74th Fiscal Term

Annual Report

From April 1, 2020 to March 31, 2021

To Our Shareholders

We will expand our “connecting business” based on our growth in FY2020.
During FY2020, there were various restrictions on activities throughout the year due to the novel coronavirus disease (COVID-19), but for
performance, orders and sales both reached their highest level thus far thanks to the effort of everyone involved, such as employees.
In particular, products for the general industrial equipment and automotive markets have recovered since the second half, and the three
primary areas, which includes the smartphone, consumer market, exceeded initial expectations. This has been a year in which we have had
to seek new corporate activities, such as the usage of IT tools as the conventional face-to-face sales activities have become difficult due tomovement restrictions because of COVID-19.
Although new initiatives are being advanced, R&D and capital investment have decreased from previous years, and have been deemed as
insufficient for our original activities.
Moreover, even amid these circumstances, we recognize that the speed at which the macroenvironment changes is accelerating further, andthat difficulties are increasing in the competitive environment.
We will further advance the strengthening of measures for the future based on growth in FY2020.

■For ongoing growth in the medium to long term
Difficulties in the business environment are continuing, but the advancement of digital transformation and IoT have accelerated due tolifestyle changes.
We believe that the connector industry, which is a connecting business, has a lot of potential as the next generation will be a generation
where everything is connected.
The market where connectors can play an active role is currently expanding, from smartphones, which everyone has on hand, to theinfrastructure that supports society.
We believe that it is important to refine our ability to ascertain the technologies that may lead the next generation as new technology
continues to be created regularly throughout the world.
We will increase our ability to sense and respond so that we do not overlook promising points of change in the market in the future, andrespond with a sense of urgency to create new business opportunities.
Moreover, for ongoing growth, we are aiming to establish a corporate structure that is capable of responding to changes due to its wellbalanced business structure.
HIROSE ELECTRIC works to be able to respond to a variety of customers’ needs as it has a wide-variety of connectors, from those for thefamiliar consumer devices to those for automobiles and industrial infrastructure.
Furthermore, we are working to increase its ability to propose advanced and cutting edge products and the differentiated products throughcross-cutting activities between fields.
With the aim of sustainable corporate growth, we will strengthen ESG response and advance initiatives to achieves SDGs.
Connectors contribute to resource conservation and a low-carbon society as they play the roles of maintaining and extending electronicequipment.
We will continue to work so that HIROSE ELECTRIC’s connectors can be even more helpful for a sustainable society in the future.

1

■To Our Shareholders
We announced the new shareholder return policy in May.
We will aim to reduce equity and achieve ROE of 8% by FY2024 by improving profitability in accordance with the Mid-term Growth Strategy,
and expanding investments in order to further expand business and shareholder return policies.
The shareholder return policy is carried out with a basic policy of (1) having a dividend payout ratio of 50% for FY2021 to FY2024 and (2)acquiring treasury shares between FY2021 and FY2024 with an upper limit of ¥40.0 billion.
Furthermore, the Company will transition to a company with Audit & Supervisory Committee.
This transition aims to establish an audit and supervisory committee, the majority of whose members are Outside Directors, and further
enhance corporate governance through the strengthening of the supervisory function of the Board of Directors and the strengthening of theaudit and supervisory functions for the legality and appropriateness of business execution by granting voting rights in the Board of Directors
to Directors who are audit and supervisory committee members.
Due to the impact of COVID-19, the end of which is still unable to be seen, many of you have spent your time enduring a lack of freedom.
First, we hope that all of you can give the utmost consideration to your health.
We also express our heartfelt sympathies to those who have been affected by COVID-19, and pray that everyone will recover as soon as possible.
Kazunori Ishii, President and Representative Director(Photo: HIROSE ELECTRIC Photo Club)2

Financial Highlights■ Sales■ Operating profit■ Profit attributable to owners of parent

Millions of yen

Millions of yen

Millions of yen

140,000

InterimFull year
133,538

124,590

30,000InterimFull year

25,000InterimFull year

27,885

121,765

120,000

25,000100,000

17,891

20,35820,00019,91620,00023,15715,30515,00080,00061,96360,00060,26561,03615,00012,022

12,893
11,53410,000

9,325

9,338

8,573

10,00040,000

0

0
72nd

73rd

600

Interim

0
72nd

74th

■ Basic earnings per share
Yen

5,000

5,000

20,00073rd■ ‌Equity attributable to owners of parent to total assets ratio& Operating profit to sales ratio%

