, “short-term loans payable”, and “accounts payable, non-trade” areomitted because these are cash items and their fair values approximate their carrying values due to their short maturities.
2. Investment in limited liability partnership ¥927 million in the consolidated balance sheet as of March 31, 2023 and ¥949 million($6,268 thousand) in the consolidated balance sheet as of March 31, 2024 are omitted.
3. Financial instruments whose fair value is extremely difficult to determine
Unlisted securities

¥

2023

505

Millions of yen

¥

2024

508

Thousands of U.S. dollars
2024$ 3,355

4. Long-term debt includes current portion of long-term debt recorded as short-term loans payable in the consolidated balance
sheets.
5. The assets and liabilities arising from derivatives are shown on a net basis with the amount in parentheses representing a net
liability position.
6. The schedules for redemption of monetary assets and securities with maturities

ANNUAL REPORT 2024 21

Millions of yen

2023

Cash equivalents and time deposits
Notes receivable, trade
Electronically recorded monetaryclaims
Accounts receivable, trade
Total

Due inone yearor less

Due after
one yearthroughfive years

Due after
five years
throughten years

1,606

—

¥ 11,505¥ 22,139——¥ 8,962
¥64

¥

—
—

¥

¥

Thousands of U.S. dollars
2024

Due inone yearor less

Due after
five years
throughten years——$ 67,704
330

—

3,132

—

—

20,686———

10,039¥ 23,474————

66,303$ 155,036

—
—

—
—

¥

2024

Due after
one yearthroughfive years¥ 10,251
50

¥

—
—

¥

¥

¥

Due inone yearor less

Due after
one yearthroughfive years$$

Due after
five years
throughten years

—
—

$

—
—
—

$

—
—

7. The redemption schedule for short-term loans payable and long-term debt are disclosed in Note 5.
Breakdown of fair value of financial instruments by level
Fair values of financial instruments are categorized into these levels as described below on the basis of the observability and themateriality of the inputs used in the fair value measurement.
Level1: Fair values measured using quoted prices of identical assets or liabilities in active markets among observable valuation
inputsLevel2: Fair values measured using inputs other than inputs included within Level 1 among observable valuation inputs
Level3: Fair values measured using unobservable valuation inputs
When several inputs that have significant impact on fair value measurement are used and those inputs are categorized into
different levels, the fair value is categorized into the lowest hierarchy level for fair value measurement among those in which eachof the inputs belongs.
(1) Financial instruments measured at fair value
Category

Investment securities
Other securities
StocksOthersTotal assets
Derivatives
Currency-related derivative
financial instruments
Interest-related derivative
financial instruments
Total liabilities

Millions of yen

2023

Level1

Fair value
Level2
Level3¥ 2,608 ¥
—
2,608

¥

Total

Thousands of U.S. dollars
2024

2024

Level1

Fair value
Level2
Level3

Total

Level1— ¥ 2,608 ¥ 2,794 ¥
—
—
—
—
2,608
2,794

— ¥
—
—

— ¥ 2,794 $18,453 $
75
75
—
75
2,869
18,453

—

13

—

13

—

(28)

—

(28)

—

(185)

—

(185)

—

—

—

—

—

(70)

—

(70)

—

(462)

—

(462)

— ¥

13 ¥

— ¥

13 ¥

— ¥

(99) ¥— ¥(99) $— $ (654) $Long-term debt
Lease liabilities
Total liabilities

Millions of yen

2023

Level1¥¥

Fair value
Level2
Level3— ¥ 8,877 ¥—1,463— ¥10,341 ¥Total— ¥ 8,877 ¥—1,463— ¥10,341 ¥Fair value
Level2
Level3— ¥ 8,303 ¥—1,501— ¥ 9,805 ¥— $18,453
495
495
495
18,949— $ (654)

Thousands of U.S. dollars
2024

2024

Level1

— $
—
—

Total

— ¥
—
—

(2) Financial instruments other than those measured at fair value
Category

Fair value
Level2
Level3

Total

Level1— ¥ 8,303 $—1,501— ¥ 9,805 $Fair value
Level2
Level3— $54,838 $—9,913— $64,758 $Total— $54,838—
9,913— $64,758

