66th Fiscal Term

Annual Report

From April 1, 2012 to March 31, 2013

HIROSE ELECTRIC CO., LTD.

HIROSEELECTRIC
CO.,LTD.

To Our Shareholders

We are pleased to report the results of operations for fiscal 2012,
the year ended March 31, 2013 (the 66th fiscal term, from April 1,2012 to March 31, 2013).

Chairman and
Representative Director

Business Overview
During the year ended March 31, 2013, the momentum toward
recovery remained unclear for the Japanese economy, considerably
affected by the lingering debt crisis in Europe and the slowdown in
the growth rate of the Chinese economy, which was triggered by
the aforementioned European financial concerns, although a trendof gradual recovery was expected at the beginning of the year
against a backdrop of demand for reconstruction.
Meanwhile, yen appreciation, which had an adverse impact
especially on the business performance of export-related
corporations, turned around with a depreciating yen and risingstock prices from the start of the new domestic administration at
the end of last year, bringing about bright expectations forbusiness prospects.
In such a business environment, the Hirose Electric Group was
active in expanding its global business while enhancing the alliancewith HIROSE KOREA CO., LTD., which the Company converted
into a consolidated subsidiary in December 2010 and raised its
investment ratio to 97% in November 2012, in diverse aspects ofsales, development and production. We also continued to reinforce
our development and sales systems for high-value-added productsin the pursuit of swifter responses to increasingly sophisticatedmarket needs. This significant role has been mainly shouldered at

President andVice Chairman and
Representative Director Representative Director

Tatsuro Nakamura Kazunori Ishii

Sakae Kushida

Financial Highlights■ Net sales■ Ordinary income■ Net income

Millions of yen
120,000

Millions of yen
30,000Millions of yen
15,00013,306 13,266

100,000

89,872

84,46892,44094,79095,93880,00020,00060,00015,00040,00010,00020,0005,000

020,77621,99922,73920,919

2010

2011

2012

2013

11,714

22,386

12,824

13,50810,000

5,000

0
2009

1

25,000

0

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

the Yokohama Center, a new company building located in Tsuzukiku, Yokohama, into which the Product Development, Engineering,
Sales & Marketing Divisions and other functions were consolidated
in December 2011.
As a result, consolidated net sales for the year under review
amounted to ¥95,938 million, an increase of 1.2% from a year earlier.
Operating income increased 7.3% to ¥2 0,9 8 5 million, ordinary
income rose 7.0% to ¥22,386 million and net income advanced 5.3%
to ¥1 3,5 0 8 million. Thus, the Group recorded year-over-yearincreases in both revenue and profit.
The management environment in which the Group operates isforecast to remain uncertain amid concern over the lingering debt
crisis in Europe, although the depreciating yen and rising stock
prices continue and several signs of recovery have emerged,
reflecting the expectations of favorable effects from the economic
stimulus policies taken by the new government.
Moreover, the quantitative expansion of smartphones, mobile
phones and tablet PCs; further sales growth in the automobile fieldalong with an expansion in automotive electronics; and the growthof the industrial machinery/equipment and communications fields
are anticipated. On the other hand, intensifying competition due tocustomers’preference for lower-priced products is expected toaccelerate.
In this tough business environment, the Group intends topursue leading-edge technologies, conduct more efficient
distribution and concentration of resources and consistently carryout reforms and innovations. Such aggressive initiatives also

■ Net income per share
yen
500
400

356.59363.15330.23366.11

390.48include the reinforcement of high-value-added product development
capabilities to meet market needs, the promotion of manufacturing
efficiency and further improvement of product quality, all of which
would serve to improve our cost competitiveness. At the sametime, we are determined to strengthen our managementfoundations toward profitable growth and improve our corporate
value through efforts to promote globalization, including theinitiative to focus on the diversification of risk at production bases,
and exploit domestic and overseas sales channels.
We look forward to your continued support andencouragement.
June 2013

Tatsuro Nakamura
Chairman and Representative Director■ Equity ratio & Ordinary income ratio to sales■ Net assets per share