Full year

100

72nd

74th

Equity attributable to owners of parent to total assets ratio
Operating profit to sales ratio

73rd

74th

240

240

■ Dividends per share
Yen
300

InterimFull year

549.1090
500

489.46

90.0

89.3

88.0

80
420.39

70

400

250

240

200

60
300
254.91

235.12257.48

50

150

40

200

20
18.6
10

0

3

20.9
16.7

0
72nd

73rd

74th

120

120

72nd

73rd

74th

100

30

100

120

50

0
72nd

73rd

74th

Overview of Consolidated Statements of Financial PositionPrevious fiscal year
As of March 31, 2020

Cash andcash equivalents
50,561

Trade andother receivables
30,444
Property, plantand equipment
61,541Intangible assets
2,519
Other financial
assets50,141

Current fiscal year

Previous fiscal year

As of March 31, 2021

As of March 31, 2020

Total assets
Total assets

342,644

Current
assets220,672(Millions of yen)

370,504

Current fiscal year
As of March 31, 2021
Total liabilities
and equity

Total liabilities
and equity

Cash andcash equivalents
57,837

370,504

342,644

Liabilities

Liabilities

Trade andother receivables
36,620Current
assets248,047

Non-current
assetsNon-current
assets121,972

122,457

44,41236,503

Property, plantand equipment
61,182EquityEquityEquityattributableto owners ofparent to total
assets ratio
89.3%

Intangible assets
3,295
Other financial
assets48,918326,092

306,141

Overview of Consolidated Statements of Income

Equityattributableto owners ofparent to total
assets ratio
88.0%(Millions of yen)Previous fiscal year

Current fiscal year

From April 1, 2019
to March 31, 2020

From April 1, 2020
to March 31, 2021

Sales

Sales

133,538
121,765
27,885

Operatingprofit tosales ratio

16.7%

Profit attributableto owners of parent
15,305

Operating profit
20,358Operatingprofit tosales ratio

20.9%

Income tax expense
8,416

Finance income
1,051

Finance costs
604
Operating profit

Profit before tax
28,332

Profit attributableto owners of parent
19,916

4

HIROSE’s Connector Workshop

Steps to creating a connector■ Steps to creating a connector
Product design(1) Product design(2) Analysis

Mold design

Produce parts

AssembleComplete

Process for actually creating products
Analyze how the connector will operate before creating the product■ What is analysis?
The connector’s role is to correctly connect electronic equipment to signals and electricity regardless of the environment such as heat, cold or vibration.
In the analysis, before actually creating products, we conduct a virtual test of the connector’s characteristics for the anticipated environment in which thecustomer’s equipment will be used, verify the design and analyze the cause of malfunction. Some people may have seen endurance tests on television,etc. for what happens when products are dropped. The analysis is undertaken by creating a 3D model of the connector and using software to conductvarious tests such as this. Undertaking the analysis before creating the product reduces the risk, which also leads to a reduction in cost and lead time for
product development. It is an important part of the design process.

■ Analysis process
Choice of analysis simulation(1) Electromagnetic field analysis(2) Thermal conductivity analysis(3) Mold flow analysis
We create a 3D model of the connector
using CAD. Since we analyze the state when
the product is used by the customer, we not
only create the 3D model based on theconnector but also based on aspects such as
the customer’s printed circuit board information.

(4) Structural analysis
Enter the terms and conditions for the
analysis such as temperature and vibration.
HIROSE ELECTRIC primarily conducts fourtypes of analyses.

Analysis by scanning the 3D model into
software. Analysis usually takes from a few
hours to about 1 day.
Verify the connector design and optimize
based on the results of the analysis.

Even though analysis is undertaken by software…
The type of metal and spring properties for the connector differ according to the product. For example, when using a connector with metal of a particularspring property, it may deform and break depending on the usage conditions. Unless data suitable for HIROSE ELECTRIC’s connector design is measured andset as a condition in the software, the results may differ from when measured with the actual connector. Many steps are required before starting the analysis
such as measuring and entering parameters in order to generate more accurate results of the analysis as well.
5

■ We analyze this type of thing!
Thermal conductivity analysis
Customers want connectors thatare small and can also cope with
rapid charging!