Note1: Description of valuation techniques used to measure fair value and inputs related to fair value measurement
Investment securities
Listed stocks are determined by using quoted prices. Fair values of listed stocks are categorized as Level 1 since they are tradedin active markets.
Others are Simple Agreement for Future Equity and categorized as Level 3. It is estimated by using recent fair value with theconsideration of events that affect the value of financial instruments recent quoted price.
Derivatives
The fair value of interest rate swaps and foreign exchange forward contracts are categorized as Level 2 because they aremeasured using the discounted present value method with observable inputs such as interest rates and exchange rates.
Long-term debt and lease liabilities
Fair values are measured using the discounted present value method based on the total amount of principle and interest,
remaining maturity, and interest rates taking into account credit risk, and are categorized as Level 2.
Note2: Information about financial instruments of Level 3 measured at fair value(1) Reconciliation of opening and closing balance are as follows.
Millions of yen

Balance at the beginning of the year
Profit or loss or other comprehensive income
Recognized in other comprehensive income (a)Purchase, sale, issuance and settelement
Balance at the end of the year

¥

¥

2024

—
2
2
73
75

Thousands of U.S.
dollars
2024

$

$

—
13
13
482
—

(a) Included in “net unrealized gain (loss) on other securities” in “other comprehensive income” in the consolidated statement ofcomprehensive income.

22 ANNUAL REPORT 2024

(2) Explanation of the fair value assessment process.
The fair value of financial instruments that are categorized as Level 3 are calculated based on Accounting Standards for Fair
Value Measurement (ASBJ Statement No.30, July 4, 2019). In the calculation of the fair value, it is considered categories of fairvalue level and valuation techniques used to measure fair value depending on the nature, characteristics and risks of the assets.

Note 19. Securities
Information regarding securities classified as other securities at March 31, 2023 and 2024 was summarized as follows:
Book
value

Securities whose book value exceeds
their acquisition
Stocks¥ 2,597
Others—Subtotal
2,597
Securities whose acquisition exceeds
their book value
Stocks10
Subtotal
10
Total¥ 2,608

2023

Millions of yen

2024

Thousands of U.S. dollars
2024

Acquisition

Unrealized
gain (loss)

Book
value

Acquisition

Unrealized
gain (loss)

Book
value

Acquisition

Unrealized
gain (loss)¥ 1,490—
1,490¥ 1,107—
1,107¥ 2,777
75
2,852¥ 1,12173
1,194¥ 1,656
2
1,658$ 18,341
495
18,836$ 7,404482
7,886$ 10,937
13
10,95014
14¥ 1,504

(3)
17
(3)
17
¥ 1,103 ¥ 2,869

22
22¥ 1,216

(5)
112
(5)
112
¥ 1,653 $ 18,949

145
145$ 8,031(33)(33)$ 10,917

Unlisted stocks of ¥959 million at March 31, 2023 and ¥981 million ($6,479 thousand) at March 31, 2024 are not included in theabove table because there were no quoted market prices available.
Investment securities in unconsolidated subsidiaries and affiliates are as follows:
Investment securities

Millions of yen

2023

¥

473

¥

Thousands of U.S. dollars
2024

2024

475

$ 3,137

Information regarding sales of securities classified as other securities for the years ended March 31, 2023 and 2024 was asfollows:
Proceeds from sales of securities
StocksGains on sales
Stocks
Losses on sales
Stocks2023¥

Millions of yen

7
7
2
2
—
—

¥

Thousands of U.S. dollars
2024

2024

634
634
273
273
—
—

$ 4,187
4,187
1,803
1,803
—
—

Impairment of investment securities classified as other securities for the years ended March 31, 2023 and 2024 were as follows:
StocksMillions of yen

2023

¥

25

¥

2024

Thousands of U.S. dollars
2024

1

$

7

Note 20. Derivatives
As a matter of policy, the Company does not speculate in derivative transactions. The Company does not anticipate
nonperformance by any of the counterparties to the derivative transactions, all of whom are leading domestic financial institutions
with high bond ratings.
In accordance with the Company’s policy, the accounting department controls derivative transactions and requires approval by
the director responsible for accounting and the representative directors of the Company. The director who has the responsibility
to control the performance and the related risks connected with derivatives reports these to the Management Committee of theCompany.
The Company uses interest rate swaps to hedge the risks from interest rate fluctuations on borrowings. The exceptional methodof hedge accounting is used to account for those transactions.
Millions of yen
Thousands of U.S. dollars(Currency related)
Contract amount2023
Forward foreign exchange contracts:
Sell: US$ / Buy: Yen
¥
504
Total
¥
504