%
100

yen
8,000

Equity ratio

Ordinary income ratio to sales

90

7,000

80

6,000

70

300
200

60

5,000

50

4,000

40

3,000

30

0
2009

2010

2011

2012

2013

6,649

6,837

2009

2010

2011

2012

7,277

1,000

10
0

6,463

2,000

20

100

6,271

0

2009

2010

2011

2012

2013

2013

2

Overview by Product Segment

Multi-Pin Connectors

Our flagship multi-pin connectors include avariety of connector types such as circular andrectangular connectors, connectors for ribbon
cables, connectors used for printed circuitboards including FPCs (flexible printed circuitboards) and nylon connectors.
The major applications of these connectors
include a wide range of fields such ass m a r t p h o n e s a n d m o b il e p h o n e s , di g i t a linformation consumer electronics, PCs,
communications equipment and automotive
electronics, as well as industrial fields such asmeasuring and control equipment, FA equipment
and medical electronics equipment. Further
expansion in demand is expected along with the3further development of a sophisticatedinformation and communications networked
society and an eco-friendly, energy conservationoriented society.
Consolidated segment sales for the year
under review increased 1.9% year over year to¥7 7,1 4 8 million and operating income rose
11.3% to ¥17,532 million due to steady salesof our products in the automobile field, as wellas in the field of smartphones and mobile
phones centering on those slated for South
Korea and China, despite sluggish sales forapplications in the industrial machiner y /equipment field.

Coaxial Connectors

Coaxial connectors are a special type of highperformance connector used primarily for
microwave and other high-frequency signals. Theirapplications include microwave communications
devices, satellite communications equipment,
electronic measuring instruments, smartphones
and mobile phones, and switching andtransmission equipment and other electronicequipment. Optical fiber connectors and coaxial
switches are also included in this segment.
Consolidated segment sales for the year
under review decreased 7.7% year over year to¥13,786 million and operating income declined
15.6% to ¥3,176 million.

Other Products

The other products segment includes medical electronics
equipment such as interference wave EMSs, micro switches andinstruments for connectors.
Consolidated segment sales for the year under review increased
20.6% year over year to ¥5,003 million and operating income
surged 646.2% to ¥275 million.

4

Consolidated Financial Statements
Consolidated Balance Sheets
Account item

(Millions of yen)

Consolidated Statements of Income

As of March 31, 2013 As of March 31, 2012

(Assets)
Current assets

180,817

172,064

Fixed assets

97,06389,421

31,022

26,448Property, plant and equipment

From April 1, 2012 From April 1, 2011
to March 31, 2013 to March 31, 2012

Account item
Net sales

95,93894,790

Cost of sales

55,451

56,166Gross profit

40,486

38,623

19,501

19,069Selling, general and administrative expenses

20,985

19,554

Other income

Operating income

1,507

1,450

Other expenses

106

85

Intangible assets

1,191

1,511

Investments and other assets

64,85061,461

Ordinary income

22,386

20,919277,881

261,486

Extraordinary income

138

1,025

Extraordinary loss

327

385

Income before income taxes

22,197

21,5597,269

Total assets(Liabilities)
Current liabilities

21,73019,231

Provision for income taxes―Current

7,468

Long-term liabilities

4,084

2,652

Provision for income taxes―Deferred

692

1,070

14,035

13,220Total liabilities

25,81521,884(Net assets)

Income before minority interests
Minority interest in income
Net income

Shareholders’equity

247,310

238,704

Common stock

9,404

9,404

Additional paid-in capital

14,365

14,371Retained earnings

278,804

269,620

Treasury stock, at cost

△55,263△54,692526

395

13,50812,824

Note: Amounts less than ¥1 million are truncated.

Consolidated Statements of Cash Flows (Millions of yen)
From April 1, 2012 From April 1, 2011
to March 31, 2013 to March 31, 2012

Account item
Operating activities

26,37021,050Investing activities△19,677△10,852

Financing activities△4,994△10,679

4,152△2,101

Stock acquisition rights

74

63

Effect of exchange rate change on cash and cash equivalents

1,861

△76

Minority interests

529

2,936

Net increase/decrease in cash and cash equivalents

3,559

△558

Total net assets

252,066

239,601

Cash and cash equivalents, beginning of the year

41,99242,435

Increase in cash and cash equivalents from newly consolidated subsidiary―

115

Total liabilities and net assets

277,881

261,486

Cash and cash equivalents, end of the year

45,551

41,992

Accumulated other comprehensive income

Note: Amounts less than ¥1 million are truncated.