Connectors use metal pins to conduct electricity. When electric current flows through the pins such as when recharging,
the pins become hot because they are made of metal. Small connector pins are as small as 0.2mm in width and are verythin pieces of metal. The smaller the metal, the easier their heat retention, while rapid charging means there are large
currents flows. In other words, the temperature of the connector tends to rise. If the connector generates heat, it can leadto fire in nearby electronic components, so we analyze the state for increased temperature.
Flexible printed circuit

We also create a 3D model of the printed circuit board that is connected to the connector for analysis of increased
temperature in the vicinity of the connector. We change the magnitude of the current with the software and check the change
in temperature. We repeat the analysis to suppress the temperature rise to within the customer’s request, and propose thebest current magnitude and number of pins, etc. Demand for rapid charging has recently increased. The struggle between small
connectors and heat continues, but we resolve each and every problem faced by the customer with high analytical technology.

Structural analysis

Connector

Printed circuit board

Connector

Customers want the connector lock to
be strengthened while also wantingease of plugging and unplugging!

If the connector becomes unplugged, the signal and current will not pass and be the cause of a malfunction.
So a protrusion known as a latch is attached to the connector in a way that makes it difficult for the connector
to come out. While there are advantages in making this lock strong to reduce the risk of malfunction, there arealso concerns that making it too strong could lead to damage when unplugging the connector for servicing,etc. So, we analyze what sort of cracking occurs according to the level of added strength.
Customer chassis

To reduce the time taken to conduct an analysis, we analyze by modeling only the latch
component which is the part we want to learn about concerning the addition of strength. First,
we investigate what level of strength needs to be applied to damage the connector. Then, we
analyze where the cracks start to form depending on where the strength is applied. If we know
the cause, we test various forms for both the connector and the customer chassis respectively.
We search for a form that does not easily start to crack and determine the best form.

■ The future for HIROSE ELECTRIC’s Simulation Section
In future, we will conduct wide-ranging analysis not just of connectors, but including customer equipment that uses connectors. We must win the trustof customers in HIROSE ELECTRIC’s analysis by increasing the accuracy of analysis. To this end, we need to accumulate a track-record in the verificationof external research information and the results of actual measurements. Collecting data allows us to forecast various phenomenon that occur withconnectors, which will enable us to make proposals that highlight aspects such as contact reliability and waterproof characteristics of connectors as
points of differentiation when choosing HIROSE ELECTRIC’s connectors. Analysis is an extremely important process for “visualization” of malfunctions
that had not been visible before, as if it were noise. The Simulation Section will also make a major contribution in future to creating higher quality
connectors in a shorter period of time.
6Overview by Product Segment

Multi-Pin Connectors

Sales¥119,752

89.7%
million (up 10.9% year on year)

Our flagship multi-pin connectors include a variety of connector types such as circularand rectangular connectors, connectors for ribbon cables, connectors used for printed
circuit boards including FPCs (flexible printed circuit boards) and nylon connectors.
The major applications of these connectors include a wide range of fields such as
smartphones, communications equipment and automotive electronics, as well as
industrial fields such as measuring and control equipment, FA equipment and medical
electronics equipment. Further expansion in demand is expected along with the further
development of a sophisticated information and communications networked society
and an eco-friendly, energy conservation-oriented society.
Segment sales for the year under review increased by 10.9% year on year to ¥119,752
million and operating profit increased by 35.5% year on year to ¥26,295 million.

Coaxial Connectors

Sales¥9,492

Sales¥4,294

100,000

50,0000108,014

119,752

53,31354,475

73rd

74th

7.1%
■ Interim

Sales (Millions of yen)

□ Full year

12,000
9,784

9,492

4,982

4,601

73rd

74th

8,000

4,000

0

3.2%
million (up 8.3% year on year)

The other products segment includes micro switches and instruments for connectors.
Segment sales for the year under review increased by 8.3% year on year to ¥4,294
million and operating profit increased by 54.5% year on year to ¥178 million.

■ Interim

Sales (Millions of yen)
6,000

4,294

4,000

3,967

2,000

1,970

1,960

73rd

74th

0

7

□ Full year

150,000

million (down 3.0% year on year)

Coaxial connectors are a special type of high-performance connector used primarily for
microwave and other high-frequency signals. Their applications include antennaconnections for wireless LAN and Bluetooth communication used in smartphones andPCs, and as GPS antenna connections for automobiles as well as for connecting highfrequency signals in wireless communication devices and electronic measuring
equipment. Optical fiber connectors and coaxial switches are also included in thissegment.
Segment sales for the year under review decreased by 3.0% year on year to ¥9,492
million and operating profit increased by 68.7% year on year to ¥1,412 million.