¥
¥

2024

754
754

Fair value¥¥(Interest related)(13) ¥(13) ¥

2024(28) ¥(28) ¥

2023(13) ¥(13) ¥

2024

2023

¥

—

¥ 3,000

2023¥

Fair value

2024

—

¥ 3,000

2024

Fair value

$
$

2024

Unrealized
gain (loss)(185) $
(185) $

2024

(185)
(185)

Thousands of U.S. dollars

Due after one year

2024

Contract
amount(28) $ 4,980(28) $ 4,980

Millions of yen

Contract amountInterest rate swaps(Deferral hedge accounting)2023

Unrealized gain (loss)

2023

¥

Contract
amountDue after
one year

Fair value(70) $ 19,814$ 19,814

$

2024

—

¥

2024

2024

2024

(462)

ANNUAL REPORT 2024 23

Note 21. Investment and rental property
The profit of investment and rental property for the year ended March 31, 2023 amounted to ¥431 million.
The profit of investment and rental property for the year ended March 31, 2024 amounted to ¥406 million ($2,681 thousand).
Information on the fair value of investment and rental property at March 31, 2023 and 2024 was summarized as follows:
Millions of yen

2023

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

¥

6,671

¥

(111) ¥

6,559

Fair value
end of theyear¥ 13,051

2024

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

¥

6,559

¥

(4) ¥

6,555

Fair value
end of theyear¥ 13,302

Thousands of U.S. dollars
2024Book value
Book value
beginning
end of theof the year Net changeyear$ 43,319$(26) $ 43,293

Fair value
end of theyear$ 87,854

1. The fair value represents the acquisition cost less accumulated depreciation.
2. The components of net change in book value for the year ended March 31, 2023 included increases mainly due to acquisitionsin the amount of ¥40 million and decrease mainly due to depreciation ¥151 million. The components of net change in bookvalue for the year ended March 31, 2024 included increases mainly due to acquisitions in the amount of ¥168 million ($1,110
thousand), and decrease mainly due to depreciation ¥157 million ($1,037 thousand) and gain on sales of fixed assets ¥16
million ($106 thousand).
3. The fair value is mainly based upon the amount appraised by outside independent real estate appraisers.

Note 22. Revenue recognition
1. Information on disaggregated revenue arising from contracts with customers
Millions of yen
Reportable segments

Japan
China
Other Asia
U.S.A.
Other North America
EuropeRevenue from contracts with customers
Revenue from external customers

CS Division

¥

4,393
7,103
3,420
4,289
—
791
19,997¥ 19,997

SCI Division¥ 13,018
2,649
4,997
11,556342
1,917
34,482¥ 34,482

2023

Research &Development
Center

¥

¥

332
3
—
—
—
3
339
339

Subtotal¥ 17,743
9,756
8,418
15,846342
2,711
54,819¥ 54,819¥¥

Others

23
—
—
—
—
—
23
23

Total

¥ 17,767
9,756
8,418
15,846342
2,711
54,842¥ 54,842

Millions of yen
2024

Japan
China
Other Asia
U.S.A.
Other North America
EuropeRevenue from contracts with customers
Revenue from external customers

Japan
China
Other Asia
U.S.A.
Other North America
EuropeRevenue from contracts with customers
Revenue from external customers

CS Division¥

Reportable segments
Research &Development
SCI Division
Center¥ 10,361
2,106
4,125
7,279
108
1,554
25,536¥ 25,536

CS Division

Thousands of U.S. dollars
2024
Reportable segments
Research &Development
SCI Division
CenterSubtotal$ 30,064
51,007
21,71628,373—
4,788
135,962$ 135,962$ 68,430
13,90927,24448,075713
10,264
168,655$ 168,655

¥

¥

$

$

386
0
—
—
—
—
387
387

Subtotal

4,552
7,723
3,288
4,296
—
725
20,586¥ 20,586

2,549
0
—
—
—
—
2,556
2,556

¥ 15,301
9,830
7,414
11,576108
2,279
46,510¥ 46,510$ 101,057
64,923
48,96676,455713
15,052
307,179$ 307,179

¥

¥

$

$

Others

11
—
—
—
—
—
11
11

Others

73
—
—
—
—
—
73
73

Note1: “Others” which includes other parts business is a business segment that is not included in reportable segments.
Note2: The sales by regions is based on customers’ locations and is classified by countries or regions.