Note: Amounts less than ¥1 million are truncated.

Consolidated Statement of Changes in Net Assets (From April 1, 2012 to March 31, 2013)	
Item
Balance at April 1, 2012
Total amount of changes during the period
Dividends from surplus
Net income for the period
Acquisition of treasury stock
Disposal of treasury stock
Net amount of changes during theperiod other than shareholders’equity
Total amount of changes during the period
Balance at March 31, 2013

(Millions of yen)

Stock
Shareholders’equity
Accumulated other comprehensive income
CommonAdditional
Retained
Treasury
Total shareholders’ Valuation difference Foreign currency Total accumulated acquisition
on available-for-saletranslation
other comprehensive
rightsstock
paid-in capital earnings stock, at costequitysecurities
adjustment
income9,404
14,371
269,620△54,692
238,704
2,394△4,496△2,101
63△4,325
13,508
△6

―
9,404

△6
14,365

Note: Amounts less than ¥1 million are truncated.

5(Millions of yen)

9,183
278,804

Minority
interests

Total net
assets2,936

239,601△817
246△4,325
13,508
△817
240

―
―
―
―

△4,325
13,508
△817
240

―

989

5,264

6,254

11

△2,4063,858△570△55,2638,606
247,310

989
3,384

5,264
767

6,254
4,152

11
74

△2,406529

12,464
252,066

Nonconsolidated Financial Statements
Nonconsolidated Balance Sheets
Account item

(Millions of yen)

As of March 31, 2013 As of March 31, 2012

(Assets)
Current assets

98,38898,336

Fixed assets

59,26853,84915,642

14,788933

1,104

42,691

37,956

157,657

152,186

Current liabilities

11,355

10,521Long-term liabilities

1,410

799

Total liabilities

12,765

11,320Property, plant and equipment
Intangible assets
Investments and other assets
Total assets

Nonconsolidated Statements of Income (Millions of yen)
From April 1, 2012
to March 31, 2013

From April 1, 2011
to March 31, 2012

Net sales

70,82576,055

Cost of sales

47,796

51,107Gross profit

23,02824,94813,864

14,1889,164

10,759Other income

5,045

4,196

Other expenses

1,224

1,666

12,985

13,289Extraordinary income―

933

Extraordinary loss

286

273

Income before income taxes

12,698

13,948Provision for income taxes－Current

4,648

5,143

Provision for income taxes－Deferred

122

663

7,927

8,141

Account item

Selling, general and administrative expenses

Operating income(Liabilities)

Ordinary income(Net assets)
Shareholders’equity

141,451

138,426

Common stock

9,404

9,404

Additional paid-in capital

14,365

14,371Retained earnings

172,944

169,342

Treasury stock, at cost

△55,263△54,692

3,366

2,376

74

63

Total net assets

144,891

140,865

Total liabilities and net assets

157,657

152,186

Valuation, translation adjustments and others
Stock acquisition rights

Note: Amounts less than ¥1 million are truncated.

Net income

Note: Amounts less than ¥1 million are truncated.

6

Introduction of Our New ProductsNew
products

The Company launches many new products every year into the market. The following product series arepart of our recent introductions.
DF62 Series
These DF62 series relay connectors featuring slim and smooth profiles are
suitable for wiring in narrow spots. Their lattice-shaped terminal arrangement has
made width across corners shorter than before so that the connectors can easily
pass through narrow spaces. While realizing compact sizes, their original terminal
construction and lock system ensure high operability and contact reliability,
thereby making the series connectors applicable in various fields for diverse
machines and equipment from industry machinery to consumer use equipment.

IT5 Series
These board-to-board connectors are compatible with high-speed signals that have 25 Gbps or higher
transmission rates. They were developed to cope with the demand for the higher speed and larger capacityof communication equipment/devices resulting from the explosive increase in data traffic associated withthe rapid popularization of smartphones and cloud services. Our original BGA (ball grid array) technology
and 3-piece-connected configuration have realized high-speed transmission rates and high-density
mounting to ensure excellent mounting capacity for multiple uses. Abundant variations are available withboard-to-board height of 14 mm–40 mm and cores 100 mm, 200 mm and 300 mm in diameter.