Other Products■ Interim

Sales (Millions of yen)

□ Full year

Introduction of Our Products
ZH05 Series
The ZH05 Series is a board-to-cable connector that adopts the industry’s first short/electric shock
prevention structure in addition to in-vehicle quality of heat resistance up to 125°C and highvibration resistance. Demand for electric vehicles and storage batteries has surged as a sign of therealization of a carbon neutral society, and the battery pack is one key device. When manufacturing
the battery pack, it is assembled stored with electricity, so the safety and reliability of the connection
operations is an issue. ZH05 Series has a proprietary structure that can prevent damage andunforeseen fire accidents from shorting between adjacent pins and can also prevent electrical shockshould an operator touch a pin. We are contributing to the realization of a carbon neutral society by
resolving issues in the manufacture of key devices such as battery packs.

FH58 Series
IoT equipment and wearable devices continue to evolve and the data processing volume in each typeof module and semiconductor used in terminals is growing. There is a growing need for multi-pin FPC
connectors as well as a growing need for multifunctionality and space reduction in the internal
design of such terminals. This product pursues reduced space with pins in a staggered array structureof 0.2mm pitch (mounting pitch 0.4mm) and narrow depth. We are achieving “excellent handlingproperties” and “high reliability” based on our track-record in development of the traditional backflip type. In addition, giving considering to mounting in high density areas, we can also
simultaneously propose FPC insertion and moveable opening/closing jigs. Currently, we areconsidering further multipolarisation and contributing to the multifunctionality and smaller size ofwearable devices as a standard connector for reduced spaces.

TJ*L SeriesThis Series was developed as an interface connector for the ethernet communication networks forrailways. It has been adopted by the new Shinkansen N700S, which was first put into service by theCentral Japan Railway Company in July 2020. The traditional connectors used in trains are mainly
made of metal and locked through tightening, but they are hard to operate and the screw tightening
requires management. This Series improves the operability with a snap-in lock eliminating the need to
manage screws that become loose, which is a concern with the screw fastening type. In addition,
because the connector is made of resin, we contribute to the reduction of the weight of the mounted
equipment. HIROSE ELECTRIC’s connectors have been used in many Shinkansen and conventional
trains apart from the N700S, so we also contribute to the railroad sector, which in turn supports
peoples’ lives.

8

Group Network◎Domestic bases
TOHOKU HIROSE ELECTRIC CO., LTD.

Gotanda Office

ICHINOSEKI HIROSE ELECTRIC CO., LTD.
Kikuna Office

KORIYAMA HIROSE ELECTRIC CO., LTD.
Head OfficeKansai BranchWest Japan Sales Office

Chubu Sales Office

Kitakanto Sales Office◎Overseas bases
HIROSE ELECTRIC EUROPE B.V.
Hirose Electric (China) Co., Ltd.
HIROSE ELECTRIC (SUZHOU) CO., LTD.

HIROSE KOREA CO., LTD.
HIROSE ELECTRIC (DONGGUAN) CO., LTD.
HIROSE ELECTRIC INDIA. PVT. LTD.
HIROSE ELECTRIC (U.S.A.), INC.

HIROSE ELECTRIC MALAYSIA SDN. BHD.

HIROSE ELECTRIC TAIWAN CO., LTD.
HIROSE ELECTRIC SINGAPORE PTE. LTD.

9

P.T. HIROSE ELECTRIC INDONESIAHIROSE ELECTRIC HONG KONG CO., LTD.
HIROSE ELECTRIC HONG KONG TRADING CO., LTD.

Corporate Data

Company Profile (As of March 31, 2021)

Stock Information (As of March 31, 2021)

Trade name

HIROSE ELECTRIC CO., LTD.