24 ANNUAL REPORT 2024

Total

¥ 15,313
9,830
7,414
11,576108
2,279
46,522¥ 46,522

Total$ 101,136
64,923
48,96676,455713
15,052
307,258$ 307,258

2. Information providing a basis for understanding revenue arising from contracts with customers
The Company and its consolidated subsidiaries sell the parts for electro-communication device and electronic equipment inJapan and abroad. The satisfied point of performance obligations is the point in time when the products are delivered to thecustomer because it can be judged that the customer obtains control of the product at the time. However, for sales within
Japan of these products, revenue is recognized at the time of shipment in accordance with the alternative treatment prescribedin Paragraph 98 of “the Implementation Guidance on Accounting Standard for Revenue Recognition”. The consideration fortransactions is generally received within approximately 3 months after delivery of the goods. Furthermore, there is no
adjustment for the significant financing component concerning receivables arising from contracts with customers.
3. Information about the relationship between the satisfaction of performance obligations under contracts with customers andcash flows from these contracts, and the amount and timing of revenue from contracts with existing customers at the end of
the fiscal year that are expected to be recognized in the following fiscal year or beyond(1) Balance of contract assets and contract liabilities

Millions of yen

2024

Thousands of U.S. dollars
2024¥ 12,800¥ 13,176$ 87,022

13,176

13,22287,326

2023

Receivables arising from contracts with customers(balance at the beginning of the year)
Receivables arising from contracts with customers(balance at the end of the year)
Contract liabilities (balance at the beginning of the year)
Contract liabilities (balance at the end of the year)

56
224

¥

¥

224
61

$

1,479
403

Contract liabilities mainly relate to advance payments received from customers for sales of tooling based on payment terms.
Contract liabilities are reversed as revenue is recognized.
The revenue recognized during the fiscal year that was included in the balance of contract liabilities at the beginning of the year
was ¥224 million ($1,479 thousand). The main reasons for the decrease of ¥163 million ($1,077 thousand) in contract liabilities
in the fiscal year were reversal as revenue is recognized.
(2) Transaction price allocated to remaining performance obligations
At the end of the fiscal year ended March 31, 2023, there is no unsatisfied performance obligations which needs to be noted.
Furthermore, the Company and consolidated subsidiaries have been adopted the treatment prescribed in Paragraph 80-22 (1)of “Accounting Standard for Revenue Recognition” (ASBJ statement No.29, March 31, 2020) and the contracts which are
initially expected to terminate within one year are not included in this notes.

Note 23. Segment information(Overview)
The reporting segments of the Company and consolidated subsidiaries are designed as business segments whose segregatedfinancial information can be obtained and to which the management reviews to decide on the allocation of managerial andfinancial resources and to evaluate their financial performance.
The Company and consolidated subsidiaries are primarily engaged in the three divisions as follows;
CS (Connection System) Division: The division produces and sells connectors and jacks.
SCI (Sensing, Communications and Interface) Division: The division produces and sells remote controls, switches, camera
modules and touch sensors.
Research & Development Center: The center produces and sells wireless module and NFC antennas.
The business segment information is prepared in a manner similar to the accounting treatment as described in Note 1. Segment
performance is evaluated based on operating income or loss.
1. Business segment information

CS
Division

2023

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

Reporting Segments
Research &SCI
Development
Division
Center¥19,997—
19,997894
11,805¥34,482—
34,482393
20,007¥