7

EF1 Series

The 130A-compliant EF1 series connectors were developed for use in equipmentwith high current such as large machine tools including storage batteries anddistribution boards that are indispensable for creating the so-called smart gridsociety that features high efficiency, high quality and high reliability. The connector
set can be completed by only clamping a corresponding cable on the roundterminal then integrating them into the respective cases at the plug andreceptacle sides. The one-touch locking mechanism has high operability ensuring
easy and secure connections of connector components.

BM22 Series
These compact and composite board-to-board connectors are equipped with both
4A-applicable power supply terminals and 0.3A-signal terminals. The connectors weredeveloped mainly for use in smartphones and tablet PCs to ensure connections between
their batteries and boards. As a power supply terminal is equipped, there is no need toseparate the cable inside the unit, resulting in a reduced area occupied by the board.
Consequently, a low-height and space-saving configuration has been achieved via originaltechnology, ensuring excellent operability and contact reliability.

Group Network■ Overseas bases(Branches, production subsidiaries,
sales subsidiaries and affiliates)■ Overseas agencies■ Major export destinations● Head office● Kikuna Office● Yokohama Center● P.T. HIROSE ELECTRIC
INDONESIA(Indonesia)● Head office

5-23, Osaki 5-chome, Shinagawa-ku, Tokyo● Yokohama
Center

6-3, Nakagawachuo 2-chome, Tsuzuki-ku,
Yokohama, Kanagawa● Kikuna Office

3-13, Kikuna 7-chome, Kohoku-ku, Yokohama,
Kanagawa● Kansai Branch

Shinosaka Iida Bldg., 5-33, Nishimiyahara
1-chome, Yodogawa-ku, Osaka● Chubu Sales
OfficeNakato Marunouchi Bldg., 17-6, Marunouchi
3-chome, Naka-ku, Nagoya, Aichi● HIROSE ELECTRIC(DONGGUAN) CO.,LTD. (China)● Subsidiaries● HIROSE ELECTRIC
MALAYSIA SDN.
BHD. (Malaysia)● HIROSE KOREA
CO., LTD.
(South Korea)(Domestic)
TOHOKU HIROSE ELECTRIC CO., LTD. (Miyako, Iwate)
KORIYAMA HIROSE ELECTRIC CO., LTD. (Koriyama, Fukushima)
ICHINOSEKI HIROSE ELECTRIC CO., LTD. (Ichinoseki, Iwate)
HST CO., LTD. (Yokohama, Kanagawa)(Overseas)
HIROSE ELECTRIC (U.S.A.), INC. (U.S.A.)HIROSE ELECTRIC UK LTD. (U.K.)
HIROSE ELECTRIC EUROPE B.V. (The Netherlands)
HIROSE ELECTRIC MALAYSIA SDN. BHD. (Malaysia)
HIROSE KOREA CO., LTD. (South Korea)
HIROSE ELECTRIC SINGAPORE PTE. LTD. (Singapore)
HIROSE ELECTRIC (TAIWAN) CO., LTD. (Taiwan)
P.T. HIROSE ELECTRIC INDONESIA (Indonesia)
HIROSE ELECTRIC HONG KONG CO., LTD. (Hong Kong)
HIROSE ELECTRIC HONG KONG TRADING CO., LTD. (Hong Kong)
HIROSE ELECTRIC (DONGGUAN) CO., LTD. (Dongguan, China)
HIROSE ELECTRIC (SHANGHAI) CO., LTD. (Shanghai, China)
HIROSE ELECTRIC (SUZHOU) CO., LTD. (Suzhou, China)
HST (HONG KONG) LTD. (Hong Kong)
HIROSE ELECTRIC TECHNOLOGIES (SHENZHEN) CO., LTD. (Shenzhen, China)
WEIHAI HIROSEKOREA ELECTRIC CO., LTD. (Weihai, China)
WEIHAI HIROSE TRADING CO., LTD. (Weihai, China)

8

Corporate Data

Company Profile (As of March 31, 2013)
Trade name

HIROSE ELECTRIC CO., LTD.