Total number of shares issued

Date of incorporation

June 15, 1948

Number of employees

Consolidated: 4,859 (excluding part-timers)(Excluding 1,891,247 shares of treasury shares)
Number of shareholders
3,573

Capital stock¥9‚404‚379‚401

Directors (As of June 25, 2021)

36,284,695 shares

Major Shareholders (Top 10)

Kazunori Ishii
Mitsuo Nakamura
Director
Yukio Kiriya
Director
Hiroshi SatohDirector
Shin Kamagata
Director
Jun Inasaka
Director
Sang-Yeob Lee
Outside Director
Kensuke Hotta
Outside Director
Tetsuji Motonaga
Outside Director
Masanori Nishimatsu
Director (Standing Audit & Supervisory Committee Member) Yoshikazu Chiba
Outside Director (Audit & Supervisory Committee Member) Terukazu Sugishima
Outside Director (Audit & Supervisory Committee Member) Kentaro Miura
President and Representative Director

Number ofshares held

Name of shareholder

Senior Managing Director

Note:
Outside Directors Kensuke Hotta, Tetsuji Motonaga, Masanori Nishimatsu,
Terukazu Sugishima and Kentaro Miura are Independent Officers who areunlikely to have any conflicts of interest with general shareholders, and are
required to be designated by the Tokyo Stock Exchange.

Accounting Auditor

KPMG AZSA LLC

Hundreds of shares

Hirose Foundation
State Street Bank and Trust Company 505223
The Master Trust Bank of Japan, Ltd. (Trust Account)
JPMorgan Chase Bank 380055
Custody Bank of Japan, Ltd. (Trust Account No. 4)
Custody Bank of Japan, Ltd. (Trust Account)
HS Kikaku Co., Ltd.
Mizuho Trust & Banking Co., Ltd. Trust Account 0700093
Mizuho Trust & Banking Co., Ltd. Trust Account 0700094
National Mutual Insurance Federation of Agricultural Cooperatives

31,476
29,51325,601
25,005
19,936
16,32012,215
8,707
8,652
8,146

Note: ‌In addition to the 10 major shareholders above, the Company owns 18,912 hundred
shares of treasury shares.

Distribution of Shares
Distribution of Shares by Shareholder Type
Individuals, etc./2,783 persons
33,956 hundred shares (8.90%)

Financial institutions/43 persons
128,899 hundred shares (33.76%)
Securities companies/32 persons
5,664 hundred shares (1.48%)

Foreign corporations, etc./548 persons
157,513 hundred shares (41.26%)

Other corporations/167 persons
55,725 hundred shares (14.60%)

10

Shareholder information
Fiscal term

From April 1 of a calendar year to March 31 of the next calendar year

Ordinary General
June every year
Meeting of Shareholders
Record dateOrdinary General Meeting of Shareholders: March 31 every year
Year-end dividend: March 31 every year
Interim dividend: September 30 every year
(As required, another record date may be decided with prior public
notice.)[Share-related notifications and inquiries regarding change of address, etc.]
Shareholders who have accounts at securities companies are requested to direct their notifications
and inquiries regarding change of address, etc., to their respective securities companies where
shareholders have their accounts. Shareholders who do not have accounts at securities companies
are requested to call the telephone number as stated below.
Number of shares in one 100
voting unit
Method of public notices The Company’s Web site below shall be used for its public notices.
〈https://www.hirose.com/corporate/ja/ir〉
If an electronic public notice should fail due to accident or any otherunavoidable circumstances, the Company shall post a public notice in
the Nihon Keizai Shimbun.
Shareholders’ registermanager and accountmanagement institution
for special accounts

Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Handling office ofshareholders’ registryadministrator

Securities Agency Department,
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo(Mailing address)
Phone:

Securities Agency Department,
Sumitomo Mitsui Trust Bank, Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo 168-0063
0120-782-031 (Toll free, available only in Japan)

URL:

https://www.smtb.jp/personal/agency/index.html[Special accounts]
For shareholders who was yet to have used JASDEC (Japan Securities Depository Center, Inc.) by theshare certificate dematerialization date, the Company opened a transfer account (hereinafter “special
account”) at Sumitomo Mitsui Trust Bank, Limited, as mentioned above, which serves as theshareholders’ registry administrator. You are requested to use the above telephone number when
making inquiries about the special account and notifications of matters such as change of address.

Recommended Contents ofthe HIROSE Website

1. H‌ irose Virtual
Discovery EXPO 2021
(Available for a limitedtime)

2. ‌Optimal Solutions forElectrical Equipment in
Buildings Introduction
Example of EF2 Series

3. Connector Q&A
Teach me! Dr. H

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