Millions of yen

Subtotal

339 ¥
—
339
(160)
334

54,819—54,8191,127
32,147

Other

¥

23
—
23
1
6,642

¥

Total

Adjustment

Consolidated

54,842—
54,842
1,128
38,790

¥

¥

—
—
—
—
17,57454,842—
54,842
1,128
56,365

1,648

1,059

4

2,712

171

2,884

—

2,884

1,446

653

1

2,101

47

2,149

—

2,149

ANNUAL REPORT 2024 25

CS
Division

2024

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

2024

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

20,586—
20,586
1,095
12,447

Millions of yen

Reporting Segments
Research &SCI
Development
Division
Center

Other

Total

Adjustment

387 ¥
—
387
(184)
387

46,510 ¥—46,510(1,234)
31,171

11 ¥
—
11
(9)
6,628

46,522 ¥—46,522(1,243)37,799

1,478

786

11

2,276

174

2,451

—

2,451

1,035

1,082

9

2,127

163

2,290

—

2,290

Adjustment

Consolidated

73 $ 307,258 $
—
—
—
—
73
307,258—(59)(8,209)—43,775
249,647
136,345$ 307,258—
307,258(8,209)385,998$ 135,962—
135,962
7,232
82,207

Reporting Segments
Research &SCI
Development
Division
Center$ 168,655 $—
168,655(14,167)
121,095————
20,644

Consolidated

25,536 ¥—25,536(2,145)
18,335CS
Division¥

Subtotal¥

46,522—
46,522(1,243)58,444

Thousands of U.S. dollars

SubtotalOther2,556 $ 307,179 $
—
—
2,556
307,179(1,215)(8,150)2,556
205,871

Total

9,762

5,191

73

15,032

1,149

16,188—16,188

6,836

7,146

59

14,048

1,077

15,124—

15,124

Other is business segments not included in the reportable segments. It includes other parts, leasing, property rental and worker
dispatch businesses.
Adjustment includes corporate assets which are not allocable to the reportable segments.
2. Geographical information(1 ) Net sales
2023

Net sales
2024

Net sales
2024

Net salesJapan¥ 17,767¥

Japan¥ 15,313¥

Japan$ 101,136

China

9,756

China

¥

¥

Fixed assets
2024

Fixed assets
2024

Fixed assets

26 ANNUAL REPORT 2024Japan

¥ 10,794¥Japan¥ 10,811
Japan$ 71,402

¥

China

China

China

¥

$ 22,707

¥

342

¥

2,711

North America
U.S.A.
Other¥ 11,576¥

Europe

108

¥

2,279

North America
U.S.A.
Other$ 76,455$

713

Consolidated¥ 54,842
Consolidated¥ 46,522

EuropeConsolidated$ 15,052$ 307,258

Other

786

North
America¥

195

Europe¥Consolidated

9¥ 15,567

Millions of yen

¥

Asia

¥ 15,846

EuropeMillions of yen

Asia

3,438

7,414

$ 48,966

Asia

3,781

Other

Other

(2 ) Fixed assets
2023

8,418

North America
U.S.A.
Other

Thousands of U.S. dollars

Asia$ 64,923

Other

Millions of yen

Asia

9,830

China

Millions of yen

Asia

Other

803

North
America¥219

Europe¥54

Consolidated¥ 15,328

Thousands of U.S. dollars

$

Other

5,303

North
America$

1,446Europe$357

Consolidated$ 101,235

3. Information about major customers
The company and consolidated subsidiaries have no major customers which account for 10% or more of net sales.
4. Information about the loss on impairment of fixed assets
CS Division
SCI Division
Research & Development Center
Subtotal
Other
Adjustments and eliminations
Consolidated

Millions of yen

2023

¥

32
484
0
517
—
—
517

¥

¥

¥

Thousands of U.S. dollars
2024

2024

23
529
9
562
—
—
562

$

152
3,494
59
3,712
—
—
$ 3,712

5. Information about the amortization of goodwill and the balance of goodwill
For the years ended March 31, 2023 and 2024, there was no amortization and balance of goodwill.