Date of incorporation

June 15, 1948

Number of employees

720 (excluding part-timers)

Paid-in capital¥9,404,379,401

Directors and Corporate Auditors (As of June 27, 2013)
Chairman and Representative Director

Tatsuro Nakamura

Vice Chairman and Representative Director

Sakae Kushida

President and Representative Director

Kazunori Ishii

Senior Managing Director

Yoshikazu Yoshimura

Director

Kazuhisa Nikaido

Director

Total number of shares issued
34,552,937 shares(Excluding 5,467,799 shares of treasury stock)
Number of shareholders

4,542

Major Shareholders (Top 10)
Number of
Ratio ofshares held shareholding

NameHundred shares％

Kazuyuki Iizuka

State Street Bank and Trust Company 505223
JPMorgan Chase Bank 380055
State Street Bank and Trust Company
Japan Trustee Services Bank, Ltd. (Trust account)

36,40528,55017,621
14,652
12,46911,537
10,630

10.54
8.26
5.10
4.24
3.61
3.34
3.08

Director

Makoto Kondo

Japan Trustee Services Bank, Ltd. (Re-trust account of The Sumitomo Mitsui Trust & Banking
Co., Ltd., and the retirement benefit trust account of Sumitomo Mitsui Banking Corporation)

8,162

2.36

Director

Mitsuo Nakamura

Outside Director

Kensuke Hotta

Mizuho Trust & Banking Co., Ltd. 0700028
Mizuho Trust & Banking Co., Ltd. 0700029

7,898
7,847

2.29
2.27

Full-Time Corporate Auditor

Toshio Matsubara

Outside Corporate Auditor

Terukazu Sugishima

Outside Corporate Auditor

Akira Seshimo

Notes:
1.	Director Kensuke Hotta is an outside director as
stipulated in Article 2, Item 15, of the Corporation Law.
2.	Corporate Auditors Terukazu Sugishima and Akira
Seshimo are outside corporate auditors as stipulated
in Article 2, Item 16, of the Corporation Law.

Accounting auditor

9

Stock Information (As of March 31, 2013)

KPMG AZSA LLC

State Street Bank and Trust Company
Hirose International Scholarship Foundation
Japan Trustee Services Bank, Ltd. (Trust Account No. 4)

Note: In addition to the 10 major shareholders above, the Company owns
54,677 hundred shares of treasury stock. The ratio of shareholding is
calculated after excluding the shares of treasury stock.

Distribution of Shares

Distribution of Shares by Shareholder Type
Individuals, etc./3,960 persons
78,626 hundred shares(19.65%)

Financial institutions/50 persons
104,410 hundred shares(26.09%)Securities companies/
27 persons
1,285 hundred shares(0.32%)
Foreign corporations, etc./305 persons
161,621 hundred shares(40.38%)Other corporations/200 persons
54,262 hundred shares(13.56%)

Shareholder information
Fiscal term

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

Ordinary General
Meeting of Shareholders

June every year

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 todirect their notifications and inquiries regarding change of address, etc., totheir respective securities companies where shareholders have theiraccounts. Shareholders who do not have accounts at securities companies
are requested to call the telephone referral line as stated below.
Number of sharesin one voting unit

100

Method of public notices

The Company's Web site below shall be used for its public notices.
〈http://www.hirose.co.jp/investor/index.htm〉
If an electronic public notice should fail due to accident
or any other unavoidable circumstances, the Company
shall post a public notice in the Nihon Keizai Shimbun.

Shareholders’register manager andaccount management
institution for special
accounts

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

Paperwork
processing officeof shareholders’register manager

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

Securities Agency Department,
Sumitomo Mitsui Trust Bank, Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo 168-0063
Phone: 0120-782-031 (Toll free)(Telephone referral)

The Company’s Web site

http://www.hirose.co.jp

Web site

URL: http://www.smtb.jp/personal/agency/
index.html[Special accounts]
The Company has opened accounts (special accounts) at The Sumitomo
Mitsui Trust Bank, Limited, the shareholders’register manager statedabove, for shareholders who did not use JASDEC (Japan Securities
Depository Center, Inc.) prior to the transition to the electronic sharecertificate system. Shareholders who have inquiries about the special
accounts and notifications regarding change of address, etc., are requested
to call the telephone referral line as stated above.
10

ve

nic
tro

s

Creat
i

ec

s to World E
nklLi