Note 24. Related party transactions
Significant transactions with related parties for the years ended March 31, 2023 and 2024 were as follows:
Transactions

2023

Terutaka Ikeda (Supreme corporate adviser)¥

Millions of yen

Balances
Other
Other
current
investments
assets

Rent

14

¥

14

¥

1

Millions of yen

Paul Evans (Director)

Transactions
Collection ofInterest
loan
receivable
income¥4¥

Transactions

2024

Terutaka Ikeda (Supreme corporate adviser)¥

1

Balances
Other
Long-term
current
loans
assetsreceivable

¥

2

¥

27

Millions of yen

Balances
Other
Other
current
investments
assets

Rent

14

¥

14

¥

1

Millions of yen

Paul Evans (Director)

Transactions
Collection ofInterest
loan
incomereceivable

¥

4

¥

0

Balances
Other
Long-term
current
loans
assetsreceivable

¥

2

¥

26

Thousands of U.S. dollars

Transactions

2024

Balances
Other
Other
current
investments
assetsRent

Terutaka Ikeda (Supreme corporate adviser)

$

92

$

92

$

7

Thousands of U.S. dollars

Paul Evans (Director)

Transactions
Collectionof loanInterest
receivable
income

$

26

$

0

Balances
Other
Long-term
current
loans
assetsreceivable

$

13

$ 172

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

Note 25. Subsequent Events
There were no subsequent events for the year ended March 31, 2024.

ANNUAL REPORT 2024 27

Officer Introduction(As of June 25, 2024)

Directors

Masanobu Ikeo

Paul Evans

Director andExecutive Deputy President,
Chief Technology Officer

Director andExecutive Vice President

Yasumitsu Ikeda

President,
Chief Executive Officer andChief Operating Officer

Tetsuo Hara

Director andExecutive Vice President

Toshio Nakamura
Director (Outside)

Kaoru Ishikawa
Director (Outside)

Auditors

Kohei Ohgaki

Naru Nakashima

Fumio Nishimura

Hiroshi Usami

Mitsuyuki Masubuchi

Fumikazu Hata

Mikio Otsubo

Hideo Sugano

Takashi Ito

Full-Time Auditor

Auditor (Outside)

Auditor (Outside)

Corporate Executive Officers

Executive Vice President,
Chief Information Officer

Vice President

28 ANNUAL REPORT 2024

Vice President

Vice President

Vice President

Vice President

Itaru kitahiraVice President,
Chief Financial Officer

Corporate Information(As of March 31, 2024)

Corporate Data

Shares and Shareholders

Name

SMK Corporation

Established

April 3, 1925

Registered

January 15, 1929

Primary business

Manufacture, sale of various partsfor electro-communication device
and electronic equipment
and provision of related services

Capital¥ 7,996,828,021

Stock exchange listing

Tokyo Stock Exchange

Administrator ofshareholders register

Mitsubishi UFJ Trust and Banking
Corporation

Independent auditors

Ernst & Young ShinNihon LLC
Tokyo, Japan

Employees (Consolidated)

4,104

Global network（As of July 31, 2024）

Japanese domestic
basesTokyo（Head office）, Toyama,
Hitachi, Osaka, Nagoya, Ibaraki
and Fukuoka

Overseas bases

Taiwan, China, Singapore,
Thailand, Malaysia, Philippines,
Korea, Ireland, U.K., France,
Germany, Belgium, U.S.A. andMexico（7 sites）（28 sites）

Authorized shares

19,596,127
7,200,000(including 846,508 shares of treasury stock)

Issued shares
Number of shareholders

Major shareholders (top ten)

6,006
Shares owned(1,000 shares)

Percentage ofshares (%)

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

612

9.65

SMK Cooperating Company Share
Holding Association

518

8.17

The Showa Ikeda Memorial Foundation

359

5.66

Dai Nippon Printing Co., Ltd.

320

5.04

Nippon Life Insurance Company

307

4.84

SMK Employees Share Holding Association

269

4.24

Mizuho Bank, Ltd.

167

2.64

Custody Bank of Japan, Ltd. (Trust Account)

150

2.37

Meiji Yasuda Life Insurance Company

137

2.17

Terutaka Ikeda

130

2.05

Note: The Company holds 846 thousand shares of treasury stock,
but is excluded from the above list. Figures for percentage ofshares are calculated after subtracting the number of treasury
stock. The number of treasury stock includes the 40 thousand
shares of the Company held by the Officer Stock Benefit Trust.

Share ownership by shareholder type
Financial institutions

22.90%

Financial instruments dealers

1.50%

Other entities

16.86%

Foreign entities, etc.

5.71%

Individuals and others

53.04%

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

Head Office

WebsiteToyama Works

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

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

SMK CORPORATION
5-5, Togoshi 6-chome, Shinagawa-ku, Tokyo 142-8511, JAPAN
Phone +81-3-3785-1111